Question

The Mighty Power Tool Company has the following accounts on its​ books: Customer Amount Owed​ ($) Age​ (days) ABC ​$47 comma 150 32 DEF 37 comma 500 7 GHI 18 comma 900 14 KLM 72 comma 000 28 NOP 41 comma 450 43 QRS 16 comma 000 11 TUV 84 comma 300 58 WXY 39 comma 500 75 The firm extends credit on terms of 1 divided by 15 comma net 30. Develop an aging schedule using 15​-day increments through 60 ​days, and then indicate any accounts that have been outstanding for more than 60 days.

Answer 1

Answer:

Accounts receivable more than 60 days = $39,500

% of accounts receivable = 11.07%

Explanation:

The following table shows the aging schedule-

Customer    Amount Owed​ ($) Age​ (days)

ABC               ​$47,150                   32

DEF                 37,500                     7

GHI                  18,900                   14

KLM                72,000                   28

NOP                 41,450                   43

QRS                 16,000                    11

TUV                84,300                   58

WXY               39,500                   75

We have to develop a schedule with a 15 days incremental through 60 days. And we show which customers are falling in that category -

0-15   (DEF + GHI + QRS) = $(37,500 + 18,900 + 16,000) = $72,400

16-30 (KLM) = $72,000

31-45 (ABC + NOP) = $(47,150 + 41,450) = $88,600

46-60 (TUV) = $84,300

Over 60 (WXY) = $39,500

Accounts receivable more than 60 days = $39,500

Percentage of Accounts receivable = $\frac{39,500}{72,400+72,000+88,600+84,300+39,500}$

= 11.07%