Question

Kirchhoff Industries has a past history of uncollectible accounts, as follows.

Age Class Percent Uncollectible
Not past due 2%
1-30 days past due 4
31-60 days past due 18
61-90 days past due 40
Over 90 days past due 75

Required:
Estimate the allowance for doubtful accounts.

Answer 1

Answer:

The balance of allowance for doubtful accounts is $131,712.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file for the complete question.

The explanation of the answer is now given as follows:

Note: See the attached excel file for the estimated allowance for doubtful accounts.

In the attached excel file, the allowance for doubtful accounts for each  Percentage uncollectible is calculated as follows:

Allowance for doubtful accounts = Total receivables *  Percentage uncollectible.

Also, the balance of allowance for doubtful accounts is calculated by adding the allowance for doubtful accounts of the Age Classes.

From the attached excel file, the balance of allowance for doubtful accounts is $131,712.