The Fossell Fashions Store uses the accounts receivable aging method to estimate uncollectible accounts. On February 1,
Question:
To finish the analysis, the following accounts need to be classified:
From past experience, the company has found that the following rates are realistic for estimating uncollectible accounts:
Percentage Considered
Time Uncollectible
Not yet due.................................... 2
1-30 days past due ........................... 5
31-60 days past due ......................... 15
61-90 days past due ......................... 25
Over 90 days past due ........................50
Required
1. Complete the aging analysis of accounts receivable.
2. Compute the end-of-year balances (before adjustments) of Accounts
Receivable and Allowance for Uncollectible Accounts.
3. Prepare an analysis computing the estimated uncollectible accounts.
4. How much is Fossell Fashions Store's estimated uncollectible accounts expense for the year? (Round the adjustment to the nearest whole dollar.)
5. User Insight: What role do estimates play in applying the aging analysis? What factors might affect these estimates?
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
Principles of Accounting
ISBN: 978-0618736614
10th edition
Authors: Belverd Needles, Marian Powers, Susan Crosson