A Company Expects 5% of Its Newer Accounts Receivable to Be

question 45

True/False

A company expects 5% of its newer accounts receivable to be uncollectible and 20% of its older accounts to be uncollectible.If the company has $40,000 of newer accounts and $5,000 of older accounts,the total estimate of uncollectible accounts is $2,000.Estimated uncollectible accounts = ($40,000 × 5%)+ ($5,000 × 20%)= $3,000.

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