Crell Computers categorizes its accounts receivable into four age groups for purposes of estimating its allowance...

Crell Computers categorizes its accounts receivable into four age groups for purposes of estimating its allowance for uncollectible accounts.

1. Accounts not yet due = $60,000; estimated uncollectible = 5%.

2. Accounts 1–30 days past due = $15,000; estimated uncollectible = 10%.

3. Accounts 31–60 days past due = $10,000; estimated uncollectible = 20%.

4. Accounts more than 60 days past due = $5,000; estimated uncollectible = 30%.

What should be the balance in Crell's allowance for uncollectible accounts?

Allowance for uncollectible accounts = _______

Expert Solution

Allowance for uncollectable accounts = $8,000

Working

Age and amount of Accounts receivable		Estimated percentage Uncollectible	Estimated Amount Uncollectible
Not yet due	$ 60,000.00	5%	$ 3,000.00
Up to 30 days past due	$ 15,000.00	10%	$ 1,500.00
31-60 days past due	$ 10,000.00	20%	$ 2,000.00
Over 60 days past due	$ 5,000.00	30%	$ 1,500.00
Estimated balance in allowance for doubtful accounts			$ 8,000.00

ekkarill92 answered 2 years ago

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Crell Computers categorizes its accounts receivable into four age groups for purposes of estimating its allowance...

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