Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. Proportion Expected to Default 0.005 0.01 0.13 0.20 0.25 0.60 Accounts Receivable Age Allowance Required $1,553 475 3,250 2,560 1,525 2,520 $11,883 The balance in Glencoe allowance for doubtful accounts at the beginning of the year was $48,480 (credit). During the year, accounts in the total amount of $51,232 were written off. Required: Current 1-30 days past due 31-45 days past due 46-90 days past due 91-135 days past due Over 135 days past due 1. Determine bad debt expense. 2,752 X Feedback Amount $310,500 47,500 25,000 12,800 6,100 4,200 Check My Work 1. The aging method attempts to estimate the ending balance in the Allowance for Doubtful Accounts. CO
Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. Proportion Expected to Default 0.005 0.01 0.13 0.20 0.25 0.60 Accounts Receivable Age Allowance Required $1,553 475 3,250 2,560 1,525 2,520 $11,883 The balance in Glencoe allowance for doubtful accounts at the beginning of the year was $48,480 (credit). During the year, accounts in the total amount of $51,232 were written off. Required: Current 1-30 days past due 31-45 days past due 46-90 days past due 91-135 days past due Over 135 days past due 1. Determine bad debt expense. 2,752 X Feedback Amount $310,500 47,500 25,000 12,800 6,100 4,200 Check My Work 1. The aging method attempts to estimate the ending balance in the Allowance for Doubtful Accounts. CO
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:Bad Debt Expense: Aging Method
Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year.
Proportion Expected
to Default
0.005
0.01
0.13
0.20
0.25
0.60
Accounts
Receivable Age
Current
1-30 days past due
31-45 days past due
46-90 days past due
91-135 days past due
Over 135 days past due
1. Determine bad debt expense.
2,752 X
Amount
$310,500
$1,553
475
3,250
2,560
1,525
2,520
$11,883
The balance in Glencoe allowance for doubtful accounts at the beginning of the year was $48,480 (credit). During the year, accounts in the total amount of $51,232 were
written off.
Required:
Feedback
Allowance
Required
47,500
25,000
12,800
6,100
4,200
Check My Work
1. The aging method attempts to estimate the ending balance in the Allowance for Doubtful Accounts.
CO
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