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Required: 1. Which age categories predicts the lowest percentage of uncollectible accounts for Year 6? 2. Which age categories predicts the highest percentage of uncollectible accounts for Year 6? 3. What is the dollar amount of accounts receivable that are 1-30 days past due at the end of year 5 (bottom graph)? 4. Calculate the total amount of estimated uncollectible accounts for Year 6 (Hint: Use all three age categories)? 5. Assume the balance of Allowance for Uncollectible Accounts is $4,850 (credit) at the end of Year 5 (before any adjustment). Prepare the adjusting entry at the end of Year 5. 6. Determine the amount of net accounts receivable the company would report at the end of Year 5.

Required: 1. Which age categories predicts the lowest percentage of uncollectible accounts for Year 6? 2. Which age categories predicts the highest percentage of uncollectible accounts for Year 6? 3. What is the dollar amount of accounts receivable that are 1-30 days past due at the end of year 5 (bottom graph)? 4. Calculate the total amount of estimated uncollectible accounts for Year 6 (Hint: Use all three age categories)? 5. Assume the balance of Allowance for Uncollectible Accounts is $4,850 (credit) at the end of Year 5 (before any adjustment). Prepare the adjusting entry at the end of Year 5. 6. Determine the amount of net accounts receivable the company would report at the end of Year 5.

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section4.5: Correlation And Causation
Problem 12PPS
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Required: 1. Which age categories predicts the lowest percentage of uncollectible accounts for Year 6? 2. Which age categories predicts the highest percentage of uncollectible accounts for Year 6? 3. What is the dollar amount of accounts receivable that are 1-30 days past due at the end of year 5 (bottom graph)? 4. Calculate the total amount of estimated uncollectible accounts for Year 6 (Hint: Use all three age categories)? 5. Assume the balance of Allowance for Uncollectible Accounts is $4,850 (credit) at the end of Year 5 (before any adjustment). Prepare the adjusting entry at the end of Year 5. 6. Determine the amount of net accounts receivable the company would report at the end of Year 5.
Transcribed Image Text:Required: 1. Which age categories predicts the lowest percentage of uncollectible accounts for Year 6? 2. Which age categories predicts the highest percentage of uncollectible accounts for Year 6? 3. What is the dollar amount of accounts receivable that are 1-30 days past due at the end of year 5 (bottom graph)? 4. Calculate the total amount of estimated uncollectible accounts for Year 6 (Hint: Use all three age categories)? 5. Assume the balance of Allowance for Uncollectible Accounts is $4,850 (credit) at the end of Year 5 (before any adjustment). Prepare the adjusting entry at the end of Year 5. 6. Determine the amount of net accounts receivable the company would report at the end of Year 5.
At the end of Year 5, your consulting firm has been hired by a local service firm to help forecast future uncollectible accounts. You ask the service firm to provide several years of data on the percentage of uncollectible accounts based on the age categories of accounts receivable at the beginning of the year. With these historical percentages, you estimate a trend line (dashed line) to predict the percentage of uncollectible accounts for Year 6, the upcoming year. Graphs were provided to management from your analysis of each of the three age categories, as well as balances of accounts receivable by age category at the end of Year 5 as follows: Percentage of Uncollectible Accounts: 1-30 Days Past Due 8% 6% 4% 2% 0% 4% Year 1 Not Yet Past Due 2 3% 3 5% 5 6% 6 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 8 $0 18% 16% 14% 12% 10% 16% 14% Year 1 2 3 $128,000 14% Not Yet Past Due Accounts Receivable by Age: End of Year 5 $84,000 15% 1-30 Days Past Due 6 46% 44% 42% 40% 38% $35,000 Over 30 Days Past Due 425% Year 1 Over 30 Days Past Due 40% 2 41% 3 4 42% 43% 6
Transcribed Image Text:At the end of Year 5, your consulting firm has been hired by a local service firm to help forecast future uncollectible accounts. You ask the service firm to provide several years of data on the percentage of uncollectible accounts based on the age categories of accounts receivable at the beginning of the year. With these historical percentages, you estimate a trend line (dashed line) to predict the percentage of uncollectible accounts for Year 6, the upcoming year. Graphs were provided to management from your analysis of each of the three age categories, as well as balances of accounts receivable by age category at the end of Year 5 as follows: Percentage of Uncollectible Accounts: 1-30 Days Past Due 8% 6% 4% 2% 0% 4% Year 1 Not Yet Past Due 2 3% 3 5% 5 6% 6 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 8 $0 18% 16% 14% 12% 10% 16% 14% Year 1 2 3 $128,000 14% Not Yet Past Due Accounts Receivable by Age: End of Year 5 $84,000 15% 1-30 Days Past Due 6 46% 44% 42% 40% 38% $35,000 Over 30 Days Past Due 425% Year 1 Over 30 Days Past Due 40% 2 41% 3 4 42% 43% 6
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