Question
Part 9. Aging Method Famous Floats ("FF") estimates uncollectible accounts using the aging method. As of December 31, 2006, the balance in FF's accounts receivable totals $2,000,000. In particular, FF has the following aging information available as of December 31, 2006: Current accounts Accounts 30 days past due Accounts between 31-60 days past due Accounts over 60 days past due Balance as of | % Estimated Allowance Dec. 31, 2006 Uncollectible(12/31 EB) 9,000 18,000 14,000 9,000 900,000 600,000 350,000 150,000 1% 3% 4% 6% FF updates its uncollectible estimates on a monthly basis. The balance in the allowance for doubtful accounts was $30,000 as of November 30, 2006. During the month of December, FF had write-offs of $4,000 and recoveries of $1,000. Credit sales during the month were S1,300,000. 1. What is the balance of net accounts receivable as of December 31, 2006? 2. What is the bad debt expense in December 2006?
Explanation / Answer
Balance as % estimated Allowance of Dec 31 uncollectible 2006 Current accounts 900,000 1% 9000 Accounts