Bad Debt Provision at Apple

• Values:

• Accounts Receivable: $2,000,000
• Estimated Bad Debts: 5% of Accounts Receivable
• Actual Write-Offs: $50,000
• Requirements:

0. Apply the conservatism principle to estimate bad debt provision.
1. Calculate the bad debt expense using the matching concept.
2. Discuss how conservatism and matching affect Apple’s financial health.
3. Recommend strategies to improve receivables management.