Kapple Inc. uses the balance sheet approach to estimate uncollectible accounts expense. At year-end 2021 an aging of the accounts receivable produced the following five groupings. On the basis of past experience, the company estimated the percentages probably uncollectible for the above 5 age groups to be as follows: Group a: 1,5 %, Group b: 4 %, Group c: 12 %, Group d: 18 % and Group e: 50 %. The Allowance for Doubtful Accounts before adjustments at 31. December 2020 showed a credit balance of $ 191.000.

a) Compute the estimated amout of uncollectible accounts based on the above classification by age groups. (10 points)

b) Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount as of 31. December 2020. (2 points)

c) Assume that on 5. January 2021, Kapple Inc learned that an account receivable that had originated on 1. September 2020 in the amount of $ 20.500 was worthless because of the bankruptcy of the client Chaos Inc.. Prepare the journal entry required on 5. January 2021 to write off this account. What is the impact on the Income statement and the Net Realizable Value of the Accounts Receivable please calculate Net Realizable Value before and after the journal entry, assuming that there were no other changes of the balances since 31. December 2020 ? (10 points)

d) Please explain why the development of the Accounts Receivables -compared to other asset classes- might be more carefully observed by the management and provide at least 2 brief examples for Internal Control measures over Accounts Receivables. (6 points)