Question

Question 4 of 4 1/3 E View Policies Show Attempt History Current Attempt in Progress Wildhorse Corporation operates in an Industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Wildhorse's Accounts Receivable account was $581,000 and Allowance for Doubtful Accounts had a credit balance of $40,670. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account Outstanding Less than 16 days Between 16 and 30 days Between 31 and 45 days Between 46 and 60 days Between 61 and 75 days Over 75 days (to be written off) Amount $313,600 111.700 82.900 40.200 18.400 14,200 Probability of Collection 0.97 0.90 0.86 0.78 0.57 0.00 (a) ✓ Your answer is correct. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? Balance for Allowance for Doubtful Accounts $ 48940 e Textbook and Media Attempts: 1 of 5 used

Answer 1

B D A C Probability of Estiamted doubtful Days Account Outstanding Amount 1 Uncollectibility accounts 2 Less than 16 days $ 313,600 0.03 $ 9,408 3 Between 16 and 30 days $ 111,700 0.1 $ 11,170 4 Between 31 and 45 days $ 82,900 0.14 $ 11,606 5 Between 46 and 60 days $ 40,200 0.22 $ 8,844 6 Between 61 and 75 days $ 18,400 0.43 $ 7,912 7 Balance for Allownace for Doubtful Accounts $ 48,940 8 9 WILDHORSE CORPORATION 10 Balance sheet (partial) 11 Accounts Receivable $ 566,800 12 Less: Allowance for Doubtful Accounts $ 48,940 13 Net Accounts Receivable $ 517,860 14 15 Note: $14,200 is written off, so it should not included in the 16 accounts receivable.

D A B Probability of Days Account Outstanding Amount 1 Uncollectibility 2 Less than 16 days 313600 =1-0.97 3 Between 16 and 30 days 111700 =1-0.9 4 Between 31 and 45 days 82900 =1-0.86 5 Between 46 and 60 days 40200 =1-0.78 6 Between 61 and 75 days 18400 =1-0.57 7 Balance for Allownace for Doubtful Accounts 8 9 WILDHORSE CORPORATION 10 Balance sheet (partial) 11 Accounts Receivable =581000-14200 12 Less: Allowance for Doubtful Accounts =+D7 13 Net Accounts Receivable =+C11-C12 Estiamted doubtful accounts =+B2*C2 =+B3*C3 =+B4*C4 =+B5*C5 =+B6 C6 =SUM(D2:06)