Techno Designs Store uses the accounts receivable aging method to

Techno Designs Store uses the accounts receivable aging method to

Techno Designs Store uses the accounts receivable aging method to estimate uncollectible accounts

Subject: Business    / Accounting
Question

Techno Designs Store uses the accounts receivable aging method to estimate uncollectible accounts. On February 1, 2014, the balance of the Accounts Receivable account was a debit of $442,341, and the balance of Allowance for Uncollectible Accounts was a credit of $43,700. During the year, the store had sales on account of $3,722,000, sales returns and allowances of $60,000, worthless accounts written off of $44,300, and collections from customers of $3,211,000. As part of the end-of-year (January 31, 2015) procedures, an aging analysis of accounts receivable is prepared. The analysis, which is partially complete, follows.
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Customer
Account

Total
Not Yet
Due    1–30
Days
Past Due    31–60
Days
Past Due    61–90
Days
Past Due    Over 90
Days Past
Due
Balance
Forward    $793,791    $438,933    $149,614    $106,400    $57,442    $41,402

To finish the analysis, the following accounts need to be classified:
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Account    Amount    Due Date
J. Curtis    $11,077    Jan. 15
T. Dawson    9,314    Feb. 15 (next fiscal year)
L. Zapata    8,664    Dec. 20
R. Copa    780    Oct. 1
E. Land    14,710    Jan. 4
S. Qadri    6,316    Nov. 15
A. Rosenthal    4,389    Mar. 1 (next fiscal year)
$55,250

From past experience, the company has found that the following rates are realistic for estimating uncollectible accounts:

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Time    Percentage Considered
Uncollectible
Not yet due    2
1–30 days past due    5
31–60 days past due    15
61–90 days past due    25
Over 90 days past due    50

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Using the information above, complete the aging analysis of accounts receivable.

Techno Designs Store
Aging Analysis of Accounts Receivable
January 31, 2015
Customer Account

Total

Not Yet Due

1–30 Days Past Due

31–60 Days Past Due

61–90 Days Past Due

Over 90 Days Past Due
Balance Forward

$

$

$

$

$

$
J. Curtis

T. Dawson

L. Zapata

R. Copa

E. Land

S. Qadri

A. Rosenthal

$

$

$

$

$

$

Compute the end-of-year balances (before adjustments) of Accounts Receivable and Allowance for Uncollectible Accounts.
Accounts Receivable: $
Allowance for Uncollectible Accounts: $ SelectdebitcreditCorrect 3 of Item 2

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Prepare an analysis computing the estimated uncollectible accounts. Enter the percentages as whole numbers and do not use the percent sign. For example, 15% would be entered as 15. Round allowance for uncollectible accounts answers to the nearest dollar.

Techno Designs Store
Estimated Uncollectible Accounts
January 31, 2015
Amount

Percentage Considered Uncollectible

Allowance for Uncollectible Accounts
Not yet due

$

$
1-30 days past due

31-60 days past due

61-90 days past due

Over 90 days past due

$

$

How much is Techno Designs Store’s estimated uncollectible accounts expense for the year? Round your answer to nearest whole number.$
What role do estimates play in applying the aging analysis? What factors might affect these estimates? The input in the box below will not be graded, but may be reviewed and considered by your instructor.