Pearl Corporation operates in an industry that has a high rate of bad debts. Before any year-end
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Question:
Pearl Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Pearl's Accounts Receivable account was $595,600 and Allowance for Doubtful Accounts had a credit balance of $40,350. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below.
|
| Probability of | ||||
Less than 16 days | $314,500 | 0.97 | ||||
Between 16 and 30 days | 119,900 | 0.90 | ||||
Between 31 and 45 days | 84,800 | 0.85 | ||||
Between 46 and 60 days | 43,000 | 0.82 | ||||
Between 61 and 75 days | 19,800 | 0.53 | ||||
Over 75 days | 13,600 | 0.00 |
Assume that accounts with a zero percent chance of collection are intended to be written off.
Show how accounts receivable would be presented on the balance sheet.
PEARL CORPORATION |
Related Book For
Intermediate Accounting
ISBN: 9781119790976
18th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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