Tyson Corp. uses the aging method to estimate bad debts. The bookkeeper provided the following schedule as of March 30th, 2017:
$\begin{array}{|l|r|c|}
\hline{\text { Account Age }} & \text { Balance } & \text { Noncollection Probability } \
\hline \text { Current } & \$ 50,000 & 3 \% \
\hline 1--30 \text { days past due } & 40,000 & 4 \% \
\hline 31--60 \text { days past due } & 10,000 & 8 \% \
\hline \text { Over 60 days past due } & 5,000 & 15 \% \
\hline
\end{array}$
What is the amount of receivables deemed uncollectible?
A)$1,650
B)$4,650
C)$3,400
D)$105,000

Question

Tyson Corp. uses the aging method to estimate bad debts. The bookkeeper provided the following schedule as of March 30th, 2017:
$\begin{array}{|l|r|c|}
\hline{\text { Account Age }} & \text { Balance } & \text { Noncollection Probability } \
 \hline \text { Current } & \$ 50,000 & 3 \% \
\hline 1--30 \text { days past due } & 40,000 & 4 \% \
\hline 31--60 \text { days past due } & 10,000 & 8 \% \
\hline \text { Over 60 days past due } & 5,000 & 15 \% \
\hline
\end{array}$
What is the amount of receivables deemed uncollectible?
A)$1,650
B)$4,650
C)$3,400
D)$105,000

Quizplus · Accepted Answer

The uncollectible amount is calculated by multiplying each balance by its respective noncollection probability and summing the results: $ (50,000 \times 0.03) + (40,000 \times 0.04) + (10,000 \times 0.08) + (5,000 \times 0.15) = 1,500 + 1,600 + 800 + 750 = 4,650 $.

Tyson Corp What Is the Amount of Receivables Deemed Uncollectible? A)$1,650 B)$4,650

Tyson Corp What Is the Amount of Receivables Deemed Uncollectible?
A)$1,650
B)$4,650