Question 1: Account receivables The accountant for James Scriven Ltd has prepared the following aged debtor analysis. As credit manager, you have to decide what bad debts to write off and then calculate the new provision for doubtful debts Aged debtor analysis at 31 December 2012 Age of debt 1-2 month Total Less than 1 3-4 2-3 over 4 months debtor month month debt month 189.2 Peter 1800.4 210.3 4199.9 2000 750.43 Zandra 750.43 199 2250.7 1450.26 DS Cox 3899.96 240 340.67 580.67 Softseat 9.62 292.12 200.4 900 1220 2622.14 P Bond 439.4 780 340.6 TF Day 48 121.23 169.23 B G Moon 1199.05 821.99 410.7 5758.5 4812.09 13002.33 Total The company's credit policy is: To write off as bad debts all debts over 4 months old Make a specific provision for debts over 200 and between 3 and 4 months old Make a general provision of 3 % of the remaining debtors. You have also been provided with the following additional information: i. ii In 2011, a debt owed by Quality Furnishings Ltd was written of as a bad debt. On 31 March 2012, 101.34 (including VAT at standard rate) was received in final settlement of the debt. The provision for bad debts at 1 January 2012 was 340. 1) calculate the new provision for doubtful debts. (3 marks) 2) Using both the relevant aged debtor analysis and this additional information, prepare the following accounts: Bad debts Provision for doubtful debts Bad debts recovered Quality Furnishings Ltd for 2012 only. (7 marks) If gross profit was 192,000 and expenses 78,000 before the above adjustments, showing 3) your workings calculate the revised net profit