Question
Hatfield Company has credit sales of $800,000 for year 2019. Hatfield prepares a schedule of its December 31, 2019, accounts receivable by age. On the
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Hatfield Company has credit sales of $800,000 for year 2019. Hatfield prepares a schedule of its December 31, 2019, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
Hatfield Company has credit sales of $800,000 for year 2019. Hatfield prepares a schedule of its December 31, 2019, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
| December 31, 2019 Accounts Receivable | Age of Accounts Receivable | Expected Percent Uncollectible | ||
| $ | 595,000 | Not yet due | 1.45 | % |
|
| 150,000 | 1 to 30 days past due | 2.20 |
|
|
| 30,000 | 31 to 60 days past due | 6.70 |
|
|
| 20,000 | 61 to 90 days past due | 33.75 |
|
|
| 5,000 | Over 90 days past due | 70.00 |
|
Estimate the required balance of the Allowance for Doubtful Accounts on December 31, 2019, using the aging of accounts receivable method. Show your work.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
