🎯 Practical Case: Receivables Management
Your Mission
Manage receivables for "CreditPro Inc." - estimate bad debts, write off uncollectible accounts, and calculate notes receivable interest!
Step 1: Estimate Bad Debts (Aging Method)
| Age Category | Balance | % Uncollectible | Estimated Bad Debts |
|---|---|---|---|
| Not yet due | $50,000 | 2% | |
| 1-30 days past due | $20,000 | 5% | |
| Over 30 days | $10,000 | 20% | |
| Total | $80,000 | $0 |
Step 2: Write-Off Decision
Customer "ABC Corp" owes $5,000 and has declared bankruptcy. Write off the account.
Which method should you use?
Step 3: Notes Receivable Interest
Received a 90-day, 12% note for $10,000 on October 1.
Calculate Interest
Principal: $10,000
Rate: 12% per year
Time: 90 days
Maturity Value
Principal + Interest = ?
🎉 Receivables Mastered!
You've learned to estimate, write off, and earn interest on receivables - critical skills for managing credit sales!