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Preparing an Aging Schedule for Accounts Receivable

Laura's Ad Agency accounts receivable totaled $451,000 on February 28, 2011. An aging summary of receivables at this date follows:

End of Month Amount
February 2011 $250,000
January 2011 100,000
December 2010 50,000
November 2010 30,000
October 2010 and before 21,000

The firm extends 30-day credit terms to all of its customers.

a) prepare an aging schedule for Laura's agency
b) evaluate the collection performance
c) what percentage is overdue

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Solution Summary

Laura's Ad Agency accounts receivable totaled $451,000 on February 28, 2011. An aging summary of receivables at this date follows:

End of Month Amount
February 2011 $250,000
January 2011 100,000
December 2010 50,000
November 2010 30,000
October 2010 and before 21,000

The firm extends 30-day credit terms to all of its customers.

a) prepare an aging schedule for Laura's agency
b) evaluate the collection performance
c) what percentage is overdue

$2.19