Question

A10 AB EF G H I J K L M N O P Hendrix Company has a balance in their Accounts Receivable account of $525,000 as of December 31. Their terms are net 30 days. Of the $525,000: $350,000 was sold in December; $125,000 was sold in November; $25,000 was sold in October; $15,000 was sold in September; and $10,000 was sold prior to September. Based on past experience, Hendrix estimates that the percent likely to be uncollectible for current accounts is .5%; 1% for accounts 0-30 days past due; 1.5% for accounts 30-60 days past due; 2.5% for accounts 60-90 days past due; and 5% for accounts over 90 days. Based on these figures, use the table below to calculate the balance in the Allowance for Doubtful Accounts as of December 31. Use formulas for column D. Number of Days Past Due Accounts Receivable Balance Percent Likely to be Uncollectible Allowance Balance

Answer 1

Answer:

Number of Days Past Due	Accounts Receivable Balance	Percent Likely to be Uncollectible	Allowance Balance
Current	$350,000	0.5%	$1,750
0-30	$125,000	1%	$1,250
30-60	$25,000	2%	$375
60-90	$15,000	2.5%	$375
Over 90 days	$10,000	5%	$500
Total	$525,000		$4,250

Thus,

The balance in Allowance for Doubtful accounts as of December 31 is $4,250