Seminar Five Problem Solutions (1) - Chapter 8 Problem...

Chapter 8 Problem Solutions
P2. Accounts Receivable Aging Method
1.
Techno Designs Store
Aging Analysis of Accounts Receivable
January 31, 2015
1–30 31–60 61–90 Over
Customer Not Yet Days Days Days 90 Days
Account Total Due Past Due Past Due Past Due Past Due
Balance
Forward
$793,791 $438,933 $149,614 $106,400 $57,442 $41,402
J. Curtis
11,077 11,077
T. Dawson
9,314 9,314
L. Zapata 8,664 8,664
R. Copa 780 780
E. Land
14,710 14,710
S. Qadri
6,316 6,316
A. Rosenthal
4,389 4,389
$849,041 $452,636 $175,401 $115,064 $63,758 $42,182
2.
Accounts Receivable
Beginning balance
$ 442,341
Credit sales
3,722,000
Subtotal $4,164,341
Less: Sales returns and allowances
$ 60,000
Accounts written off
44,300
Collections from customers
3,211,000 3,315,300
Ending balance $ 849,041
Allowance for Uncollectible Accounts
Beginning credit balance
$ 43,700
Less accounts written off
44,300
Debit balance at end of year $ 600

P2. Accounts Receivable Aging Method (Concluded)
3. Techno Designs Store
Estimated Uncollectible Accounts
January 31, 2015
Percentage Allowance for
Considered Uncollectible
Amount Uncollectible Accounts*
Not yet due $452,636 2 $ 9,053
1–30 days past due 175,401 5 8,770
31–60 days past due 115,064 15 17,260
61–90 days past due
63,758 25 15,940
Over 90 days past due
42,182
50
21,091
$849,041
$72,114
*Rounded
4. Desired balance $72,114
Debit balance in allowance account
600
Amount of expense $72,714