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 Over 30 Days Past Due 8% 18% 46% 6% 1% 16% 17% 44% 6% 16% 1498 43% 4% 5% 14% 15% 42% 4% 14% 14% 42% 2% 3% 12% 40% 429A 41% 40% 0% 10% 38% Year 1 N 3 4 5 6 Year 1 2 3 4 5 6 Year 1 2 34 5 6 Accounts Receivable by Age: End of Year 5 $128,000 $140,000 $120,000 $100,000 $84,000 $80,000 $60,000 $40,000 $35,000 $20,000 $0 Not Yet Past Due 1-30 Days Past Due Over 30 Days Past Due Click here to open the graph(s) in a new tab. Required: 1. Which age categories predicts the lowest percentage of uncollectible accounts for Year 6? 2. Which age categories predicts the highest percentage of uncollectible accounts for Year 6? 3. What is the dollar amount of accounts receivable that are 1-30 days past due at the end of year 5 (bottom graph)? 4. Calculate the total amount of estimated uncollectible accounts for Year 6 (Hint: Use all three age categories)? 5. Assume the balance of Allowance for Uncollectible Accounts is $4,850 (credit) at the end of Year 5 (before any adjustment). Prepare the adjusting entry at the end of Year 5. 6. Determine the amount of net accounts receivable the company would report at the end of Year 5. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Which age categories predicts the lowest percentage of uncollectible accounts for Year 6? Not yet past due O1-30 days past due Over 30 days past due Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Which age categories predicts the highest percentage of uncollectible accounts for Year 6? Not yet past due 1-30 days past due Over 30 days past due Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 What is the dollar amount of accounts receivable that are 1-30 days past due at the end of year 5 (bottom graph)? Accounts Receivable Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate the total amount of estimated uncollectible accounts for Year 6 (Hint: Use all three age categories)? Estimated Uncollectible Accounts Assume the balance of Allowance for Uncollectible Accounts is $4,850 (credit) at the end of Year 5 (before any adjustment). Prepare the adjusting entry at the end of Year 5. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine the amount of net accounts receivable the company would report at the end of Year 5. Net Accounts Receivable
