Module V: Accounts Receivable Aging Analysis

Richard Derick has asked you to review the accounts receivable aging analysis and the allowance for doubtful accounts and to recommend any audit adjustments or reclassifications you consider necessary. Shelly Ross had prepared the aging analysis and the allowance for doubtful accounts document before being temporarily transferred to the Joplin Mills audit. She should be back early next week, but Derick would like to "wrap up" accounts receivable this week.

Based on the aging analysis prepared by Ross, you have decided to confirm all large accounts and a sampling of the smaller accounts, using positive confirmations.

1. Enter the amount of credit balances in customer accounts receivable.

$

(The hint it gives me is "There are three credit balance accounts in accounts receivable.")

I tried to make them a bit bigger, I cannot zoom in anymore or all the numbers will not be seen

1 PP 3 Brony's Bikes Accounts and Notes Receivable-Trade December 31, 2019 Prepared by: Date: Revieved by: Date: 12/31/2018 Audited Balance 12/31/2009 Per Ledger Audit Adjustaents 12/31/2019 Audited Reclassifications 9 Accounts Receivable-Trade 10 Notes Receivable-Trade $11,700,000 $1,500,000 $11,920,000 $80,000 $11, 920,000 $80,000 3.A 3.B $0 12 Total 13 Allovance for Doubtful Accounts $13, 200,000 ($800,000) $12,000,000 ($220,000) $12,000,000 ($220,000) 3.0 $12,400,000 $11,780,000 $0 $0 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = == = == = = = = = = = = = = = = = = = $11,780,000 = = = = = TB 1 = = == == = 19 20 VP 3.A Brony's Bikes Accounts Receivable Aging Analysis December 31, 2019 Prepared by: Date: Revieved by: Date: w NN PAST DUE (DAYS) 61-90 TOTAL CURRENT 1-30 31-60 91-120 OVER 120 $35, 668 $56,520 $35, 668 $123, 400 $234,500 $66,700 $773,200 C & $ 66,880 $234,500 $66,700 C U $773,200 C & $74,210 $65,590 CUSTOMER 27 28 Adans Supply 29 Arley Supply 30 Atlantic Bicycle Shops, Inc. 31 Beece Hardware Outlets 32 Big Hart Discount Centers 33 34 Big Tiger Discount Stores 35 Bikes and Parts 36 Brown's Bikes 37 Chicago Bike and Fitness Stores 38 Churchill Stores 39 Crandall Stores 40 Epyorth Sales 41 Florida Bike World 42 Florida Harts 43 Garrold Outfitters 44 Gibson Sales and Service 45 Ginny Lou Hidvest Sales 46 Great Lakes Fitness Centers $923, 440 $123, 400 $2,344 $23, 449 $65, 788 $22, 240 C & $33,211 $997,650 $188,990 $2,344 $45,689 $65,788 $33, 211 $12,366 $664,100 $198,760 $133, 456 $11, 234 $189,600 $ 144 600 C & $208,500 $12,366 $455,600 $198, 760 $23,467 $1,344 $189,600 $144 600 $35,689 $12,335 $61,965 C & $9,890 $144,600 $23, 440 $144,600 $23, 440 $3,256 $8,800 $23, 440 $22,344 $4,566 $1,320,000 $3,256 $8,800 $12,200 C & $11, 240 $22,344 $4,566 C 0 $1,320,000 C & $76,000 $76,000 $3,346 $338,700 $3,346 C U $338,700 & ($22,400) $5,677 $9,890 & wel $166,945 $112,450 $112,780 $166,700 $442,300 $322,300 $385,600 $120, 489 $ 88,243 46 Great Lakes Fitness Centers 47 Hovell Sports Shops 48 Jackson Bicycle Store 49 Jackson Jovia 50 Jaaby, Inc. 51 John Vance Boats and Bikes 52 Josh and Lanier 53 L Hart Departrent Stores 54 55 Lee Stores 56 Leerer Hardware 57 Liesure Tire 58 59 Lincoln Supply 60 Lippincott's 61 Long Island Bicycle Sales 62 Luther Stores 63 Harion Stores 64 Horison, Inc. 65 Nationvide Hardware Supply 66 