Estimating Doubtful Accounts Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 20Y3, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Age Interval Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-180 days past due Over 180 days past due Balance $364,100 135,800 55,500 30,900 30,800 17,500 Percent Uncollectible 2% 6 20 30 45 65 $634,600 Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 20Y3. Enter your answers as positive amounts.
Estimating Doubtful Accounts Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 20Y3, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Age Interval Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-180 days past due Over 180 days past due Balance $364,100 135,800 55,500 30,900 30,800 17,500 Percent Uncollectible 2% 6 20 30 45 65 $634,600 Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 20Y3. Enter your answers as positive amounts.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:<
Estimating Doubtful Accounts
Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 20Y3, and a historical analysis of the
percentage of uncollectible accounts in each age category are as follows:
Age Interval
Not past due
1-30 days past due
31-60 days past due
61-90 days past due
91-180 days past due
Over 180 days past due
Age Interval
Balance
$364,100
135,800
55,500
30,900
30,800
17,500
$634,600
Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 20Y3. Enter your answers as positive amounts.
Estimated
Uncollectible
Amount
$ 135,800 X
Not past due
1-30 days past due
Percent
Uncollectible
2%
6
20
30
45
65
135,800 X
Transcribed Image Text:<
$634,600
Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 20Y3. Enter your answers as positive amounts.
Age Interval
Not past due
1-30 days past due
31-60 days past due
61-90 days past due
91-180 days past due
Over 180 days past due
Total
Feedback.
Estimated
Uncollectible
Amount
135,800 X
135,800 X
100₂0
65 X
Check My Work
Apply the respective uncollectible percentage to the total receivables in each day's past due group and the total receivables in not past due group. Add these to
determine the allowance for the doubtful accounts balance.
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