overdue, there is a 92% probability of collection. For the $300,000 of accounts that are less than a month past due, ABC estimates the likelihood of collection going down to 75%. The probability of collecting the $150,000 of accounts more than a month past due is estimated to be 30%. Required A. Prepare an aging schedule to estimate the amount of uncollectible accounts. Estimated Category Estimated
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.
Probably a step by step of this one too, I have only 2 more after this
5. ABC Company sells on credit with terms of n/30. For the $800,000 of accounts at the end of the year 2018 that are not
overdue, there is a 92% probability of collection. For the $300,000 of accounts that are less than a month past due, ABC
estimates the likelihood of collection going down to 75%. The probability of collecting the $150,000 of accounts more
than a month past due is estimated to be 30%.
Required
A. Prepare an aging schedule to estimate the amount of uncollectible accounts.
Estimated Category Estimated
Amount
Percent
Uncollectible
Amount
Uncollectible
Step by step
Solved in 3 steps