New England Bike Tours and Sales 67 Northeast Discount Outlets 68 Northyest Supply 69 Oxford, Inc. 70 Pacific Bike Suppliers 71 Payne Sports Shop 72 Pedonar 73 Perlenan Enterprises 74 Rear and Saybuck 75 76 Reggie's Bikes 77 Sacrarento Sales 78 Saftner Sales and Service 79 Scramble Gogno Stores 80 Suith & Hines Bike Sales and Service 81 Southyest Spokes, Inc. 82 83 Taylor's Bicycle Shop 84 Texas Bike Eaporiui 85 Torkini, Inc. 86 Trooper Shoop Sales and Service 87 Truly Bikes 88 Turin, Inc. 89 Uncle John's Discount Hardware 90 Varner Discount Stores 91. Payne and Lauhert Inc ($22,400) C $5,677 $166,945 $122,340 $112,780 C $166,700 $442,300 C $467,323 C $388,900 C $222,589 C $67,854 $337, 780 C $2,238 $336,223 C $312,399 C S881,870 C & U & & weer $56,780 $3,300 $102,100 $67,854 & $337,780 $2,238 U $336, 223 $132,149 $166,800 $0 & 0 $13,450 $881,870 & $44,567 $249,240 $4,532 $44,567 $249, 240 C $4,532 $446,770 C ($113,320) C $443, 760 C $76,800 $22,340 $122,185 & & U $225, 445 ($113,320) $443,760 & & U ($54, 765) $266,800 $233, 400 ($54,765) C $266,800 C $233, 400 C $16, 788 $122,900 C $33,446 C $223, 400 C $56,700 $ 98 760 & & U $16,788 $122,900 $13,500 $12,300 $7,646 $223, 400 $23, 400 $98 760 $33,300 E $13,500 C C & 0 $12,300 F $7,646 $223, 400 88 Turin, Inc. 89 Uncle John's Discount Hardware 90 Varner Discount Stores 91 Vayne and Laubert, Inc. 92 Youk, Inc. 93 Zerleena Stores 94 $33,446 $223,400 $56,700 $ 98,760 $3,204 $87,180 $33,300 $23,400 $ 98,760 $3,204 $78,950 $8,230 95 $11,920,028 $9,456, 221 $831, 216 $1,299, 904 $219,837 $18.120 $94,730 == = = = $466,987 $89,900 $ 202,300 $5,677 $0 SO 96 97 SUBSEQUENT COLLECTIONS ( To January 28, 2010) 98 99 UNCOLLECTED (as of January 28, 2010) 100 101 Estirated percent uncollectible $11,155,164 $8,989,234 $741, 316 $1,097,604 $ 214,160 $18, 120 $94,730 1.00% 10.00% 20.00% 50.00% 75.00% 100.00% 102 $598,945 $89,892 $74,132 $219,521 $107,080 $13,590 $94,730 103 Estimated uncollectible-dollars 104 105 106 107 108 109 Audit Reclassification Entry A: 110 111 Accounts and Notes Receivable-Trade 112 Accounts Payable 113 To reclassify credit balances. 114 115 Explanation of Audit Legends: 116 117 C Kailed confiraation request: 118 All accounts >=$200,000 119 Randoi selection of renainder confirzed 120 & Confiration returned-no exception 121 U Unable to confir (see connents) 122 125 123 124 For nore inforzation concerning those accounts for which custoners vere unable to provide details, see 126 VP 6.4, sales and purchases cutoff tests in the file nared 127 2079 cutoff.xlsx 128 129 130 B 130 131 132 133 Prepared by: Date: Revieved by: Date: 137 134 135 VP 3.0 Brony's Bikes 136 Allowance for Uncollectible Accounts Deceber 31, 2019 138 139 140 141 142 1/1/09 Balance per ledger 143 1/1-12/31/19 Honthly provision 144 Account 1250 All. for D.A. Account 8325 B.D. Expense $800,000 $500,000 $500,000 145 $1,300,000 $500,000 146 1/1-12/31/09 Vrite-offs: 147 Pacific Coast Bike Shops 148 Phar Hor Stores, Inc. 149 Ontario Discount Stores, Inc. 150 Jack's Bike and Training Shops ($325,600) * ($134,600) * ($344,750) * ($275,050) * C C C C 151 152 12/31/19 Balance per ledger $220,000 $500,000 153 $220,000 $500,000 $500 = = = = = = = = = = = = = = = = = = = = = = = = = 154 AJE 2 155 156 12/31/19 Audited balance 157 158 159 Audit Adjustrent 2: 160 161 8325 Bad Debts Expense 162 1250 Allowance for Doubtful Accounts 163 To adjust allovance for doubtful accounts 164 to $600,000 as agreed. 