Kirchhoff Industries has a past history of uncollectible accounts, as shown below. Age Class Percent Uncollectible Not past due 2% 1-30 days past due 6 31-60 days past due 25 61-90 days past due 35 Over 90 days past due 50 Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below. Kirchhoff IndustriesAging of Receivables Schedule Customer Balance Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due Subtotals 553,700 326,700 121,800 49,800 27,700 27,700 Conover Industries 18,900 18,900 Keystone Company 22,000 22,000 Moxie Creek Inc. 4,800 4,800 Rainbow Company 12,000 12,000 Swanson Company 27,700 27,700 Total receivables 639,100 354,400 133,800 54,600 49,700 46,600 Percentage uncollectible 2% 6% 25% 35% 50% Allowance for Doubtful Accounts fill in the blank 1 fill in the blank 2 fill in the blank 3 fill in the blank 4 fill in the blank 5 fill in the blank 6
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.
Kirchhoff Industries has a past history of uncollectible accounts, as shown below.
Age Class |
Percent Uncollectible |
|
| Not past due | 2% | |
| 1-30 days past due | 6 | |
| 31-60 days past due | 25 | |
| 61-90 days past due | 35 | |
| Over 90 days past due | 50 |
Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below.
Kirchhoff IndustriesAging of Receivables Schedule
| Customer | Balance | Not Past Due |
1-30 Days Past Due |
31-60 Days Past Due |
61-90 Days Past Due |
Over 90 Days Past Due |
| Subtotals | 553,700 | 326,700 | 121,800 | 49,800 | 27,700 | 27,700 |
| Conover Industries | 18,900 | 18,900 | ||||
| Keystone Company | 22,000 | 22,000 | ||||
| Moxie Creek Inc. | 4,800 | 4,800 | ||||
| Rainbow Company | 12,000 | 12,000 | ||||
| Swanson Company | 27,700 | 27,700 | ||||
| Total receivables | 639,100 | 354,400 | 133,800 | 54,600 | 49,700 | 46,600 |
| Percentage uncollectible | 2% | 6% | 25% | 35% | 50% | |
| Allowance for Doubtful Accounts | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | fill in the blank 4 | fill in the blank 5 | fill in the blank 6 |
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