On Dec 31, 2016, Rawda Company had accounts receivable of $750,000 and allowance for doubtful accounts that had a debit balance of $10,000. The company uses an aging schedule (aging method) to estimate its uncollectible accounts as shown in the following table:

# of Days Outstanding	Amounts	Estimated % Uncollectible
0-30	$ 200,000	2%
31-60	200,000	4%
61-90	200,000	6%
Over 90	150,000	8%

Requirements:

1. What is the required balance for the allowance of doubtful accounts on Dec 31, 2016?

2. What is the net realizable value of the accounts receivable on Dec 31, 2016?

3. If on May 1, 2017, one of the company’s customer that owed the company $21,000 filed bankruptcy, what is the balance of the allowance for doubtful accounts on May 1, 2017?

4. If On July 31, 2017, the customer that filed a bankruptcy on May 1, 2017 came back and paid Radwda $15,000, what is the balance of the allowance for doubtful accounts on July 31, 2017?

Answer rating: 100% (QA)

a The required balance for the allowance of doubtful accounts on Dec 31 2016 Estimated Uncollect... View the full answer