PROBLEM 5 NINE, INC. estimates its bad debt losses by aging its accounts receivable. The aging schedule of accounts receivable at 2016. is Age of Accounts 0- 30 days 31 - 60 days 61 - 90 days 91 - 120 days Over 120 days December 31, below. presented Amount P 843.200 461.000 192,400 76.650 39.400 Nine Inc.'s uncollectible accounts experience for the past 5 years are summarized in the following schedule: A/R Balance 61 - 90 91 - 120 Over 120 0-30 31 - 60 Dec. 31 P 1,312,500 999,999 465.000 816.000 1.24 3.667 Days 1.8% Days Year 2015 Days 0.3% Days 38% Days 65% 12% 2014 0.5% 1.6% 1.5% 1.7% 2.0% 11% 41% 50% 70 2013 2012 2011 0.2% 0.4% 9% 69% 47% 33% 10.2% 81% 0.9% 9.7% 95% The balance of the allowance for bad debts account at December 31. 2016. (before adjustment) is P84,500. Requirements: 1. What is the average bad debt expense rate for "91-120 days" accounts? C. 10.38% D. 41.80% A. 76% B. 8.6%
PROBLEM 5 NINE, INC. estimates its bad debt losses by aging its accounts receivable. The aging schedule of accounts receivable at 2016. is Age of Accounts 0- 30 days 31 - 60 days 61 - 90 days 91 - 120 days Over 120 days December 31, below. presented Amount P 843.200 461.000 192,400 76.650 39.400 Nine Inc.'s uncollectible accounts experience for the past 5 years are summarized in the following schedule: A/R Balance 61 - 90 91 - 120 Over 120 0-30 31 - 60 Dec. 31 P 1,312,500 999,999 465.000 816.000 1.24 3.667 Days 1.8% Days Year 2015 Days 0.3% Days 38% Days 65% 12% 2014 0.5% 1.6% 1.5% 1.7% 2.0% 11% 41% 50% 70 2013 2012 2011 0.2% 0.4% 9% 69% 47% 33% 10.2% 81% 0.9% 9.7% 95% The balance of the allowance for bad debts account at December 31. 2016. (before adjustment) is P84,500. Requirements: 1. What is the average bad debt expense rate for "91-120 days" accounts? C. 10.38% D. 41.80% A. 76% B. 8.6%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PROBLEM 5
NINE, INC. estimates its bad debt losses by aging its accounts receivable. The aging
schedule
of
accounts receivable at
Age of Accounts
0- 30 days
31 - 60 days
61 - 90 days
91 - 120 days
Over 120 days
December 31.
below.
Amount
2016.
is
presented
P 843,200
461.000
192.400
76,650
39.400
Nine Inc.'s uncollectible accounts experience for the past 5 years are summarized in the
0 - 30
Days
0.3%
following schedule:
61 - 90
Days
12%
91 - 120
Days
38%
A/R Balance
Dec. 31
P 1,312,500
999,999
465,000
816.000
1,243,667
31 - 60
Over 120
Year
2015
Days
1.8%
Days
65%
1.6%
1.5%
2014
0.5%
11%
41%
70%
2013
69%
0.2%
0.4%
0.9%
9%
50%
47%
33%
2012
1.7%
10.2%
81%
2011
2.0%
9.7%
95%
The balance of the allowance for bad debts account at December 31, 2016. (before
adjustment) is P84,500.
Requirements:
1. What is the average bad debt expense rate for "91-120 days" accounts?
A. 76%
В. 8.6%
C. 10.38%
D. 41.80%
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