Goods for Less uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more favorably, Goods for Less considers changing the past-due categories as follows. A. Complete each table by filling in the blanks. B. Determine the difference between totals uncollectible. C. Describe the categories change effect on net income and accounts receivable.

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 9, Problem 10PB
Textbook Problem
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Goods for Less uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019.To manage earnings more favorably, Goods for Less considers changing the past-due categories as follows.A. Complete each table by filling in the blanks.B. Determine the difference between totals uncollectible.C. Describe the categories change effect on net income and accounts receivable.

To determine

(a)

Introduction:

Accounts receivables refers to the amount of money which is yet to be paid by the debtors of the firm.It arises from credit sales made by companies. An account of “accounts receivables” is prepared to show these amounts.

To complete:

Each part of the table by filling the blanks.

Explanation of Solution

Fill the missing figures:

 0-30 DaysPast Due 31-90 DaysPast Due Over 91 DaysPast Due Account receivable amount(A) $1,000,000$422,000 $210,800 Percent uncollectible(B) 9% 31% 52% Total per category (A×B)$90,000 $130,820$109,616 Total uncollectible ($90,000+$130,820+$109,616)$330,436
To determine

(b)

The difference between the total uncollectible amount.

To determine

(c)

To describe:

The category change effect on net income and accounts receivable.

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