Estimating Bad Debts Expense and Reporting Receivables At December 31, Barber Company had a balance of $630,000 in its accounts receivable and an unused balance of $3,900 in its allowance for uncollectible accounts. The company then aged its accounts as follows. Current 1-60 days past due 61-180 days past due Over 180 days past due Total accounts receivable $630,000 $519,000 72,000 25,500 13,500 The company has experienced losses as follows: 1% of current balances, 5% of balances 1-60 days past due, 15% of balances 61-180 days past and 40% of balances over 180 days past due. The company continues to base its allowance for uncollectible accounts on this aging analysis and percentages. a. What amount of bad debts expense does Barber report on its income statement for the year? $ 14,115 b. Show how Barber's December 31 balance sheet will report the accounts receivable and the allowance for uncollectible accounts. Note: Round your answers to the nearest whole dollar. Note: Do not use a negative sign with your answers. Current Assets Accounts receivable Less allowance for uncollectible accounts $ 630,000 18,015 $ 611,985

Estimating Bad Debts Expense and Reporting Receivables At December 31, Barber Company had a balance of $630,000 in its accounts receivable and an unused balance of $3,900 in its allowance for uncollectible accounts. The company then aged its accounts as follows. Current 1-60 days past due 61-180 days past due Over 180 days past due Total accounts receivable $630,000 $519,000 72,000 25,500 13,500 The company has experienced losses as follows: 1% of current balances, 5% of balances 1-60 days past due, 15% of balances 61-180 days past and 40% of balances over 180 days past due. The company continues to base its allowance for uncollectible accounts on this aging analysis and percentages. a. What amount of bad debts expense does Barber report on its income statement for the year? $ 14,115 b. Show how Barber's December 31 balance sheet will report the accounts receivable and the allowance for uncollectible accounts. Note: Round your answers to the nearest whole dollar. Note: Do not use a negative sign with your answers. Current Assets Accounts receivable Less allowance for uncollectible accounts $ 630,000 18,015 $ 611,985

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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