Darling Company Ages Its Accounts Receivable to Estimate Bad Debts

question 38

Essay

Darling Company ages its accounts receivable to estimate bad debts for financial statement purposes.President Darling is at a meeting with creditors and needs to know his total accounts receivable balance.Unfortunately, Darling picked up the wrong computer report and has, instead, a summary printout of the company's estimated bad debts as follows:
$\begin{array}{lrr}\text { Age of Receivable }&\text { Bad Debt }&\text { \% wncollectible }\\0-30 \text { days } & \$ 1,750 & 0.5 \% \\31-60 \text { days } & 1,500 & 1.5 \% \\61-120 \text { days } & 4,000 & 8.0 \% \\\text { more than } 120 \text { days } & 17,500 & 70.0 \%\end{array}$ Calculate the accounts receivable balance based on Darling's bad debt summary.

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Definitions:

Business Strategy

A plan of action designed to achieve a company's long-term goals and compete effectively in the market.

Environmental Strategy

A plan of action adopted by an organization to interact with its environment in a sustainable and beneficial manner, often with the goal of reducing negative environmental impact.

Functional Strategy

A specific approach taken by a department or unit within an organization to achieve its goals and contribute to the overall business strategy.

Operating Strategy

A plan that outlines how a business will use its resources to achieve its objectives and maintain competitive advantage.