Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
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 recelvable by age category at the end of Year 5 as follows: Percentage of Uncollectible Accounts: 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 ot the end of Year 5 . (2) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 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. (Ir no entry is required for a particular transactionvevent, select "No Joumal Entry Required in the first account feld.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Auditing And Other Assurance Services

Authors: Ray Whittington, Kurt Pany

13th Edition

007232726X, 9780072327267

More Books

Students also viewed these Accounting questions

Question

What is absorption costing?

Answered: 1 week ago

Question

plan how to achieve impact in practice from your research;

Answered: 1 week ago