Perry Materials Supply Uses the Aging Method to Account for Uncollectible

question 132

Essay

Perry Materials Supply uses the aging method to account for uncollectible accounts. At the end of the year, the balance in Accounts receivable was $146,000 and Perry prepared the following aging schedule.
$$\begin{array} { | l | r | r | r | r | r | } \hline { \text { Customer } } & 1 - 30 \text { days } & 31 - 60 \text { days } & 61 - 90 \text { days } & \begin{array} { c } \text { Over 90 } \\\text { days }\end{array} & \begin{array} { r } \text { Total } \\\text { Balance }\end{array} \\\hline \text { Tohnson } & \$ 4,600 & \$ 3,200 & & & \$ 7,800 \\\hline \text { Hot Pots, Inc. } & & & \$ 800 & \$ 1,000 & 1,800 \\\hline \text { Potter } & 40,000 & 550 & & & 40,550 \\\hline \text { Harrison } & & 3,600 & 900 & & 4,500 \\\hline \text { Marx } & & & 2,000 & 50 & 2,050 \\\hline \text { Younger } & 65,000 & & & & 65,000 \\\hline \text { Merry Maids } & 5,900 & & & & 5,900 \\\hline \text { Archer } & 12,000 & 6,400 & & & 18,400 \\\hline \text { Total } & \$ 127,500 & \$ 13,750 & \$ 3,700 & \$ 1,050 & \$ 146,000 \\\hline \text { Uncollectible percentage } & & & & & \\\hline \text { Estimated uncollectible } & & & & & \\\text { amount } & & & & & \\\hline\end{array}$$ Based on past history, Perry uses 2% for current receivables (1-30 days), 10% for 31-60 days, 20% for 61-90 days, and 40% for over 90 days. Please complete the schedule and calculate the estimated amount of uncollectible accounts.

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Definitions:

Organic Product

A compound or material which results from the transformation of organic precursors in a chemical reaction, usually in organic synthesis.

Reaction

A process in which substances, the reactants, transform into different substances, the products.

Conversion

The process of changing something into a different form or substance, often used in the context of chemical reactions.

Reaction

A process in which substances, the reactants, undergo a transformation to produce new substances, the products.