Newbury Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 2012, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Age interval Balance Percent Uncollectible
Not Past Due $667,000 ½%
1-30 Days Past Due $158,000 2%
31-60 Days Past Due $54,000 5%
61-90 Days Past Due $20,500 15%
91-180 Days Past Due $15,000 40%
Over 180 Days Past Due $10,500 75%
$925,000
Required:
Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 2012.