The Totals from the Savoy Company's Schedule of Accounts Receivable

question 40

Essay

The totals from the Savoy Company's Schedule of Accounts Receivable by Age as of the end of the current year are shown below. $\begin{array} { l } \text { Account }&\text { Balance }&\text { Current }&{1-30}&{31-60}&\text { Over } 60 \\\hline\text { Totals } & \$ 11,800 & \$ 9,200 & \$ 1,500 & \$ 600&\$ 500\\\hline\end{array}$
As of the end of the current year, there is a debit balance of $75 in the Allowance for Doubtful Accounts.
1. Compute the estimated uncollectible accounts using the following rates. $\begin{array}{lr}\text { Current } & 1 \% \\1-30 \text { days past due } & 5 \% \\31-60 \text { days past due } & 15 \% \\\text { Over } 60 \text { days past due } & 40 \%\end{array}$ 2. Compute the amount of the adjusting entry for uncollectible accounts expense.

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Definitions:

Estimated Average

A calculation that aims to determine the central or typical value of a data set or projection.

Average Rate

A calculation representing the central or typical value in a set of rates, or a fixed rate determined as an average from several rates.

Capital Investment

Funds spent by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Annual Income

The total amount of money earned by an individual or business in one year from all sources, before taxes.