Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Practice Pack
What is the average bad debt expense rate for “31-60 days” accounts?
A. 10.38%
C. 0.46%
B. 41.80%
D. 1.72%
![PROBLEM 5
NINE, INC. estimates its bad debt losses by aging its accounts receivable. The aging
schedule
accounts receivable at
2016.
of
Age of Accounts
0 - 30 days
31 - 60 days
61 - 90 days
91 - 120 days
Over 120 days
December 31.
below.
Amount
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
A/R Balance
Dec. 31
P 1,312,500
999,999
465,000
816,000
1,24 3,667
0- 30
Days
0.3%
following schedule:
61 - 90
Days
12%
91 - 120
Days
38%
41%
31 - 60
Over 120
Year
2015
Days
1.8%
Days
65%
2014
0.5%
1.6%
11%
70%
2013
0.2%
1.5%
9%
50%
69%
2012
0.4%
1.7%
10.2%
47%
81%
2011
0.9%
2.0%
9.7%
33%
95%
The balance of the allowance for bad debts account at December 31, 2016, (before
adjustment) is P84,500.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52666eef-fecc-48cb-94aa-21505c9810ce%2F5178226c-5648-46c9-9d62-de9ce03fb7d0%2Fafuy44h_processed.png&w=3840&q=75)
Transcribed Image Text:PROBLEM 5
NINE, INC. estimates its bad debt losses by aging its accounts receivable. The aging
schedule
accounts receivable at
2016.
of
Age of Accounts
0 - 30 days
31 - 60 days
61 - 90 days
91 - 120 days
Over 120 days
December 31.
below.
Amount
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
A/R Balance
Dec. 31
P 1,312,500
999,999
465,000
816,000
1,24 3,667
0- 30
Days
0.3%
following schedule:
61 - 90
Days
12%
91 - 120
Days
38%
41%
31 - 60
Over 120
Year
2015
Days
1.8%
Days
65%
2014
0.5%
1.6%
11%
70%
2013
0.2%
1.5%
9%
50%
69%
2012
0.4%
1.7%
10.2%
47%
81%
2011
0.9%
2.0%
9.7%
33%
95%
The balance of the allowance for bad debts account at December 31, 2016, (before
adjustment) is P84,500.
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