165 166 Based on aging analysis and subsequent collections (WP 3.B) 167 and discussions vith Nr. Vhite, the credit nanager, 168 an allovance of $600.000 seeks reasonable and adequate. 169 170 171 Explanation of audit legends : 172 173 Examined correspondence and discussed vith credit nanager 174 C Confired 175 1 PP 3 Brony's Bikes Accounts and Notes Receivable-Trade December 31, 2019 Prepared by: Date: Revieved by: Date: 12/31/2018 Audited Balance 12/31/2009 Per Ledger Audit Adjustaents 12/31/2019 Audited Reclassifications 9 Accounts Receivable-Trade 10 Notes Receivable-Trade $11,700,000 $1,500,000 $11,920,000 $80,000 $11, 920,000 $80,000 3.A 3.B $0 12 Total 13 Allovance for Doubtful Accounts $13, 200,000 ($800,000) $12,000,000 ($220,000) $12,000,000 ($220,000) 3.0 $12,400,000 $11,780,000 $0 $0 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = == = == = = = = = = = = = = = = = = = $11,780,000 = = = = = TB 1 = = == == = 19 20 VP 3.A Brony's Bikes Accounts Receivable Aging Analysis December 31, 2019 Prepared by: Date: Revieved by: Date: w NN PAST DUE (DAYS) 61-90 TOTAL CURRENT 1-30 31-60 91-120 OVER 120 $35, 668 $56,520 $35, 668 $123, 400 $234,500 $66,700 $773,200 C & $ 66,880 $234,500 $66,700 C U $773,200 C & $74,210 $65,590 CUSTOMER 27 28 Adans Supply 29 Arley Supply 30 Atlantic Bicycle Shops, Inc. 31 Beece Hardware Outlets 32 Big Hart Discount Centers 33 34 Big Tiger Discount Stores 35 Bikes and Parts 36 Brown's Bikes 37 Chicago Bike and Fitness Stores 38 Churchill Stores 39 Crandall Stores 40 Epyorth Sales 41 Florida Bike World 42 Florida Harts 43 Garrold Outfitters 44 Gibson Sales and Service 45 Ginny Lou Hidvest Sales 46 Great Lakes Fitness Centers $923, 440 $123, 400 $2,344 $23, 449 $65, 788 $22, 240 C & $33,211 $997,650 $188,990 $2,344 $45,689 $65,788 $33, 211 $12,366 $664,100 $198,760 $133, 456 $11, 234 $189,600 $ 144 600 C & $208,500 $12,366 $455,600 $198, 760 $23,467 $1,344 $189,600 $144 600 $35,689 $12,335 $61,965 C & $9,890 $144,600 $23, 440 $144,600 $23, 440 $3,256 $8,800 $23, 440 $22,344 $4,566 $1,320,000 $3,256 $8,800 $12,200 C & $11, 240 $22,344 $4,566 C 0 $1,320,000 C & $76,000 $76,000 $3,346 $338,700 $3,346 C U $338,700 & ($22,400) $5,677 $9,890 & wel $166,945 $112,450 $112,780 $166,700 $442,300 $322,300 $385,600 $120, 489 $ 88,243 46 Great Lakes Fitness Centers 47 Hovell Sports Shops 48 Jackson Bicycle Store 49 Jackson Jovia 50 Jaaby, Inc. 51 John Vance Boats and Bikes 52 Josh and Lanier 53 L Hart Departrent Stores 54 55 Lee Stores 56 Leerer Hardware 57 Liesure Tire 58 59 Lincoln Supply 60 Lippincott's 61 Long Island Bicycle Sales 62 Luther Stores 63 Harion Stores 64 Horison, Inc. 65 Nationvide Hardware Supply 66 New England Bike Tours and Sales 67 Northeast Discount Outlets 68 Northyest Supply 69 Oxford, Inc. 70 Pacific Bike Suppliers 71 Payne Sports Shop 72 Pedonar 73 Perlenan Enterprises 74 Rear and Saybuck 75 76 Reggie's Bikes 77 Sacrarento Sales 78 Saftner Sales and Service 79 Scramble Gogno Stores 80 Suith & Hines Bike Sales and Service 81 Southyest Spokes, Inc. 82 83 Taylor's Bicycle Shop 84 Texas Bike Eaporiui 85 Torkini, Inc. 86 Trooper Shoop Sales and Service 87 