Chapter 1 Problem 5-17
Percent of Required
Amount Uncollectible allowance
1. Not yet due 1,700,000 - -
1 – 30 days past due 1,200,000 5% 60,000
31 – 60 days past due 100,000 25% 25,000
61 – 90 days past due 150,000 50% 75,000
Over 90 days past due 1,200,000 100% 120,000
3,270,000 280,000
2. Allowance – January 1 170,000
Receivables 30,000
Doubtful accounts expense (squeeze) 345,000
Total 545,000
Less: Writeoff (235,000 + 30,000) 265,000
Required allowance – December 31 280,000
3. Accounts receivable 3,270,000
Less: Allowance for doubtful accounts 280,000
Net realizable value 2,990,000
b. Doubtful accounts 170,000
Allowance for doubtful accounts 170,000
Allowance – January 1
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