Question

Exercise 3-5 Waterway Industries has accounts receivable of $98,600 at March 31, 2017. Credit terms are 2/10, V30. At March 31, 2017, there is a $2,227 credit balance in Allowance for Doubthul Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below. Balance, March 31 Estimated Percentage Age of Accounts 2017 2016 Uncollectible Current $68,400 $69,990 1-30 days past due 13,700 7,880 31-90 days past due 9,700 2,400 Over 90 days past due 6,800 1,100 598,600 $81, 370

Answer 1

Age of accounts	Balance March 31, 2017 (a)	Estimated percentage uncollectible (b)	Estimated uncollectible amount (a*b)
Current	68400	2%	1368
1-30 days past due	13700	5%	685
31-90 days past due	9700	28%	2716
Over 90 days past due	6800	49%	3332
Total estimated uncollectibles			8101

Bad debts amount = Total estimated uncollectibles - Credit balance of allowance for doubtful accounts prior to adjustment = 8101 - 2227

5874