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Godfreid Company has accounts receivable of [tex] \[tex]$95,400 [/tex] at March 31, 2022, and a [tex] \$[/tex]2,100 [/tex] credit balance in Allowance for Doubtful Accounts prior to adjustment. The company's estimates of bad debts are as shown below:

[tex]\[
\begin{array}{|c|c|c|c|}
\hline
\text{Age of Accounts} & \text{Balance, March 31} & & \text{Estimated Percentage Uncollectible} \\
\hline
& 2022 & 2021 & \\
\hline
\text{Current} & \$65,000 & \$75,000 & 2\% \\
\hline
\text{1-30 days past due} & \$12,900 & \$8,000 & 5\% \\
\hline
\text{31-90 days past due} & \$10,100 & \$2,400 & 30\% \\
\hline
\text{Over 90 days past due} & \$7,400 & \$1,100 & 50\% \\
\hline
& \$95,400 & \$86,500 & \\
\hline
\end{array}
\][/tex]

Determine the total estimated uncollectibles at March 31, 2022.

Total estimated uncollectibles: [tex] \$\square [/tex]



Answer :

GinnyAnswer
To determine the total estimated uncollectibles at March 31, 2022, we need to consider the different categories of receivables and their respective estimated percentages of uncollectibles. By applying the given percentages to the balances of each category, we can find out the estimated uncollectibles. Let's break this down step-by-step:

1. Current Receivables:
- Balance: \[tex]$65,000 - Uncollectible Percentage: 2% Calculation: \[ \text{Uncollectibles for Current Receivables} = \$[/tex]65,000 \times 2\% = \[tex]$1,300 \] 2. Receivables 1-30 Days Past Due: - Balance: \$[/tex]12,900
- Uncollectible Percentage: 5%

Calculation:
[tex]\[ \text{Uncollectibles for 1-30 Days Past Due} = \$12,900 \times 5\% = \$645 \][/tex]

3. Receivables 31-90 Days Past Due:
- Balance: \[tex]$10,100 - Uncollectible Percentage: 30% Calculation: \[ \text{Uncollectibles for 31-90 Days Past Due} = \$[/tex]10,100 \times 30\% = \[tex]$3,030 \] 4. Receivables Over 90 Days Past Due: - Balance: \$[/tex]7,400
- Uncollectible Percentage: 50%

Calculation:
[tex]\[ \text{Uncollectibles for Over 90 Days Past Due} = \$7,400 \times 50\% = \$3,700 \][/tex]

5. Total Estimated Uncollectibles:
Summing up all the estimated uncollectibles:
[tex]\[ \text{Total Estimated Uncollectibles} = \$1,300 + \$645 + \$3,030 + \$3,700 = \$8,675 \][/tex]

Therefore, the total estimated uncollectibles at March 31, 2022, is:
[tex]\[ \boxed{\$8,675} \][/tex]

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