60 Million for Year 2011 Assuming the Company Used the Percent of Sales Method Determine

question 62

Short Answer

60 million for year 2011. The company estimates that 2% of sales will be uncollectible. On December 31, 2011, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $13,164. Corona prepares a schedule of its December 31, 2011, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:
$\begin{array}{rlr}\text { December } 31,2011 & \text { Age of Accounts } & \text { Expected Percent } \\\text { Accounts Receivable } & \text { Receivable } & \text { Uncollectible }\\\hline\$ 720,000 & \text { Not yet due } & 1.05 \% \\252,000 & 1 \text { to } 30 \text { days past due } & 1.80 \\49,600 & 31 \text { to } 60 \text { days past due } & 6.30 \\14,100 & 61 \text { to } 90 \text { days past due } & 31.75 \\2,850 & \text { Over } 90 \text { days past due } & 66.00\end{array}$
Assuming the company used the percent of sales method determine the amount that should be recorded for Bad Debt Expense on December 31, 2011.

---

Definitions:

Decay

The process by which information is lost from memory over time, typically due to the passage of time and lack of use.

Organic Amnesia

A form of amnesia caused by physical damage to the brain, leading to memory loss.

Psychogenic

Originating in the mind or in mental or emotional processes; having a psychological rather than a physiological cause.

Head Injury

Physical trauma to the head, which can lead to various levels of brain injury, ranging from mild concussions to severe brain damage.