Question

The unadjusted net accounts receivable on the books of Elantra Ltd. as of 31 December 20X4 are as follows:

Accounts receivable	$ 250,000
Less: Allowance for doubtful accounts	40,000
	$ 210,000
40% of the accounts are current and 5% might not be collected, and the remainder is past due and 30% might not be collected. Required: Calculate the bad debt expense, the balance in the allowance for doubtful accounts, and the net accounts receivable on the SFP at the end of 20X4.

Answer 1

Working
A/cs Receivable	2,50,000
40% is current	1,00,000	5% might not be collected of this ie. BAD DEBTS	5,000
60% is non current	1,50,000	30% might not be collected ie. Provision for Doubtful Debts	45,000
ANSWER
A/cs Receivable as on start	2,50,000
Less:- Bad Debt Expenses	5,000
Less:- Provision for Doubtful debts	45,000
Net A/cs Receivable	2,00,000