Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. . Complete each table by filling in the blanks. A. Accounts receivable amount Percentage uncollectible Total per category Total uncollectible A. Accounts receivable amount Percentage uncollectible Total per category Total uncollectible 0-30 days past due $50,000 8% 0-60 days past due $80,000 8% 31-90 days past due $30,000 15% 61-120 days past due Determine the difference between total uncollectible. Explain how the new total uncollectible amount affects net income and accounts receivable. $10,000 15% Over 90 days past due $15,000 30% Over 120 days past due $5,000 30%
Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. . Complete each table by filling in the blanks. A. Accounts receivable amount Percentage uncollectible Total per category Total uncollectible A. Accounts receivable amount Percentage uncollectible Total per category Total uncollectible 0-30 days past due $50,000 8% 0-60 days past due $80,000 8% 31-90 days past due $30,000 15% 61-120 days past due Determine the difference between total uncollectible. Explain how the new total uncollectible amount affects net income and accounts receivable. $10,000 15% Over 90 days past due $15,000 30% Over 120 days past due $5,000 30%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
complete each table by filling in the blanks
Transcribed Image Text:**Title: Analyzing Uncollectible Debt on Receivables: An Educational Example**
**Introduction:**
Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following example provides the past-due category information for outstanding receivable debt for 2019 and how changing past-due categories can impact the accounting of such debts.
---
**Example:**
To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows.
Complete the following:
- Complete each table by filling in the blanks.
**Table A: Original Past-Due Categories**
| | 0–30 days past due | 31–90 days past due | Over 90 days past due |
|------------------|--------------------|---------------------|-----------------------|
| Accounts receivable amount | $50,000 | $30,000 | $15,000 |
| Percentage uncollectible | 8% | 15% | 30% |
| Total per category | | | |
| Total uncollectible | | | |
**Table B: New Past-Due Categories**
| | 0–60 days past due | 61–120 days past due | Over 120 days past due |
|------------------|--------------------|----------------------|------------------------|
| Accounts receivable amount | $80,000 | $10,000 | $5,000 |
| Percentage uncollectible | 8% | 15% | 30% |
| Total per category | | | |
| Total uncollectible | | | |
**Questions to Consider:**
1. Determine the difference between total uncollectible.
2. Explain how the new total uncollectible amount affects net income and accounts receivable.
---
**Analysis and Key Concepts:**
- **Total Per Category Calculation:**
For each category, multiply the accounts receivable amount by the percentage uncollectible.
**Table A:**
- 0–30 days past due: $50,000 * 8% = $4,000
- 31–90 days past due: $30,000 * 15% = $4,500
- Over 90 days past due: $15,000 * 30% = $4,500
**Total Uncollect
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