On March 31, there was an unadjusted credit balance of $1 ,000 in the allowance for uncollectible accounts

Economics Apr 02, 2021

On March 31, there was an unadjusted credit balance of $1 ,000 in the allowance for uncollectible accounts. An analysis of trade accounts receivable at that date revealed the following: Estimated
Age
Amount Uncollectible
0-30 days $60,000 5% 31-60 days 4,000 10% Over 60 days 2,000 70%
What amount should be reported as allowance for uncollectible accounts in the March 31 balance sheet?

B. $4,000 C. $3,800 D. $3,000

Expert Solution

Answer

A .

Explanation

Calculation of amount required to be recorded as allowance for uncollectible accounts in it's December 31 balance sheet:

Age	Amount	Estimated uncollectible	Amount of estimated uncollectible
0-30 days	60000	5%	3000
31-60 days	4000	10%	400
Over 60 days	2000	70%	1400
Total			4800

So, Correct option is A "$4,800".

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote