Q5-58. Van Gogh Company uses the aging method to adjust the allowance for uncollectible accounts at the end of the period. At December 31, the balance of accounts receivable is $240,000 and the allowance for uncollectible accounts has a credit balance of $5,000 (before adjustment).

An analysis of accounts receivable produced the following age groups:

Based on past experience, Van Gogh estimates that the percentage of accounts that will prove to be uncollectible within the three age groups is 2%, 8%, and 20%, respectively. Based on these facts, the adjusting entry for uncollectible accounts should be made in the amount of

a. $9,600.

c. $4,600.

b. $5,000.

d. $14,600.
Q5-59. Refer to Question 5-58. The net receivables on the Balance Sheet is

a. $230,400.

c. $235,400.

b. $235,000.

d. $225,400.

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Current.............. 60 days past due.......... Over 60 days past due.. $180,000 50,000 10,000 $240,000