Question

net zero products, a wholesaler of sustainable raw materials, prepares the following aging of receivables analysis.

	total	days past due	days past due	days past due	days past due	days past due
accounts receivable	$ 185,000	$ 100,000	$ 38,000	$ 17,000	$ 14,000	$ 16,000
percent uncollectible		1%	2%	4%	6%	10%

complete this question by entering your answers in the tabs below.

required 1 required 2

estimate the balance of the allowance for doubtful accounts using the aging of accounts receivable method.

	accounts receivable	×	percent uncollectible (%)	=	estimated uncollectible
1 to 30:		×		=
31 to 60:		×		=
61 to 90:		×		=
over 90:		×		=
estimated balance of allowance for uncollectibles

Explanation:

Step1: Calculate for Not due

Accounts receivable = $100,000, Percent uncollectible = 1%
Estimated Uncollectible = $100,000 × 1% = $1,000

Step2: Calculate for 1 to 30

Accounts receivable = $38,000, Percent uncollectible = 2%
Estimated Uncollectible = $38,000 × 2% = $760

Step3: Calculate for 31 to 60

Accounts receivable = $17,000, Percent uncollectible = 4%
Estimated Uncollectible = $17,000 × 4% = $680

Step4: Calculate for 61 to 90

Accounts receivable = $14,000, Percent uncollectible = 6%
Estimated Uncollectible = $14,000 × 6% = $840

Step5: Calculate for Over 90

Accounts receivable = $16,000, Percent uncollectible = 10%
Estimated Uncollectible = $16,000 × 10% = $1,600

Step6: Sum all estimated uncollectible

Total = $1,000 + $760 + $680 + $840 + $1,600 = $4,880

Answer:

The estimated balance of the Allowance for Doubtful Accounts is $4,880.