The assessment of amount of the allowance for doubtful accounts receivables. Given information: Data for Y2 Sales for the Y2 are $370, 00,000. Total receivables for Y2 are $67,000,000. In 0-30 days ageing category receivables are $15,000,000 with uncollectible 4%. In 31-60 days ageing category receivables are $27,000,000 with uncollectible 10%. In 61-90 days ageing category receivables are $10,000,000 with uncollectible 30%. In 91-120 days ageing category receivables are $5,000,000 with uncollectible 40%. In Over 120 days ageing category receivables are $10,000,000 with uncollectible 80%. Data for Y1 Sales for the Y2 are $420, 00,000. Total receivables for Y1 are $48,000,000. In 0-30 days ageing category receivables are $30,000,000 with uncollectible 1%. In 31-60 days ageing category receivables are $8,000,000 with uncollectible 7.5%. In 61-90 days ageing category receivables are $4,000,000 with uncollectible 20%. In 91-120 days ageing category receivables are $2,000,000 with uncollectible 40%. In Over 120 days ageing category receivables are $4,000,000 with uncollectible 45%.
The assessment of amount of the allowance for doubtful accounts receivables. Given information: Data for Y2 Sales for the Y2 are $370, 00,000. Total receivables for Y2 are $67,000,000. In 0-30 days ageing category receivables are $15,000,000 with uncollectible 4%. In 31-60 days ageing category receivables are $27,000,000 with uncollectible 10%. In 61-90 days ageing category receivables are $10,000,000 with uncollectible 30%. In 91-120 days ageing category receivables are $5,000,000 with uncollectible 40%. In Over 120 days ageing category receivables are $10,000,000 with uncollectible 80%. Data for Y1 Sales for the Y2 are $420, 00,000. Total receivables for Y1 are $48,000,000. In 0-30 days ageing category receivables are $30,000,000 with uncollectible 1%. In 31-60 days ageing category receivables are $8,000,000 with uncollectible 7.5%. In 61-90 days ageing category receivables are $4,000,000 with uncollectible 20%. In 91-120 days ageing category receivables are $2,000,000 with uncollectible 40%. In Over 120 days ageing category receivables are $4,000,000 with uncollectible 45%.
Solution Summary: The author explains the allowance for doubtful accounts receivables, which is set aside for the bad debts expense expected to incur on account of sales made during the year.