Perry Materials Supply Uses the Aging Method to Account for Uncollectible

Essay

Perry Materials Supply uses the aging method to account for uncollectible accounts. At the end of the year, the balance in Accounts receivable was $146,000 and Perry prepared the following aging schedule.
$$\begin{array} { | l | r | r | r | r | r | } \hline { \text { Customer } } & 1 - 30 \text { days } & 31 - 60 \text { days } & 61 - 90 \text { days } & \begin{array} { c } \text { Over 90 } \\\text { days }\end{array} & \begin{array} { r } \text { Total } \\\text { Balance }\end{array} \\\hline \text { Tohnson } & \$ 4,600 & \$ 3,200 & & & \$ 7,800 \\\hline \text { Hot Pots, Inc. } & & & \$ 800 & \$ 1,000 & 1,800 \\\hline \text { Potter } & 40,000 & 550 & & & 40,550 \\\hline \text { Harrison } & & 3,600 & 900 & & 4,500 \\\hline \text { Marx } & & & 2,000 & 50 & 2,050 \\\hline \text { Younger } & 65,000 & & & & 65,000 \\\hline \text { Merry Maids } & 5,900 & & & & 5,900 \\\hline \text { Archer } & 12,000 & 6,400 & & & 18,400 \\\hline \text { Total } & \$ 127,500 & \$ 13,750 & \$ 3,700 & \$ 1,050 & \$ 146,000 \\\hline \text { Uncollectible percentage } & & & & & \\\hline \text { Estimated uncollectible } & & & & & \\\text { amount } & & & & & \\\hline\end{array}$$ Based on past history, Perry uses 2% for current receivables (1-30 days), 10% for 31-60 days, 20% for 61-90 days, and 40% for over 90 days. Please complete the schedule and calculate the estimated amount of uncollectible accounts.