Exercise 8-4 (Part Level Submission) Golden Valley Ltd. has an Accounts Receivab

Question

Exercise 8-4 (Part Level Submission) Golden Valley Ltd. has an Accounts Receivable amount of $386,300 and an unadjusted credit balance in Allowance for Doubtful Accounts of $9,400 at March 31. The company's accounts receivable and percentage estimates of its uncollectible accounts are as follows: Number of Days Outstanding 0-30 31-60 61-90 Over 90 Total Estimated Percentage Receivable $270,000 55,000 37,000 24,300 $386,300 Uncollectible 2 % 10% 30% 50% (a) Prepare an aging schedule to determine the total estimated uncollectibles at March 31 Age of Accounts Amount % Estimated Uncollectible 0-30 days 31-60 days 61-90 days Over 90 days $270,000 55,000 37,000 24,300 2% 10% 30% 50%

Explanation / Answer

Age of accounts Amount % Estimated uncollectible 0-30 Days $ 270,000 2% $270,000*2% = $5,400 31-60 Days $    55,000 10% $55,000*10% = $5,500 61-90 Days $    37,000 30% $37,000*30% = $11,100 Over 90 Days $    24,300 50% $24,300*50% = $12,150 $34,150

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