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Godfreid Company has accounts receivable of $95,400 at March 31, 2022
Godfreid Company has accounts receivable of $95,400 at March 31, 2022. Credit terms are 2/10, n/30. At March 31, 2022, there is a $2.100 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below.
Age of Accounts Balance, March 31 Estimated Percentage Uncollectible 2022 2021 Current $65.000 $75,000 2 % 1-30 days past due 12,900 8.000 5 31-90 days past due 10.100 2.400 30 Over 90 days past due 7,400 1.100 50 $95,400 $86,500
Determine the total estimated uncollectibles at March 31, 2022.
Total estimated uncollectibles
Expert Solution
| Computation of Total Estimated Uncollectibles at March 31, 2022: | |||||
| Age of Accounts | Balance March 31, | Percentage | Estimated | ||
| 2022 | Uncollectible | Bad Debts | |||
| Current | 65,000 | 2% | 1300 | ||
| 1-30 days past due | 12,900 | 5% | 645 | ||
| 31-90 days past due | 10,100 | 30% | 3030 | ||
| Over 90 days past due | 7,400 | 50% | 3700 | ||
| Total | 8675 | ||||
| So, Total Estimated Uncollectibles | $8,675 | ||||
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