Question

Exercise 8-5

Blossom Company has accounts receivable of $191,000 at September 30, 2017. An analysis of the accounts shows the following:

Month of Sale		Balance
September			$134,730
August			28,293
July			15,851
April, May, and June			12,126
			$191,000

Credit terms are 2/10, n/30. The unadjusted balance in the Allowance for Doubtful Accounts on September 30, 2017, is $2,260 debit. The company uses an aging schedule to estimate uncollectible accounts. The company’s percentage estimates of bad debts are as follows:

Number of Days Outstanding		Estimated % Uncollectible
0–30			3%
31–60			10%
61–90			25%
Over 90			60%

 

(a)

Prepare an aging schedule to determine the total estimated uncollectible accounts at September 30, 2017. (Round answers to 0 decimal places, e.g. 5,275.)

Age of Accounts		Amount				%				Estimated Uncollectible
0-30 days outstanding			$134,730				3%			$
31-60 days outstanding			28,293				10%
61-90 days outstanding			15,851				25%
Over 90 days outstanding			12,126				60%
										$