Question 5 12 points Alpha Company uses aging to estimate un

Question 5 (12 points) Alpha Company uses aging to estimate uncollectibles. At the end of the fiscal year. December 31, 2016, Accounts Receivable has a balance that consists of: Tap Dollar Value Age of Account Estimated Collectible t ch $100,000 30 days old 98% 50,000 30 to 60 days old 90% 61 to 120 days old 25,000 50% 10,000 120 days old 10%

Solution

Dollar Value

% Collectible

$ value collectible

$ value uncollectible

100000

98%

98000

2000

50000

90%

45000

5000

25000

50%

12500

12500

10000

10%

1000

9000

185000

156500

28500

1

Accounts Receivable

185000

2

Allowance for Doubtful Accounts

28500

3

Bad Debt Exp

(28500 + 1500)

=30000

Dollar Value	% Collectible	$ value collectible	$ value uncollectible
100000	98%	98000	2000
50000	90%	45000	5000
25000	50%	12500	12500
10000	10%	1000	9000
185000		156500	28500