Question

Williamson Distributors separates its accounts receivable into three age groups for purposes of estimating the percentage of uncollectible accounts. 1. Accounts not yet due= $40,000; estimated uncollectible = 5%. 2. Accounts 1-30 days past due = $11,000; estimated uncollectible = 20%. 3. Accounts more than 30 days past due= $5,000; estimated uncollectible = 30%. Compute the total estimated uncollectible accounts.

Answer 1

$5,700.

Step-by-step explanation:

Not yet due: $40,000 * 5% = 2,000

1-30 days past due: $11,000 * 20% = 2,200

30+ days past due: $5,000 * 30% = 1,500

to sum it up

2,000 + 2,200 + 1,500 = $5,700.