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Estimating Doubtful Accounts Imperial Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 2016, and a
Estimating Doubtful Accounts
Imperial Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 2016, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2016.
Imperial Bikes Co. | |||
Estimation of Uncollectible Accounts | |||
December 31, 2016 | |||
Age Interval | Balance | Estimated Uncollectible Accounts Percent | Estimated Uncollectible Accounts Amount |
Not past due | $480000 | 3/4% | $ |
1-30 days past due | 52800 | 3% | |
31-60 days past due | 24000 | 6% | |
61-90 days past due | 17300 | 17% | |
91-180 days past due | 12500 | 41% | |
Over 180 days past due | 9100 | 80% | |
Total | $595700 | $ |
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