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.
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.
Definitions:
Average Payables Period
A financial metric that calculates the average number of days it takes a company to pay its vendors and suppliers.
Account Payables
Accounts payable refers to short-term financial obligations or debts a company owes to its suppliers or creditors for goods and services received.
Annual Cost
The total expenses incurred by a company or individual in one year.
Market/Book Ratio
A financial ratio comparing a company's market value to its book value, indicating how highly the market values the company.
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