Question

Fey Corporation has aged its accounts receivable and estimated uncollectible accounts as follows (in thousands). What bad debt expense should the company report for the current period? Age of Receivables AR Balance Estimated % uncollectible Allowance Current $5,500 × 1% $55 30-60 days past due 1,200 × 3% 36 61-90 days past due 850 × 6% 51 Over 90 days past due 420 × 10% 42

Answer 1

Answer:

bad debt expense for the year-ended 184,000 dollars

Explanation:

The company calcualtethe bad debt expense using an agains method of his receivables.

This assign a change of turn out uncollectible based on the business experience and other factors:

This values are in thousands of dollars:

current account receivable (less than 30 days) 5,500 x 1% = 55

from 30 to 60 days past due: 1,200 x 3% = 36

from 61 to 90 days past due:     850 x 6% = 51

over 90 days past due:             420 x 10% = 42

Total        55 + 36 + 51 + 42 = 184

bad debt expense: 184,000