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Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical analysis of the
Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on 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 the allowance for doubtful accounts should 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 | $870,000 | 3/4% | $ |
1-30 days past due | 95,700 | 4 | $ |
31-60 days past due | 43,500 | 6 | $ |
61-90 days past due | 31,300 | 17 | $ |
91-180 days past due | 22,600 | 42 | $ |
Over 180 days past due | 16,500 | 80 | $ |
Total | $1,079,600 | $ |
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