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

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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 Co 1 (40.11 KiB) Viewed 10 times

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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 4800 Allowance for Doubtful Accounts Balance 31/12/2020(Credit) 345000 Credit Sales During 2021 135000 Collection During 2021 and Focus ENC
An aging of the accounts receivable for the Year2021 revealed the following: Description Amount Estimated Percentage of Uncollectible Total 200000 1% Current Accounts 1-30 days past due 150,000 2% 31-60 days past due 80,000 3% 61-90 days past due 20,000 10% Over 90 days past due 35,000 40% Total 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. Page 5 of 8
Accounts Receivable Aging Allowance for Doubtful Accounts Bad Debit exp. EB Accounts Receivable AR Allowance for Doubtful Accounts AR Net Book value
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