Question
Estimating Doubtful Accounts Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical
Estimating Doubtful Accounts
Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company'saccounts receivableon December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Estimate what the proper balance of theallowance for doubtful accountsshould be as of December 31.
Performance Bike Co.
Estimation of Uncollectible Accounts
December 31
Age Interval Balance Estimated Uncollectible Accounts Percent Estimated Uncollectible Accounts Amount
Not past due $588,000 1/2% $
1-30 days past due 64,700 4
31-60 days past due 29,400 6
61-90 days past due 21,200 16
91-180 days past due 15,300 40
Over 180 days past due 11,200 70
Total $729,800 $
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