Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts...
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Accounting
Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31.
Performance Bike Co.
Estimation of Uncollectible Accounts
December 31
Age Interval
Balance
Estimated Uncollectible Accounts Percent
Estimated Uncollectible Accounts Amount
Not past due
$870,000
3/4%
$
1-30 days past due
95,700
4
$
31-60 days past due
43,500
6
$
61-90 days past due
31,300
17
$
91-180 days past due
22,600
42
$
Over 180 days past due
16,500
80
$
Total
$1,079,600
$
Answer & Explanation
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