Question

Required information [The following information applies to the questions displayed below.] Jarden Company has credit sales of $2,600,000 for year 2017. On December 31, 2017, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $15,066. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here. December 31, 2017 Accounts Receivable $ 520,000 208,000 41,600 20,800 4,160 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due Expected Percent Uncollectible 0.80% 1.55 6.05 30.50 63.00 Required: 1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method. Estimated Uncollectible 0.80% = Accounts Percent Receivable Uncollectible (#.##%) Not due: $ 520,000 x 1 to 30: 31 to 60: 61 to 90: Over 90: Estimated balance of allowance for uncollectibles X $ 0

Answer 1

Not due 1 to 30 31 to 60 61 to 90 Over 90 Accounts Receivable Percent uncollectible Estimated Uncollectible 520,000 0.80% 4,160 208,000 1.55% 3,224 41,600 6.05% 2,517 20,800 30.50% 6,344 4,160 63.00% 2,621 Estimate balance of allowance for uncollectibles 18,866