Question

The following aging information pertains to Jacobsen Co.'s accounts receivable at December 31, 2021: Days Outstanding Amount Estimated % Uncollectible 0-30 $ 437,000 3 % 31-60 157,000 4 % 61-120 117,000 9 % Over 120 137,000 18 % During 2021, Jacobsen wrote off $19,700 in receivables and recovered $7,700 that had been written off in prior years. Jacobsen's December 31, 2020, allowance for uncollectible accounts was $48,500. Using the balance sheet approach, what amount of allowance for uncollectible accounts should Jacobsen report at December 31, 2021? Multiple Choice a.$62,280. b.$30,230. c.$54,580..d.$34,880.

Answer 1

c. $ 54,580

Step-by-step explanation:

Computations

Ageing Amount Uncollectible Uncollectible

% Amount

$ $

0 - 30 437,000 3 % 13,110

31 - 60 157,000 4 % 6,280

61 - 120 117,000 9 % 10,530

over 120 137,000 18 % 24,660

Total Estimated Uncollectible accounts 54,580

The question requires the amount of Uncollectible accounts that has to be reported which is based on the ageing report ( Balance sheet approach.)

The amounts written off and the the reinstated receivables are not relevant for the requirements to this question. This would be used to determine the bad debts expense for the year.