Performance Bike Co. is historical analysis of the percentage of uncollectible a

Question

Performance Bike Co. is 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. a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a Performance Bike Co. Estimation of Uncollectible Accounts Age Interval Balance $568,000 62,500 Estimated Uncollectible Accounts Percent Estimated Not past due 1-30 days past due 31-60 days past due28,400 61-90 days past due20,400 91-180 days past due14,800 $ 284,000 1,250 1.704 3,468 5,920 7,020 s 303,362 x 40% s past due10,800

Explanation / Answer

$568000 x 0.5% = $2840

Performance Bike Co. Estimation of Uncollectible Accounts December 31 Age Interval Balance Estimated Uncollectible Accounts Percent Estimated Uncollectible Accounts Amount Not past due 568000 1/2% 2840 1250 1704 3468 5920 7020 Total 704900 22202

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