"Question 2 Sunshine Limited sells sun visors and hats to wholesalers and distributors. It has been expanding over the last few years and increased the amount of credit sales to its customers.

The following is an aged receivable listing:

0 to 30 1.5% 125000

31 to 60 4.5%. 100000

61 to 90. 7.0%. 85000

91 to 120. 15.0% 75000

Over 120 %. 25.0%. 55000

Estimate of Uncollectable 1.5% 4.5% 7.0% 15.0% 25.0% and

Amount Outstanding at Dec 31, 2023 $125,000 100,000 85,000 75,000 55,000

Instructions

a) Assuming that there is no existing balance in the allowance for expected credit losses account, what is the net realizable value of accounts receivable to be reported on the Statement of Financial Position.

b) The manager from the sales department is reviewing the financial statements and is concerned that the value for the accounts receivable does not reflect the full value outstanding. How would you respond?