ABC Company uses the agingminusofminusreceivables method to estimate uncollectible receivables. ABC Company has $ 140 comma 000 in Accounts Receivable that is over 90 days past due and 85​% is estimated​ uncollectible, $ 160 comma 000 that is 30 minus 90 days past due and 45​% is estimated​ uncollectible, and $ 180 comma 000 that is less than 30 days past due and 10​% is estimated uncollectible. What is the estimated total​ uncollectible?

Answer 1

To calculate the estimated total uncollectible accounts using the aging of receivables method, we need to calculate the uncollectible amount for each category of accounts receivable and then sum these amounts.

1. Accounts Receivable Over 90 Days Past Due:

   • Amount: $140,000
   • Estimated Uncollectible Percentage: 85%
   • Estimated Uncollectible: \[ 140,000 \times 0.85 = 119,000 \]

2. Accounts Receivable Between 30 and 90 Days Past Due:

   • Amount: $160,000
   • Estimated Uncollectible Percentage: 45%
   • Estimated Uncollectible: \[ 160,000 \times 0.45 = 72,000 \]

3. Accounts Receivable Less Than 30 Days Past Due:

   • Amount: $180,000
   • Estimated Uncollectible Percentage: 10%
   • Estimated Uncollectible: \[ 180,000 \times 0.10 = 18,000 \]

Now, we can sum the estimated uncollectible amounts from all categories:

\[ 119,000 + 72,000 + 18,000 = 209,000 \]

Thus, the estimated total uncollectible accounts for ABC Company is $209,000.