Question

Grumpy Inc. had, at the beginning of the year, a balance in the allowance for uncollectible accounts of $1,200. The aging schedule at the end of the year showed that of the total Accounts receivable of 500,000, due less than 30 days were 300000 and greater than 30 days were 200000. It was estimated that % uncollectible is 1% for due less than 30 days and 2.5% for due greater than 30 days. The year-end financial statements should show:

Answer 1

	Grumpy Inc.
	Accounts Receivable	$ 5,00,000.00
	Allowance for uncollectible	$       1,200.00
	Bad debts($300000*1%+$200000*2.5%)	$       8,000.00
	Year End Financial Statement
	Accounts Receivable	$ 5,00,000.00
	Less: Alloawance for doubtful accounts =(Bad debts-Allwance for doubtful accounts)=($8000-$1200)	$       6,800.00
	Net Receivable	$ 4,93,200.00