Question

D Question 7 3.5 pts At January 1, 2019, ABC Company reported an allowance for doubtful accounts with a $3,500 credit balance. During 2019, ABC Company did not write-off any accounts receivable as uncollectible; however, ABC did record recoveries of previously written-off accounts receivable totaling $1,800. ABC Company prepared the following aging schedule at December 31, 2019: % Uncollectible Accounts Receivable not past due $103,600 1-30 days past due 31,600 31-60 days past due 61-90 days past due 23,400 over 90 days past due 45% Based on the above information, ABC Company estimated its bad debt expense to be $5,800 for 2019. It is known that the net realizable value of ABC Company's accounts receivable at December 31, 2019 amounted to $153,675. Calculate the percentage expected to be uncollectible for the accounts receivable that were 61-90 days past due. Enter your answer as a whole number (i.e. 10). Do not enter your answer as a decimal (i.e., .10). Do not enter your answer with the percentage symbol included (i.e., 10%).

Answer 1

Balance in allowance for doubtful accounts at the end:
Beginning balance in allowance for doubtful accounts	$3,500
Add: Recovery of previously written-off accounts receivable	$1,000
Add: Estimated bad debts	$5,800
Balance in allowance for doubtful accounts at the end	$10,300
Net realizable value of accounts receivable	$153,075
Add: Balance in allowance for doubtful accounts at the end	$10,300
Gross value of accounts receivable	$163,375
	Accounts Receivable	% Uncollectible	Uncollectible Amount
Not past due	$103,600	2%	$2,072
1 - 30 days past due	$31,600	6%	$1,896
31 - 60 days past due ($163,375 - $103,600 - $31,600 - $23,400 - $2,800)	$1,975	8%	$158
61 - 90 days past due ($10,300 - $2,072 - $1,896 - $158 - $1,260 = $4,914/$23,400*100)	$23,400	21%	$4,914
Over 90 days past due	$2,800	45%	$1,260
Totals	$163,375		$10,300

Therefore, percentage expected to be uncollectible for the accounts receivable that were 61 - 90 days past due is 21%.