Question (2) 12 Marks: Near the end of the year 2021 You have been assigned a Financial Consultant Position for PETRA Company. Your first Task was to evaluate the Net Realizable cash value of PETRA Accounts Receivable. PETRA Company used to assign a 5% of its Credit Sales as Bad debt expense. Find Allowance for Doubtful Accounts & Bad Debt Expense using all applicable accounting methods, Combined with the Adjusting Entries for 2021. [8Marks] Final recommendation for the best method to apply with brief justification is expected via Official Report. [4Marks] Good LUCK with your New Position Description $ Accounts Receivable Balance31/12/2020 275000 Allowance for Doubtful Accounts Balance 31/12/2020(Credit) 4800 Credit Sales During 2021 345000 Collection During 2021 135000 Written off Accounts

10000

An aging of the accounts receivable for the Year2021 revealed the following: Description Amount Estimated Percentage of Uncollectible Total Current Accounts 200000 1% 2000 130 days past due 150,000 2% 3000 3160 days past due 80,000 3% 2400 6190 days past due 20,000 10% 2000 Over 90 days past due 35,000 40% 14000 Total 485000.00 23400 The Written off Accounts has been written off after Aging Table has been accomplished, & accounts were chosen among the ( Over 90 days Past due) class.

Accounts Receivable Aging Allowance for Doubtful Accounts Bad Debit exp. EB Accounts Receivable AR Allowance for Doubtful Accounts AR Net Book value 5% %Sales Allowance for Doubtful Accounts Bad Debit exp. EB Accounts Receivable AR Allowance for Doubtful Accounts AR Net Book value

Adjusting Entries Date Account Titles and Explanation Debit Credit