Domino Company earned $180,000 of revenue on account during Year 1. There was no beginning balance in the accounts receivable and allowance accounts. During Year 1, Domino collected $126,000 of cash from its receivables accounts.

Required:

I. What is the amount of uncollectible accounts expense that will be recognized on the Year 1 income statement if the company estimates that it will be unable to collect 3% of its sales on account? (3 points)

II. What is the amount of uncollectible accounts expense that will be recognized on the Year 1 income statement if the company estimates that it will be unable to collect 3% of its account receivable? (5 points)

For Reqiured III:

Miller Company ages its accounts receivable to estimate uncollectible accounts expense. Miller began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $85,500 and $6,800, respectively. In preparation for the company's estimate of uncollectible accounts expense for Year 2, Miller prepared the following aging schedule:

Number of Days Past Due	Receivables Amount	% likely to be uncollectible
Current	$104,000	1%
0-30	45,000	5%
31-60	9,920	10%
61-90	4,440	25%
Over 90	3,800	50%

Required:

III: What amount will be reported as uncollectible accounts expense on the Year 2 income statement?