A company expects 5% of its newer accounts receivable to be uncollectible and 20% of its older accounts to be uncollectible.If the company has $40,000 of newer accounts and $5,000 of older accounts,the total estimate of uncollectible accounts is $2,000.

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The total estimate of uncollectible accounts is $3,000, calculated as 5% of $40,000 ($2,000) plus 20% of $5,000 ($1,000).

A Company Expects 5% of Its Newer Accounts Receivable to Be