Perry Materials Supply Uses the Aging Method to Account for Uncollectible

question 30

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. $\begin{array}{|l|r|r|r|r|r|} \hline \text { Customer } & \text { 1-30 Days } & \text { 31-60 Days } & \text { 61-90 Days } & \begin{array}{c}\text { Over } 90 \\\text { Days }\end{array} & \begin{array}{c}\text { Total } \\\text { Balance }\end{array}\\\hline \text { Johnson } & \$ 4,600 & \$ 3,200 & & & \$ 7,800 \\\hline \text { Hot Pots, Inc. } & & & \$ 800 & \$ 1,000 & 1,800 \\\hline \text { Potter } & 40,000 & 550 & & & 40,550 \\\hline \text { Harrison } & & 3,600 & 900 & & 4,500 \\\hline \text { Marx } & & & 2,000 & 50 & 2,050 \\\hline \text { Younger } & 65,000 & & & & 65,000 \\\hline \text { Merry Maids } & 5,900 & & & & 5,900 \\\hline \text { Acher } & 12,000 & 6,400 & & & 18,400 \\\hline \text { Total } & \$ 127,500 & \$ 13,750 & \$ 3,700 & \$ 1,050 & \$ 146,000 \\\hline \text { Uncollectible percentage } & & & & & \\\hline \text { Estimated uncollectible amount } & & & & & \\\hline\end{array}$

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:

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Individuals who organize, manage, and assume the risks of a business or enterprise, often introducing new products or services.

Production Techniques

The methods or processes used in the creation or manufacture of goods and services.

Costs

The expense required for something; the money spent on or needed for a project, product, or service.

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An individual or entity focused on making decisions that are expected to result in the highest possible profit.