Kelly’s Boutique
Ch 7-06 Solution
Allowance for Uncollectible Accounts
Aging Method Information Amount
Past experience
ratio
Current 600,000$ 4.00%
0 – 30 Days Past Due 39,000$ 8.00%
Past experience ratio for % of sales method 0.80%
Facts:
Accounts receivable balance (beg) 500,000
Sales on account 6,025,000
Collections on account (5,800,000)
Write-offs of accounts receivable (50,000)
Accounts receivable balance (end) 675,000
Percentage of Sales Method
Allowance for uncollectible accounts (beg) 37,000
Write-offs of accounts receivable (50,000)
Uncollectible accounts expense 48,200
Allowance for uncollectible accounts (end) 35,200
Aging Method
Allowance for uncollectible accounts (beg) 37,000
Write-offs of accounts receivable (50,000)
Uncollectible accounts expense 52,220
Allowance for uncollectible accounts (end) 39,220
31 – 60 Days Past Due 18,000$ 20.00%
61 – 90 Days Past Due 10,000$ 25.00%
> 90 Days Past Due 8,000$ 75.00%