# Outpost Designs 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, Outpost Designs decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

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Section
FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 9, Problem 11EB
Textbook Problem
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## Outpost Designs 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, Outpost Designs decided to change past-due categories as follows.Complete the following.A. Complete each table by filling in the blanks.B. Determine the difference between total uncollectible.C. Explain how the new total uncollectible amount affects net income and accounts receivable.

To determine

(a)

Introduction:

Accounts receivable 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) $35,000$40,000 $25,000 Percent uncollectible(B) 10% 22% 35% Total per category (A×B)$3,500 $8,800$8,750 Total uncollectible ($3,500+$8,800+$8,750)$21,050
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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