Question

How to find estimated uncollected accounts

Answer 1

Estimated uncollected accounts can be found using following steps.

Step 1:

Identify the account receivable balance from unadjusted balance. (For example, Accounts receivable is $440,000)

Step 2:	Classified the accounts receivable balance from invoice date to Monthly timeframe.
	Due	Amount of Accounts receivable
	0 to 30 days	$                            275,000
	31 to 60 days	$                            130,000
	61 to 90 days	$                              25,000
	Over 90 days	$                              10,000
	Total accounts receivable (match with step 1)	$                            440,000

Step 3:	Using the past data, Determine the estimated uncollected percentage for each monthly categories. For example, It is determine that estimated uncollected percentage is 2%,5%, 15%,25% respectively using past data.
	Due	Estimated Percentage of Uncollectable
	0 to 30 days	2%
	31 to 60 days	5%
	61 to 90 days	15%
	Over 90 days	25%

Step 4:

Determine the amount of estimated uncollected accounts.

Due	Amount of Accounts receivable	Estimated Percentage of Uncollectable	Estimated uncollected accounts
0 to 30 days	$                            275,000	2%	$                                5,500
31 to 60 days	$                            130,000	5%	$                                6,500
61 to 90 days	$                              25,000	15%	$                                3,750
Over 90 days	$                              10,000	25%	$                                2,500
Total estimated uncollected accounts			$                             18,250