Exercise 9-8 Aging accounts receivables (LO9-1)

On December 31, 20X1, Vale Company had an unadjusted credit balance of $1,000 in its Allowance for credit losses. Vale analyzes its historical experience related to receivables in specific age categories and estimates the expected credit loss for each category based on government forecasts of the economy. The resulting analysis is shown below.

Age	Amount	Estimated Credit Loss
030	days	$	60,000	5	%
3160	days		4,000	10
Over 60	days		2,000	70

Required:

What amount should Vale report as Allowance for credit losses in its December 31, 20X1, balance sheet?

Exercise 9-8 Aging accounts receivables (LO9-1)

On December 31, 20X1, Vale Company had an unadjusted credit balance of $1,000 in its Allowance for credit losses. Vale analyzes its historical experience related to receivables in specific age categories and estimates the expected credit loss for each category based on government forecasts of the economy. The resulting analysis is shown below.

Age	Amount	Estimated Credit Loss
030	days	$	60,000	5	%
3160	days		4,000	10
Over 60	days		2,000	70

Required:

What amount should Vale report as Allowance for credit losses in its December 31, 20X1, balance sheet?

Vale should report an Allowance for credit losses of