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The following is the Summary of Aged Accounts Receivable List as at December 31, 2016Total ReceivablesCurrent(not...
The following is the Summary of Aged Accounts Receivable List as at December 31, 2016Total ReceivablesCurrent(not overdue)Overdue 1-30 days Overdue 31-60 daysOverdue 61-90 daysOverdue > 90days$897,000$325,000$228,000$174,000$128,000$42,0001% is estimated to be uncollectable.5% is estimated to be uncollectable.10% is estimated to be uncollectable.15% is estimated to be uncollectable.20% is estimated to be uncollectable.On December 30, 2016, the company wrote off a total amount of $100,000 accounts receivable. On December 31, 2016, the unadjusted balance in the Allowance for doubtful accounts is a debit balance of $54,000.Assume the company uses the allowance account method for bad debts based on the Summary ofAged Accounts Receivable List. The company does not estimate the uncollectible percentage based on the total outstanding receivables. Rather, the company applies different percentages depending on the aging of Accounts Receivable, as shown in the Summary of Aged Accounts Receivable List. What should be the bad expense amount that should be reported on the income statement ended on December 31, 2016?
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| Age of account | Accounts receivable | Estimated Percentage Uncollectible | Estimated uncollectibles |
| Current not over due | 325,000 | 1.0% | 3,250 |
| 1 to 30 days | 228,000 | 5.0% | 11,400 |
| 31 to 60 days | 174,000 | 10.0% | 17,400 |
| 61 to 90 days | 128,000 | 15.0% | 19,200 |
| Over 90 days | 42,000 | 20.0% | 8,400 |
| Total | 897,000 | 56,400 |
Allowance for doubtful accounts, unadjusted = $54,000 (debit)
Accounts receivable written off = $100,000
Allowance for doubtful accounts, ending = $56,400
Allowance for doubtful accounts unadjusted for accounts receivable written off = Allowance for doubtful accounts, unadjusted + Accounts receivable written off
= 54,000+100,000
= $154,000
Bad debt expense = Allowance for doubtful accounts, ending + Allowance for doubtful accounts unadjusted for accounts receivable written off
= 56,400+154,000
= $210,400
the bad expense amount that should be reported on the income statement ended on December 31, 2016 = $210,400
ekkarill92 answered 2 years agoRelated Solutions
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20,000
2.0
61-120 days past due
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12,900
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Salaries Payable
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Dividends
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Income Tax Expense
1,450
Utilities Expense
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1. Accounts receivable in the aged trial balance agree with
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presented below along with the estimated percent uncollectible for
each age group:
Age Group
Amount
%
0–60
days
$
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0.5
61–90 days
26,000
1.0
91–120 days
3,800
10.0
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days
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50.0
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Age Group
Amount
%
0–60 days
$
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0.5
61–90 days
21,500
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91–120 days
2,900
10.0
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1,200
50.0
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0
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Interest Payable
0
Notes Payable
11,200
Prepaid Insurance
2,352
Salaries and Wages Payable
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2,744
Unearned Service Revenue
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Collins Company analyzes its accounts receivable at December 31,
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that are estimated as uncollectible.
Age Group
Accounts
Receivable
Estimated
Loss %
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$110,000
1%
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40,000
2
61-120 days past due
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82,400
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?
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