Question

Daly Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.

		Days Past Due
	Total			0			1 to 30			31 to 60			61 to 90			Over 90
Accounts receivable	$	645,000		$	411,000		$	105,000		$	51,000		$	33,000		$	45,000
Percent uncollectible					1	%		2	%		5	%		7	%		10	%
a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method. Accounts Receivable Percent Uncollectible (%) Not due: x = 1 to 30: x = 31 to 60: x = 61 to 90: x = Over 90: x = Estimated balance of allowance for uncollectibles

Answer 1

Answer 'a'

	Accounts Receivable		Percent Uncollectible (%)		Estimated uncollectible amount
	[A]		[B]		[C = A x B]
Not due:	$          411,000	x	1%	=	$            4,110
1 to 30:	$          105,000	x	2%	=	$            2,100
31 to 60:	$            51,000	x	5%	=	$            2,550
61 to 90:	$            33,000	x	7%	=	$            2,310
Over 90:	$            45,000	x	10%	=	$            4,500
Estimated balance of allowance for uncollectibles					$              15,570