Blain Company has $10,000 of accounts receivable that are current, $5,000 that are between 0 and 30 days past due, $3,000 that are between 30 and 60 days past due, and $800 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 account has a $100 positive balance. Assuming Blain uses the aging method to estimate uncollectible accounts expense, the amount of uncollectible expense will be

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Answer:

The amount of uncollectible expense will be $1,050

Explanation:

The computation is shown below:

= (Account receivable × uncollectible percentage + Account receivable × uncollectible percentage + Account receivable × uncollectible percentage + Account receivable × uncollectible percentage) -  allowance for doubtful accounts

= ($10,000 × 2% + $5,000 × 5% + $3,000 × 10% + $800 × 50%) - $100

= $200 + $250 + $300 + $400 - $100

= $1,150 - $100

= $1,050