Outlaw Bike Co. is a wholesaler of motorcycle supplies. An aging of the companys accounts...
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Accounting
Outlaw Bike Co. is a wholesaler of motorcycle supplies. An aging of the companys accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Age Interval
Balance
Percent Uncollectible
Not past due
$892,000
3/4 %
1 - 30 days past due
285,000
1
31 - 60 days past due
101,000
8
61 - 90 days past due
63,000
16
91 - 180 days past due
43,100
50
Over 180 days past due
17,700
80
$1,401,800
Estimate what the proper balance of the Allowance for Doubtful Accounts should be as of December 31.
Estimate what the proper balance of the Allowance for Doubtful Accounts should be as of December 31.
Estimated Uncollectible Accounts
Age Interval
Balance
Percent
Amount
Not past due
$892,000
0.75
1 - 30 days past due
285,000
1.00
31 - 60 days past due
101,000
8.00
61 - 90 days past due
63,000
16.00
91 - 180 days past due
43,100
50.00
Over 180 days past due
17,700
80.00
Total
$1,401,800
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