Blain Company has $20,000 of accounts receivable that are current, $10,000 that are between 0 and 30 days past due, $6,000 that are between 30 and 60 days past due, and $1,600 that are more than 60 days past due. Blain estimates that 2% of the receivables that are current will be uncollectible, 5% of those between 0 and 30 days past due will be uncollectible, 10% of those between 30 and 60 days past due will be uncollectible, and 50% of those more than 60 days past due will be uncollectible. Just prior to recognizing uncollectible accounts expense, Blain's allowance for doubtful accounts has a $200 positive balance. Assuming Blain uses the aging method to estimate uncollectible accounts expense, the amount of uncollectible expense will be

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Quizplus · Accepted Answer

The aging method estimates uncollectible accounts expense by multiplying the balance in each age category by the estimated percentage of uncollectibles in that category. For Blain Company, the uncollectible expense is:Current: $20,000 x 2% = $4000-30 days past due: $10,000 x 5% = $50030-60 days past due: $6,000 x 10% = $600Over 60 days past due: $1,600 x 50% = $800Total uncollectible expense: $400 + $500 + $600 + $800 = $2,300

Blain Company Has $20,000 of Accounts Receivable That Are Current