Minimize write-offs

Anonymous
timer Asked: Apr 30th, 2016

Question description

Indicate three or four measures Nebraska can implement to minimize his write-offs and explain why investors would be concerned about write-offs.



Nebraska bookshop specializes in used, rare, and out-of-print books. The store has a large base of repeat customers who purchase books on 30-day accounts. At 15 days overdue, each customer gets a phone call from Nebraska requesting payment. Nebraska has experienced a high success rate with this collection effort. Nebraska’s CPA is preparing year-end financial statements, and the company has asked him for his estimate of uncollectible accounts. Nebraska has a balance of $65,000 in the accounts receivable account at the end of the year. The CPA has analyzed the company’s uncollectible accounts using an aging of the accounts receivable. He estimates that only 2.5% of his accounts receivable balance will not be collected. The allowance for doubtful accounts has a credit balance of $210 in the trial balance.

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