SECTION III (Long Answer Questions, Each Question Carries 5 Marks) Q1.ABC Company has credit sales of SR 2,000,000 million for year 2016. On December 31, 2016, the ABC Company's Allowance for Doubtful Accounts has an unadjusted credit balance of SR 25,000 and a schedule of its December 31, 2016 accounts receivable by age is prepared. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here December 31, 2011 Accounts Receivable SR800,000 Age of Accounts Receivable Expected Percent Uncollectible% Not yet due 2% SR 290,000 1 to 30 days past due 2.3% SR 59,600 31 to 60 days past due 7.3% SR 19,600 61 to 90 days past due 35% SR 5,300 Over 90 days past due 75% Using aging of accounts receivable method; determine the amount that should be recorded for Bad Debt Expense on December 31, 2016. Answer: December 31, 2011 Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible Expected bad debt losses SR SR800,000 Not yet due 2% SR 290,000 1 to 30 days past due 2.3% SR 59,600 31 to 60 days past due 7.3% SR 19,600 61 to 90 days past due 35% SR 5,300 Over 90 days past due 75% Total Page 9 of 10