Renegade Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2008, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
|
|
|
Percent |
|
Age Interval |
Balance |
Uncollectible |
|
Not past due |
$400,000 |
1% |
|
1–30 days past due |
80,000 |
2 |
|
31–60 days past due |
18,000 |
5 |
|
61–90 days past due |
12,500 |
10 |
|
91–180 days past due |
6,000 |
70 |
|
Over 180 days past due |
2,500 |
90 |
|
|
$519,000 |
|
Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2008.