At the end of Year 5, your consulting firm has been hired by a local service...

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At the end of Year 5, your consulting firm has been hired by a local service firm to help forecast future uncollectible accounts. You ask the service firm to provide several years of data on the percentage of uncollectible accounts based on the age categories of accounts receivable at the beginning of the year. With these historical percentages, you estimate a trend line (dashed line) to predict the percentage of uncollectible accounts for Year 6, the upcoming year. Graphs were provided to management from your analysis of each of the three age categories, as well as balances of accounts receivable by age category at the end of Year 5 as follows: Percentage of Uncollectible Accounts: Not Yet Past Due 1-30 Days Past Due 8% 18% 6% 4% 4% 3% 16% 7% 6% 16 16 5% 14% 14% 12% Over 30 Days Past Due 46% 44% 43% 15% 42% 14% 42 42% 40% 41% 40% 0% 10% 38% Year 1 2 3 4 5 6 Year 1 2 3 4 5 6 Year 1 2 3 4 5 6 2% * Accounts Receivable by Age: End of Year 5 $140,000 $128,000 $120,000 $100,000 $84,000 $80,000 $60,000 $35,000 $40,000 $20,000 50 Not Yet Past Due 1-30 Days Past Due Over 30 Days Past Due At the end of Year 5, your consulting firm has been hired by a local service firm to help forecast future uncollectible accounts. You ask the service firm to provide several years of data on the percentage of uncollectible accounts based on the age categories of accounts receivable at the beginning of the year. With these historical percentages, you estimate a trend line (dashed line) to predict the percentage of uncollectible accounts for Year 6, the upcoming year. Graphs were provided to management from your analysis of each of the three age categories, as well as balances of accounts receivable by age category at the end of Year 5 as follows: Percentage of Uncollectible Accounts: Not Yet Past Due 1-30 Days Past Due 8% 18% 6% 4% 4% 3% 16% 7% 6% 16 16 5% 14% 14% 12% Over 30 Days Past Due 46% 44% 43% 15% 42% 14% 42 42% 40% 41% 40% 0% 10% 38% Year 1 2 3 4 5 6 Year 1 2 3 4 5 6 Year 1 2 3 4 5 6 2% * Accounts Receivable by Age: End of Year 5 $140,000 $128,000 $120,000 $100,000 $84,000 $80,000 $60,000 $35,000 $40,000 $20,000 50 Not Yet Past Due 1-30 Days Past Due Over 30 Days Past Due