Exercise 6-21 Aging ScheduleforAccounts Receivable

Outdoor Living has the following accounts receivable at year end, broken down by age:

age amount

current 150,000

one month ver due 40,000

two months overdue 18,000

three months over due 8,000

Prior experience has shown that the company will probably collect 95% of its current receivables. Furthermore, the collection percentage will fall by 15% for each additional month an account receivable remains outstanding past its due date.

Required:

Develop an estimate of Outdoor Living's allowance account balance. $