Question (2) 12 Marks: Near the end of the year 2021 You have been assigned a Financial Consultant Position for PETRA C

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Question (2) 12 Marks:
Near the end of the year 2021 You have been assigned a Financial
Consultant Position for PETRA Company. Your first Task was to
evaluate the Net Realizable cash value of PETRA Accounts
Receivable. PETRA Company used to assign a 5% of its Credit Sales
as Bad debt expense.
Find Allowance for Doubtful Accounts & Bad Debt Expense using
all applicable accounting methods, Combined with the Adjusting
Entries for 2021. [8Marks]
Final recommendation for the best method to apply with brief
justification is expected via Official Report. [4Marks]
Good LUCK with your New Position 
Description $
Accounts Receivable Balance31/12/2020
275000

Allowance for Doubtful Accounts Balance
31/12/2020(Credit) 4800

Credit Sales During 2021 345000

Collection During 2021 135000

Written off Accounts
10000
An aging of the accounts receivable for the Year2021
revealed the following:
Description Amount Estimated
Percentage of Uncollectible Total
Current Accounts 200000
1% 2000
1–30 days past due 150,000
2% 3000
31–60 days past due 80,000
3% 2400
61–90 days past due 20,000
10% 2000
Over 90 days past due 35,000
40% 14000
Total 485000.00
23400
The Written off Accounts has been written off after Aging Table has
been accomplished, & accounts were chosen among the ( Over 90
days Past due) class.
Accounts Receivable Aging

Allowance for Doubtful Accounts

Bad Debit
exp.

EB




Accounts Receivable





AR
Allowance for Doubtful Accounts
AR Net Book value

5% %Sales

Allowance for Doubtful Accounts

Bad Debit
exp.

EB




Accounts Receivable





AR
Allowance for Doubtful Accounts
AR Net Book value
Adjusting Entries
Date Account Titles and Explanation
Debit Credit