Starlight, a Broadway media firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end an aging of the accounts receivable produced the following classification: Not...


Starlight, a Broadway media firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end an aging of the accounts receivable produced<br>the following classification:<br>Not yet due..<br>$500,000<br>1-30 days past due.<br>110,000<br>31-60 days past due.<br>50,000<br>61-90 days past due..<br>30,000<br>Over 90 days past due..<br>60,000<br>Total.<br>$750,000<br>On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age groups to be as follows: Group 1, 1%, Group 2, 3%,<br>Group 3, 10%; Group 4, 20%; and Group 5, 50%. The Allowance for Doubtful Accounts before adjustments at December 31 showed a credit balance of $4,700.<br>Vhat is the estimated amount of uncollectible accounts based on the above classification by age groups and the amount of the adjustment needed to bring the Allowance<br>or Doubtful Accounts to the proper amount?<br>DA. $44,600 and $4,700<br>O B. $49,300 and $44,600<br>O C. $49,300 and $54,000<br>O D. $52,300 and $44,600<br>tionale:<br>

Extracted text: Starlight, a Broadway media firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end an aging of the accounts receivable produced the following classification: Not yet due.. $500,000 1-30 days past due. 110,000 31-60 days past due. 50,000 61-90 days past due.. 30,000 Over 90 days past due.. 60,000 Total. $750,000 On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age groups to be as follows: Group 1, 1%, Group 2, 3%, Group 3, 10%; Group 4, 20%; and Group 5, 50%. The Allowance for Doubtful Accounts before adjustments at December 31 showed a credit balance of $4,700. Vhat is the estimated amount of uncollectible accounts based on the above classification by age groups and the amount of the adjustment needed to bring the Allowance or Doubtful Accounts to the proper amount? DA. $44,600 and $4,700 O B. $49,300 and $44,600 O C. $49,300 and $54,000 O D. $52,300 and $44,600 tionale:

Jun 11, 2022
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