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Part 1: In this assignment, you will use the Excel files called Acc 304-AR-2020fall to evaluate a company's Accounts Receivables and the related Allowance for
Part 1: In this assignment, you will use the Excel files called "Acc 304-AR-2020fall" to evaluate a company's Accounts Receivables and the related Allowance for Uncollectible Accounts. . The Excel file consists of Cambridge Corporation's sales and accounts receivable data for 2019. Cambridge sells restaurant equipment and operates in 10 different locations (Location 1, 2.....10) in the United States. Each location tracks its own sales and accounts receivables. The spreadsheet has 8 different columns: COLUMN DESCRIPTION TRANSACTION NO Sale transaction LOCATION ID Branch location CUSTOMER ID Specific customer CURRRENT SALES Sales made in 2019 SALES DATE Date of sale AR PRIOR BALANCE Accounts receivable 2018 ending balance AR CURRENT BALANCE Accounts receivable 2019 ending balance CURRENT YEAR END Fiscal year ending date Cambridge sets up an aging schedule with five different time categories 0-30 days, 31-60 days, 61-90 days, 91 to 120 days, and over 120 days. Based on past experience, Cambridge applies percentages below to different time categories to estimate the required balance in the Allowance for Doubtful Accounts. Time Estimated % of AR as Category Uncollectible under 30 days 0.80% 31-60 days 4% 61-90 days 15% 91-120 days 20% over 120 days 25%
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