Mercy Hospital has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $70,000; Allowance for Uncollectible Accounts = $1,400 (credit). Mercy estimates uncollectible accounts based on an aging of accounts receivable as shown below. Age Group AmountReceivable Estimated PercentUncollectible Not yet due $50,000 15% 0 –30 days past due 11,000 20% 31– 90 days past due 8,000 45% More than 90 days past due 1,000 85% Total $70,000   Required:1. Estimate the amount of uncollectible receivables.2. Record the adjustment for uncollectible accounts on December 31, 2021.3. Calculate net accounts receivable.

Question

Mercy Hospital has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $70,000; Allowance for Uncollectible Accounts = $1,400 (credit). Mercy estimates uncollectible accounts based on an aging of accounts receivable as shown below.

Age Group Amount
Receivable
Estimated Percent
Uncollectible
Not yet due $50,000 15%
0 –30 days past due 11,000 20%
31– 90 days past due 8,000 45%
More than 90 days past due 1,000 85%
Total $70,000  

Required:
1. Estimate the amount of uncollectible receivables.
2. Record the adjustment for uncollectible accounts on December 31, 2021.
3. Calculate net accounts receivable.

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