Following categories and probabilities to age its receivable

Reference no: EM131117781

Brown Company uses the following categories and probabilities to age its receivables:

Age	Balance	Probability of Default
1-120 days	$70,000	2%
Over 120 days	30,000	6%

(a) Determine estimated bad debts.

(b) Prepare the necessary entry. Assume that the allowance account has a credit balance of $2,600.

Reference no: EM131117781

Questions Cloud

Describe its position relative to the graph : Describe its position relative to the graph of the indicated basic function and describe Its position relative to the graph of the indicated basic function

Alternative to a direct stock transaction : Provide a specific example of how you might advise a client to use an option transaction as an alternative to a direct stock transaction.

Which growth factors impacted ecosystem balance : What is ecosystem balance? Which reduction factors and which growth factors impacted ecosystem balance in Episode 1? Describe two ways in which the invasive species and native species impact ecosystem balance.

How you can ensure high standard of reliability and validity : Explain which method or instrument you would use to gather data. Describe the sample size appropriate for the population and how you would select participants.

Following categories and probabilities to age its receivable : Brown Company uses the following categories and probabilities to age its receivables:

Consider the effect of the rights issue : Consider the effect of the rights issue on a share holder under the three options available. Assume he has 3 shares sh.75 cash in hand.

Explain why the central bank''s intervention caused : Explain why the central bank's intervention caused such panic among currency futures traders with buy positions. Explain why the floor broker's willingness to sell 300 pound futures contracts at the going market rate aroused such concern. What might ..

The price of great american landscaping inc : The price of Great American Landscaping Inc. is now $85. The company pays no dividends. Toby Chysler expects the price four years from now to be $125 a share. Should Toby buy Great American Landscaping if he wants a 15 percent rate of return? Exp..

Create a world with a zombie and an open grave : Create a world with a zombie (Spooky) and an open grave (a black square on the ground).

User Account

All Pages