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Aging Accounts Receivable

Aging Accounts Receivable. Georgia CTAE Resource Network Instructional Resources Office Written by: Dr. Marilynn K. Skinner May 2009. To Receive Credit for this problem:.

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Aging Accounts Receivable

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  1. Aging Accounts Receivable Georgia CTAE Resource Network Instructional Resources Office Written by: Dr. Marilynn K. Skinner May 2009

  2. To Receive Credit for this problem: Create a spreadsheet in Excel that will calculate the amounts for you. You may work with a partner, but you must turn in a printed copy of the spreadsheet and tell me whose folder it is saved under.

  3. Why Age Accounts Receivable? • The longer it takes to collect an account the higher the chances that it will become uncollectible. • Companies can look back at past collections and predict a percentage of accounts that might not be paid.

  4. Example

  5. Percentages Not Yet Due 2% 1-30 Days Past Due 4% 31-60 Days Past Due 25% 61-90 days Past Due 35% Over 90 Days Past Due 55%

  6. Step 1 get total for each time period.

  7. Calculate Not Yet Due (2%) 562 X 2 % = 11.24

  8. Step 1 get total for each time period.

  9. Calculate Not Yet Due (2%) 562 X 2 % = 11.24 Past Due : 1-30 Days (4%) 3,500 X 4%= 140.00

  10. Step 1 get total for each time period.

  11. Calculate Not Yet Due (2%) 562 X 2 % = 11.24 Past Due : 1-30 Days (4%) 3,500 X 4%= 140.00 31-60 Days (25%) 1,902 X 25%= 475.50

  12. Step 1 get total for each time period.

  13. Calculate Not Yet Due (2%) 562 X 2 % = 11.24 Past Due : 1-30 Days (4%) 3,500 X 4%= 140.00 31-60 Days (25%) 1,902 X 25%= 475.50 61-90 Days (35%) 120 X 35%= 42.00

  14. Step 1 get total for each time period.

  15. Calculate Not Yet Due (2%) 562 X 2 % = 11.24 Past Due : 1-30 Days (4%) 3,500 X 4%= 140.00 31-60 Days (25%) 1,902 X 25%= 475.50 61-90 Days (35%) 120 X 35%= 42.00 90+ Days 1,071 X 55%= 589.05

  16. Calculate Not Yet Due (2%) 562 X 2 % = 11.24 Past Due : 1-30 Days (4%) 3,500 X 4%= 140.00 31-60 Days (25%) 1,902 X 25%= 475.50 61-90 Days (35%) 120 X 35%= 42.00 90+ Days 1,071 X 55%= 589.05 Total 1,131.79

  17. Allowance for Doubtful Accounts 354.00 ? 1131.79 Calculating Entry

  18. Allowance for Doubtful Accounts 354.00 ? 1131.79 1131.79 – 354.00 = 777.79 Calculating Entry

  19. Entry: Bad Debt Expense 777.79 Allowance for Doubtful Accounts 777.79

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