Proportion Expected to Default Асcounts Allowance Receivable Age Amount Required Current $ 1,553 $310,500 47,500 25,000 12,800 6,100 4,200 0.005 1-30 days past due 31–45 days past due 46–90 days past due 91–135 days past due Over 135 days past due 0.01 475 0.13 0.20 0.25 3,250 2,560 1,525 2,520 $11,883 0.60
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.
| Glencoe Supply had the following $58,620 (credit). During the year, accounts in the total amount of $62,400 were written off. Required: 1. Determine 2. Prepare the 3. If Glencoe had written off $90,000 of receivables as uncollectible during the year, how much would bad debt expense reported on the income statement have changed? |
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