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Allowance for Doubtful accounts

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Please help with the following problem.

Age Interval Balance Percent Uncollectible
Not past due $567,000 1/2%
1-30 days past due 58,000 3
31-60 days past due 29,000 7
61-90 days past due 20,500 15
91-180 days past due 15,000 40
Over 180 days past due 10,500 75
$700,000

Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31,2010.

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Solution Summary

This response shows you how to estimate the needed ending balance in accounts receivable's allowance for doubtful accounts using the aging of receivables methods (not the percentage of sales method).

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Please see the attachment.

age balance percent needed
current $567,000 5% ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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