Sullivan Co.'s accounts receivable show the following balances by age: Age of Receivable Balance 0-30 days $600,000
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Question:
Age of Receivable Balance
0-30 days $600,000
31-60 days 175,000
61-120 days 70,000
more than 120 days 10,000
The credit balance in the allowance for uncollectible accounts is $2,500. Sullivan Co. uses the following percentages to compute the estimated amounts of receivables that will eventually prove uncollectible: 0-30 days, 0.7%; 31-60 days, 1.2%; 61-120 days, 11%; and more than 120 days, 65%.
a) Compute the balance in the allowance for doubtful accounts at year end
b) Compute the bad debt expense for the year
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
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