To determine the estimated uncollectibles for Gotfried Company as of March 31, 2022, let’s break down the accounts receivable balance into categories and apply the given estimated percentages of uncollectible accounts for each category.
Here's the information we have:
- Total Accounts Receivable on March 31, 2022: \[tex]$95,400
- Credit balance in Allowance for Doubtful Accounts prior to adjustment: \$[/tex]2,100
The balances of accounts receivable by age category and their corresponding estimated percentages of uncollectibles are:
1. Current Accounts Receivable:
- Balance: \[tex]$65,000
- Estimated Percentage Uncollectible: \(2\%\)
2. 1-30 Days Past Due:
- Balance: \$[/tex]12,900
- Estimated Percentage Uncollectible: [tex]\(5\%\)[/tex]
3. 31-90 Days Past Due:
- Balance: \[tex]$10,100
- Estimated Percentage Uncollectible: \(30\%\)
4. Over 90 Days Past Due:
- Balance: \$[/tex]7,400
- Estimated Percentage Uncollectible: [tex]\(50\%\)[/tex]
We will calculate the estimated uncollectibles for each category separately and then sum them to get the total estimated uncollectibles:
1. Current Accounts Receivable:
- Calculation: [tex]\( \$65,000 \times 2\% = \$1,300 \)[/tex]
2. 1-30 Days Past Due:
- Calculation: [tex]\( \$12,900 \times 5\% = \$645 \)[/tex]
3. 31-90 Days Past Due:
- Calculation: [tex]\( \$10,100 \times 30\% = \$3,030 \)[/tex]
4. Over 90 Days Past Due:
- Calculation: [tex]\( \$7,400 \times 50\% = \$3,700 \)[/tex]
The total estimated uncollectibles add up as follows:
[tex]\[ \$1,300 + \$645 + \$3,030 + \$3,700 = \$8,675 \][/tex]
Therefore, the total estimated uncollectibles for Gotfried Company as of March 31, 2022, amount to \$8,675.
