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. 0-30 days past due 31-90 days past due Over 90 days past due Accounts receivable amount $52,000 $31,000 $17,000 Percent uncollectible 8% 15% 30% Total per category ? ? ? Total uncollectible ? To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. 0-60 days past due 61-120 days past due Over 120 days past due Accounts receivable Amount $82,000 $15,000 $8,000 Percent uncollectible 8% 15% 30% Total per category ? ? ? Total uncollectible ? Complete the following. A. Complete each table by filling in the blanks. 0-30 days past due 31-90 days past due Over 90 days past due Accounts receivable amount $52,000 $31,000 $17,000 Percent uncollectible 8% 15% 30% Total per category $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Total uncollectible $fill in the blank 4 0-60 days past due 61-120 days past due Over 120 days past due Accounts receivable amount $82,000 $15,000 $8,000 Percent uncollectible 8% 15% 30% Total per category $fill in the blank 5 $fill in the blank 6 $fill in the blank 7 Total uncollectible $fill in the blank 8 B. Determine the difference between total uncollectible. $fill in the blank 9 C. How does the new total uncollectible amount affect net income and net accounts receivable? a. Bad debt expense is lower, net income is higher, and net receivables are higher. b. Bad debt expense is lower, net income is higher, and net receivables are lower. c. Bad debt expense is higher, net income is lower, and net receivables are higher. d. Bad debt expense is higher, net income is lower, and net receivables are lower
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.
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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 2019.0-30 days
past due31-90 days
past dueOver 90 days
past dueAccounts receivable amount$52,000 $31,000 $17,000 Percent uncollectible 8% 15% 30% Total per category ? ? ? Total uncollectible ? To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows.
0-60 days
past due61-120 days
past dueOver 120 days
past dueAccounts receivable Amount $82,000 $15,000 $8,000 Percent uncollectible 8% 15% 30% Total per category ? ? ? Total uncollectible ? Complete the following.
A. Complete each table by filling in the blanks.
0-30 days
past due31-90 days
past dueOver 90 days
past dueAccounts receivable amount $52,000 $31,000 $17,000 Percent uncollectible 8% 15% 30% Total per category $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Total uncollectible $fill in the blank 4
0-60 days
past due61-120 days
past dueOver 120 days
past dueAccounts receivable amount $82,000 $15,000 $8,000 Percent uncollectible 8% 15% 30% Total per category $fill in the blank 5 $fill in the blank 6 $fill in the blank 7 Total uncollectible $fill in the blank 8 B. Determine the difference between total uncollectible.
$fill in the blank 9
C. How does the new total uncollectible amount affect net income and net accounts receivable?
a. Bad debt expense is lower, net income is higher, and net receivables are higher.b. Bad debt expense is lower, net income is higher, and net receivables are lower. c. Bad debt expense is higher, net income is lower, and net receivables are higher. d. Bad debt expense is higher, net income is lower, and net receivables are lower.
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