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:

Intangible Asset

An asset that lacks physical substance, such as patents, trademarks, and copyrights, holding value for a business.

Land

A non-depreciable asset representing the earth's surface that a business owns for operation purposes.

Intangible Asset

An Intangible Asset is a non-physical asset possessed by a company, such as intellectual property, goodwill, and licenses, offering future economic benefits.

Goodwill

When a business is purchased, the difference between the price paid and the fair value of the net assets is goodwill. Goodwill may depend on brand names, business location, service, or other elements; it is a valuable asset that plays an important part in the expected rate of future earnings of a business.