On Dec 31, 2016, Rawda Company had accounts receivable of $750,000 and allowance for doubtful accounts...

70.2K

Verified Solution

Question

Accounting

On Dec 31, 2016, Rawda Company had accounts receivable of$750,000 and allowance for doubtful accounts that had a debitbalance of $10,000. The company uses an aging schedule (agingmethod) to estimate its uncollectible accounts as shown in thefollowing table:
# of Days Outstanding
Amounts
Estimated % Uncollectible
0-30
$ 200,000
2%
31-60
200,000
4%
61-90
200,000
6%
Over 90
150,000
8%
Requirements:
What is the required balance for the allowance of doubtfulaccounts on Dec 31, 2016?
What is the net realizable value of the accounts receivable onDec 31, 2016?
If on May 1, 2017, one of the company’s customer that owed thecompany $21,000 filed bankruptcy, what is the balance of theallowance for doubtful accounts on May 1, 2017?
If On July 31, 2017, the customer that filed a bankruptcy onMay 1, 2017 came back and paid Radwda $15,000, what is the balanceof the allowance for doubtful accounts on July 31, 2017?

Answer & Explanation Solved by verified expert

3.8 Ratings (708 Votes)

a The required balance for the allowance of doubtful accounts on Dec 31 2016 Days Outstanding Amounts Estimated Uncollectible Allowance of doubtful 030 200000 2 4000 3160 200000 4 8000 6190 200000 6 12000 Over 90 150000 8 12000 Total 36000 Allowance of doubtful account is amount multiplied by the estimated uncollectible rate The total allowance of doubtful accounts is 36000 Allowance for See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

# of Days Outstanding	Amounts	Estimated % Uncollectible
0-30	$ 200,000	2%
31-60	200,000	4%
61-90	200,000	6%
Over 90	150,000	8%