QUESTION: Alpha Company uses aging of Accounts Receivable to estimate uncollectible. The unadjusted Trial Balance amount of Accounts Receivable on December 31, 2016, has a balance that consists of:
|
Days outstanding
|
Amount
|
Estimated Uncollectible
|
|
0 - 60
|
$300,000
|
1%
|
|
61 - 120
|
90,000
|
2%
|
|
Over 120
|
100,000
|
6%
|
|
Total
|
$490,000
|
|
Activity during Fiscal Year 2016, for Alpha Company consisted of:
July 15 Alpha wrote of the Bravo Zulu Company account as not collectable for the amount of $8,500.
Oct. 20 Alpha company recovered $5,500 from the Charlie Delta Company for settlement of their prior debt that had been off during FY 2015.
Alpha Company's December 31, 2015 allowance for uncollectible accounts was $2,700/ Under the aging method, what amounts should Alpha Company report at December 31, 2016 for:
1. Allowance for Uncollectible Accounts
2. Bad Debt Expense