Question

5) High tech Corporation had credit sales of $3,000,000 in 20x1. Before recording the December 31, 20x1, adjustments, the company's allowance for doubtful accounts had a credit balance of $1,400. A schedule of December 31, 20x1, accounts receivable by age is summarized as follows: Dec. 31, 20x1 A/R Age of A/R Uncollected % expected 8.2 $285,000 Not due 1.5 87,000 1-45 days past due 34,000 46-90 days past due 8,000 over 90 days past due Calculate the amount that should appear on the December 31, 20x1, balance sheet as allowance for doubtful accounts.

Answer 1

Answer

• Amount of Allowance for Doubtful Account = $ 29,589 Credit

Age Interval	Balance	Estimated Uncollectible Accounts Percent	Estimated Uncollectible Accounts Amount
Not past due	$285,000	1.50%	$4,275
1-45 days past due	$87,000	8.20%	$7,134
46-90 days past due	$34,000	37.00%	$12,580
Over 90 days	$8,000	70.00%	$5,600
Total	$414,000		$29,589