Spade Agency separates its accounts receivable into three age groups for purposes of estimating the percentage of uncollectible accounts. In addition, the balance of Allowance for Uncollectible Accounts before adjustment is $12,000 (credit). 1. Accounts not yet due = $47,000; estimated uncollectible = 4%. 2. Accounts 1-60 days past due $32,000; estimated uncollectible = 25%. 3. Accounts more than 60 days past due = $27,000; estimated uncollectible = 50%. Required: 1. Compute the total estimated uncollectible accounts. Estimated Amount Uncollectible Age Group Not yet due 1-60 days past due More than 60 days past due Total
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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