Question

Mobile Technology Ltd. reported an unadjusted balance of accounts receivable of $1,305,000 at 31 December 20X3, along with a credit balance in the allowance for doubtful accounts of $83,500 and an allowance for sales discounts of $6,400. At year-end, the company determined that an allowance of $13,500 for sales discounts was needed. It also decided that $54,200 of accounts receivable were uncollectible and should be written off. Of the remaining receivables, it was determined that 45% were current, and of the remaining net current balance, an allowance for doubtful accounts of 3% of the net balance was needed. The remaining 55% of outstanding accounts receivable were past due and an allowance for doubtful accounts of 10% of the outstanding balance was needed.  

Required:
For each case above, show how net accounts receivable would be reported on the statement of financial position, and calculate bad debt expense for the year. (Round your answers to the nearest whole dollar.)

A/R -

less allowance for doubtful accounts -

less allownace for sale discounts    -

Net Accounts Recieveable -

Bad debt expense -

Answer 1

Actual Information		Information given
Unadjusted Balance	13,05,000
Less:- Allowance for Doubtful debts	83,500	Out of this 54200 are treated as bad debts
Less:- Sales discount	6,400	Additional Allowance for 13500 needed
Closing Balance	12,15,100
Answer after above Adjustments
Unadjusted Balance	13,05,000
Less:- Allowance for Doubtful debts	29,300
Less:- Bad Debts	54,200
Less:- Sales discount	19,900
Closing Balance	12,01,600
45% Current	5,40,720	Out of this 3% provision for DD	16,221.60
55% Non current	6,60,880	Out of this 10% provision for DD	66,088.00
		Additional Provision for DD	82,309.60
Final Answer
Unadjusted Balance	13,05,000
Less:- Allowance for Doubtful debts	1,11,610
Less:- Bad Debts Expenses	54,200
Less:- Sales discount	19,900
Final Closing Balance	11,19,290