Truly Bikes 88 Turin, Inc. 89 Uncle John's Discount Hardware 90 Varner Discount Stores 91. Payne and Lauhert Inc ($22,400) C $5,677 $166,945 $122,340 $112,780 C $166,700 $442,300 C $467,323 C $388,900 C $222,589 C $67,854 $337, 780 C $2,238 $336,223 C $312,399 C S881,870 C & U & & weer $56,780 $3,300 $102,100 $67,854 & $337,780 $2,238 U $336, 223 $132,149 $166,800 $0 & 0 $13,450 $881,870 & $44,567 $249,240 $4,532 $44,567 $249, 240 C $4,532 $446,770 C ($113,320) C $443, 760 C $76,800 $22,340 $122,185 & & U $225, 445 ($113,320) $443,760 & & U ($54, 765) $266,800 $233, 400 ($54,765) C $266,800 C $233, 400 C $16, 788 $122,900 C $33,446 C $223, 400 C $56,700 $ 98 760 & & U $16,788 $122,900 $13,500 $12,300 $7,646 $223, 400 $23, 400 $98 760 $33,300 E $13,500 C C & 0 $12,300 F $7,646 $223, 400 88 Turin, Inc. 89 Uncle John's Discount Hardware 90 Varner Discount Stores 91 Vayne and Laubert, Inc. 92 Youk, Inc. 93 Zerleena Stores 94 $33,446 $223,400 $56,700 $ 98,760 $3,204 $87,180 $33,300 $23,400 $ 98,760 $3,204 $78,950 $8,230 95 $11,920,028 $9,456, 221 $831, 216 $1,299, 904 $219,837 $18.120 $94,730 == = = = $466,987 $89,900 $ 202,300 $5,677 $0 SO 96 97 SUBSEQUENT COLLECTIONS ( To January 28, 2010) 98 99 UNCOLLECTED (as of January 28, 2010) 100 101 Estirated percent uncollectible $11,155,164 $8,989,234 $741, 316 $1,097,604 $ 214,160 $18, 120 $94,730 1.00% 10.00% 20.00% 50.00% 75.00% 100.00% 102 $598,945 $89,892 $74,132 $219,521 $107,080 $13,590 $94,730 103 Estimated uncollectible-dollars 104 105 106 107 108 109 Audit Reclassification Entry A: 110 111 Accounts and Notes Receivable-Trade 112 Accounts Payable 113 To reclassify credit balances. 114 115 Explanation of Audit Legends: 116 117 C Kailed confiraation request: 118 All accounts >=$200,000 119 Randoi selection of renainder confirzed 120 & Confiration returned-no exception 121 U Unable to confir (see connents) 122 125 123 124 For nore inforzation concerning those accounts for which custoners vere unable to provide details, see 126 VP 6.4, sales and purchases cutoff tests in the file nared 127 2079 cutoff.xlsx 128 129 130 B 130 131 132 133 Prepared by: Date: Revieved by: Date: 137 134 135 VP 3.0 Brony's Bikes 136 Allowance for Uncollectible Accounts Deceber 31, 2019 138 139 140 141 142 1/1/09 Balance per ledger 143 1/1-12/31/19 Honthly provision 144 Account 1250 All. for D.A. Account 8325 B.D. Expense $800,000 $500,000 $500,000 145 $1,300,000 $500,000 146 1/1-12/31/09 Vrite-offs: 147 Pacific Coast Bike Shops 148 Phar Hor Stores, Inc. 149 Ontario Discount Stores, Inc. 150 Jack's Bike and Training Shops ($325,600) * ($134,600) * ($344,750) * ($275,050) * C C C C 151 152 12/31/19 Balance per ledger $220,000 $500,000 153 $220,000 $500,000 $500 = = = = = = = = = = = = = = = = = = = = = = = = = 154 AJE 2 155 156 12/31/19 Audited balance 157 158 159 Audit Adjustrent 2: 160 161 8325 Bad Debts Expense 162 1250 Allowance for Doubtful Accounts 163 To adjust allovance for doubtful accounts 164 to $600,000 as agreed. 165 166 Based on aging analysis and subsequent collections (WP 3.B) 167 and discussions vith Nr. Vhite, the credit nanager, 168 an allovance of $600.000 seeks reasonable and adequate. 169 170 171 Explanation of audit legends : 172 173 Examined correspondence and discussed vith credit nanager 174 C Confired 175