Question

Accounts Receivable Aging Method

1. Quebec Market reports the following analysis of potential losses in its accounts receivable:

Age Past Due              Receivable Balance                      Estimated Loss (%)

0-30 days past due     $67,200                                                0.5%

31-60 days past due   30,000                                                  1.8%

61-90 days past due   18,000                                                  4.3%

Over 90 days past due 3,300                                                  45.5%

Total                               $118,500

The balance of Allowance for Doubtful Accounts is $600 credit balance on December 31, 2019 prior to adjustments.

Required:

a. Compute bad debts expense that will be recorded for 2019. (Round to nearest whole dollar.)

b. What is the amount of net accounts receivable to be reported on Quebec Market’s December 31, 2019 balance sheet?

Answer 1