United Worldwide s accounts receivable totaled 1 75 million on August 31
United Worldwide’s accounts receivable totaled $1.75 million on August 31, 2012. The table below gives a breakdown of these outstanding accounts on the basis of the month of the initial credit sale. The firm extends net 30, EOM to its credit customers.
Month of Credit Sale Accounts Receivable
August 2012 ............ $ 640,000
July 2012 ............ 500,000
June 2012 ............. 164,000
May 2012 ............. 390,000
April 2012 ............ 56,000
Total (August 31, 2012) ...... $1,750,000
a. Prepare an aging schedule for United Worldwide’s August 31, 2012, accounts receivable balance.
b. Using your findings in part (a), evaluate the firm’s credit and collection activities.
c. What are some probable causes of the situation discussed in part (b)?
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