How To Calculate Uncollectible Accounts Receivable. After analyzing the ending balance of $250,000 in accounts receiveable, management estimated that $12,500 of these accounts would ultimately become uncollectible. The method used to estimate the desired balance in the allowance account is called the aging of accounts receivable.
Under this approach, businesses find the estimated value of bad debts by calculating bad debts as a percentage of the accounts receivable balance. Accounts receivable xxx uncollectible accounts expense is reported on the income statement. An aging of accounts receivable results in an estimate of $9,000 of uncollectible accounts receivable.
