Question

Estimating Allowance for Doubtful Accounts

Kirchhoff Industries has a past history of uncollectible accounts, as shown below.

Age Class	Percent Uncollectible
Not past due	1%
1-30 days past due	6
31-60 days past due	25
61-90 days past due	35
Over 90 days past due	50

Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below.

Kirchhoff Industries
Aging of Receivables Schedule
Customer	Balance	Not Past Due	1-30 Days Past Due	31-60 Days Past Due	61-90 Days Past Due	Over 90 Days Past Due
Subtotals	615,000	362,900	135,300	55,400	30,800	30,600
Conover Industries	13,600					13,600
Keystone Company	15,800				15,800
Moxie Creek Inc.	5,300			5,300
Rainbow Company	8,800		8,800
Swanson Company	26,100	26,100
Totals	684,600	389,000	144,100	60,700	46,600	44,200
Percentage uncollectible		1%	6%	25%	35%	50%
Allowance for Doubtful Accounts

Answer 1

Allowance for Doubtful Accounts

66,121

Kirchhoff Industries Aging of Receivables Schedule Customer Subtotals Conover Industries Keystone Company Moxie Creek Inc. Rainbow Company Swanson Company Totals Percentage uncollectible Allowance for Doubtful Accounts Calculation Balance Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due 615,000 362,900 135,300 55,400 30,800 30,600 13,600 13,600 15,800 15,800 5,300 5,300 8,800 8,800 26,100 26,100 684,600 389,000 144,100 60,700 46,600 44,200 1% 6% 25% 35% 50% 66,121 3,890 8,646 15,175 16,310 22,100 389000*1% 144100*6% 60700*25% 46600*35% 44200*50%