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    Uncollectible Accounts

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    On December 31, 2005, Vale Company had an unadjusted credit balance of $1,000 in its allowance for uncollectible accounts. An analysis of Vale's trade accounts receivable at that date revealed the following:

    Age Amount Estimated Uncollectible
    0-30 days $60,000 5%
    31-60 days $4,000 12%
    Over 60 days $2,000 70%

    What amount should Vale report as allowance for uncollectible accounts in its December 31, 2005 balance sheet?

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    Solution Preview

    The amount that should be reported as Allowance for Uncollectible Accounts is:
    5% * ...

    Solution Summary

    This solution looks at the allowance for uncollectible accounts based on accounts receivable data.