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Preparing an Aging Schedule for Accounts Receivable

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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
Similar Posting

Preparing an adjusting entry

10-The following information was abstracted from the records of the Hooper Corporation:

Accounts Receivable, December 31, 2011 ............ $ 590,000
Allowance for Doubtful Accounts before adjustment,
December 31, 2011 ............................... 18,000 (dr)
Sales--2011........................................ 2,180,000
Sales Discounts--2011 ............................. 18,000
Sales Returns--2011 ............................... 27,000

Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions:
(1) 3 percent of outstanding accounts receivable are uncollectible.
(2) 1.5 percent of 2011 net sales are uncollectible.
(3) An aging schedule of the accounts shows that $21,400 of the accounts are uncollectible.

Note that the allowance for doubtful accounts above is a DEBIT balance!

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