Aging method to adjust allowance for uncollectible accounts

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Reference no: EM131256766

Maverick Company uses the aging method to adjust the allowance for uncollectible accounts at the end of the period. At December? 31, 2014 the balance of accounts receivable is $220,000, and the allowance for uncollectible accounts has a credit balance of $3,000. Based on past? experience, Maverick estimates that the percentage of accounts that will prove to be uncollectible within the three age groups is 2%, 8%, and 20%, respectively.

Accounts Recievable Aging Information

Current $170,000

60 days past due $41,000

Over 60 days past due $9,000

Total $220,000

Based on these? facts, the adjusting entry for uncollectible accounts should be made in the amount of:

A) $5,480

b) $12,480

c) $11,480

d) $8,480

Reference no: EM131256766

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