Question - Enge Company has accounts receivable of $108,000 at March 31.
Month of Sale
Balance,
March 31
Average Age of Receivables Outstanding
March$70,40016daysFebruary19,40048daysJanuary9,30073daysPrior to January8,900110days108,000
Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,500 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimate of bad debts is shown below.
Age of Accounts
Estimated Percentage
Uncollectible
1-30 days2.0%31-60 days5.0%61-90 days25.0%Over 90 days51.0%
(a) Determine the total estimated uncollectibles.