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Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the companys accounts receivable on December 31 and a historical analysis of the
- Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the companys accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Estimate the proper balance of the allowance for doubtful accounts as of December 31.
\begin{tabular}{lrc} Age Interval & \multicolumn{1}{c}{ Balance } & PercentUncollectible \\ \hline Not past due & $3,250,000 & 0.8% \\ 1-30 days past due & 1,050,000 & 2.4 \\ 3160 days past due & 780,000 & 7.0 \\ 61-90 days past due & 320,000 & 18.0 \\ 91180 days past due & 240,000 & 34.0 \\ Over 180 days past due & 150,000 & 85.0 \\ & $5,790,000 & \end{tabular}Step by Step Solution
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