Evers Industries has a past history of uncollectible accounts, as follows. Age Class Percent Uncollectible Not past due 3% 1–30 days past due 4 31–60 days past due 18 61–90 days past due 38 Over 90 days past due 90 Estimate the allowance for doubtful accounts, based on the aging of receivables information provided in the Aging of Receivables Schedule page. Evers Industries Estimate of Allowance for Doubtful Accounts 1 Days Past Due Days Past Due Days Past Due Days Past Due 2 Balance Not Past Due 1-30 31-60 61-90 Over 90 3 Total receivables 1,147,400.00 610,600.00 236,400.00 120,300.00 105,300.00 74,800.00 4 Percentage uncollectible 3.0% 4.0% 18.0% 38.0% 90.0% 5 Allowance for doubtful accounts
Evers Industries has a past history of uncollectible accounts, as follows. Age Class Percent Uncollectible Not past due 3% 1–30 days past due 4 31–60 days past due 18 61–90 days past due 38 Over 90 days past due 90 Estimate the allowance for doubtful accounts, based on the aging of receivables information provided in the Aging of Receivables Schedule page. Evers Industries Estimate of Allowance for Doubtful Accounts 1 Days Past Due Days Past Due Days Past Due Days Past Due 2 Balance Not Past Due 1-30 31-60 61-90 Over 90 3 Total receivables 1,147,400.00 610,600.00 236,400.00 120,300.00 105,300.00 74,800.00 4 Percentage uncollectible 3.0% 4.0% 18.0% 38.0% 90.0% 5 Allowance for doubtful accounts
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.
Question
Evers Industries has a past history of uncollectible accounts, as follows.
|
Age Class
|
Percent Uncollectible
|
| Not past due | 3% |
| 1–30 days past due | 4 |
| 31–60 days past due | 18 |
| 61–90 days past due | 38 |
| Over 90 days past due | 90 |
Estimate the allowance for doubtful accounts, based on the aging of receivables information provided in the Aging of Receivables Schedule page.
|
Evers Industries
|
|
Estimate of Allowance for Doubtful Accounts
|
|
1
|
|
|
|
Days Past Due
|
Days Past Due
|
Days Past Due
|
Days Past Due
|
|
2
|
|
Balance
|
Not Past Due
|
1-30
|
31-60
|
61-90
|
Over 90
|
|
3
|
Total receivables
|
1,147,400.00
|
610,600.00
|
236,400.00
|
120,300.00
|
105,300.00
|
74,800.00
|
|
4
|
Percentage uncollectible
|
|
3.0%
|
4.0%
|
18.0%
|
38.0%
|
90.0%
|
|
5
|
Allowance for doubtful accounts
|
|
|
|
|
|
|
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