Kirchhoff Industries has a past history of uncollectible accounts, as follows. Estimate the allowance for doubtful accounts

Kirchhoff Industries has a past history of uncollectible accounts, as follows. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 9-8.

                           Percent 

Age Class               Uncollectible

Not past due                  2%

1–30 days past due            4

31–60 days past due          18

61–90 days past due          40

Over 90 days past due        75

Answer:

Not Past Over

Balance Due 1–30 31–60 61–90 90

Total receivables 1,180,000 626,400 266,600 124,000 103,000 60,000

Percentage uncollectible 2% 4% 18% 40% 75%

Allowance for doubtful

accounts 131,712 12,528 10,664 22,320 41,200 45,000