The control of accounts receivable at Matris, AB has always been poor and incorrect bookings often occur from invoices and payments. In addition, it happens that customers are invoiced incorrect amounts and because the computers are often not delivered on time, many customers wait to pay until they have been corrected. The requirements routine has never worked satisfactorily, but in October this year a new controller, Robin, was hired and the routines have since been improved. Despite this, the age analysis below, of unpaid receivables, does not look promising. Amount (SEK) Number Up to 28 days 4,511,786 46 29 - 56 days 2 519 542 26 57 - 84 days 1 141 815 12 85 - 112 days 613 695 6 113 - 140 days 115 200 1 141 - 168 days 98 163 1 169 - 365 days 263 072 3 Over 365 days 926 842 10 190 115 104 Unmatched cash receipts -332.451 9 857 664 14) 100 Feared losses -250,000 9 607 664 Matris AB provides 28 days of credit from the invoice date, which means that there should not be very many unpaid receivables in excess of 56 days. The new controller, Robin, has concentrated on collecting larger older receivables and has to a fairly large extent succeeded in reducing receivables in the interval 85 - 168 days. However, a small number remain within this range that are not yet clear. Robin has also collected a number of receivables in the range 169 to 365, but here the difficulties have been greater because the accounting documents are deficient and it has been difficult to document some amounts. Despite this, Robin is fairly confident of being able to collect all claims for 365 days, with the exception of a bankruptcy, Stuul AB, where the claim amounts to SEK117,374. The claim, is distributed as follows: 28-56 days 81 034 169 - 365 days 36 340 _{the amount has been disputed by the customer upon 117 374 delivery because the facility did not correspond to the order) Strul AB went bankrupt on January 10, x when their premises were completely destroyed in an explosion. They were not insured and the debts exceed the receivables. Kim has not made any provision for the claim on Strul AB. According to Robin, it is very difficult to get payment for some receivables in excess of 365 days because the accounting for this period is sloppy and due to the credit check being lax. Ex. Several facilities have been sold to customers who have not been able to pay at all. The payments, which can not be booked off against receivables (amount 332,451), are assumed to be attributable to accounts receivable that exceed 365 days, which means that receivables to a value of 594,391 are highly doubtful that the company will receive. Kim has booked a general feared customer loss to the value of 250,000 for the receivables that exceed 365 days. INCOME STATEMENT x7 Supplement debet Addition credit Balance 27 718 998 270 000 210 000 -19 539 299 -200 000 210 000 -250 000 3011 For standard production 3840 Activated work (material) 3870 Activated work (staff) 4010 Purchase stand products 4090 Stock change 6351 Established customer losses 6352 Feared customer losses 6361 Change in guarantee provision 6420 Audit fees 4xxx-xxx Other external costs 7210 Personnel costs 7811 Depreciated capitalized expenses 7821 Depreciation building 7831 Avskr. maintenance equipment 7833 Depreciation installations 79xx Other operating expenses 54 000 24 000 -25 000 -2 420 647 -3 791 873 -24 000 -9 305 -375 970 -332 032 -158 663 27 718 998 270 000 0 -19 539 299 -200 000 0 -250 000 0 -25 000 -2 420 647 -3 791 873 -54 000 -9 305 0 -332 032 -233 857 0 78 941 -60 113 0 0 0 -275 000 876 813 375 970 112 791 37 597 78 941 -60 113 8300 Interest income 8400 Interest expenses 8271 Impairment of shares 8810 Provision for accrual fund 8850 Difference booked / plan no. depreciated. 8910 Tax expense for the year Reported results -275 000 816 037 BALANCE SHEET x7-12-31 Supplement debet Addition credit Balance 210 000 54 000 24 000 112 791 413 567 Assets 1100 Research and Development 1109 Ack. Dep. R&D 1110 Building on free ground 1119 ack. written off. Building. 1220 Equipment for maintenance & Rep. 1229 Ack. Dep. Equipment & Rep. 1240 Machinery and vehicles 1249 Ack. avskr. Machines 1350 Financial fixed assets. 1410 Warehouse Computers 1420 Spare parts warehouse 1510 Accounts receivable 1515 Doubtful accounts receivable Impairment of trade receivables 1640 Tax claim 1680 Other current receivables 1700 Interim receivables 1800 Shares 480 000 -24 000 465 248 -130 270 1 127 910 -751 940 1 660 160 -996 096 108 000 949 973 1 567 743 9 857 664 270 000 -54 000 465 248 -130 270 1 015 119 -338 373 1 660 160 -996 096 108 000 949 973 1 567 743 9 857 664 0 -250 000 0 0 0 270 000 0 114 14 395 282 -250 000 270 000 114 14 334 506 100 000 770 650 816 037 100 000 770 650 876 813 0 1940 Cash and Bank Amount Assets Equity and liabilities 2081 Share capital 2091 Balanced result 2099 Reported result 2110 Accrual Fund 2151 Ack. depreciated. in addition to plan 2220 provision for guarantees 2330 Overdraft facility 2440 Accounts payable 2510 Tax liability 2680 Liabilities to Parent Company 2990 Other interim liabilities Amount Equity and liabilities 0 1 680 175 1 804 510 1 680 175 1 804 510 0 9 163 134 0 14 395 282 9 163 134 14 334 506 814 358 814 358 Total Assets - Total Liabilities 0 The control of accounts receivable at Matris, AB has always been poor and incorrect bookings often occur from invoices and payments. In addition, it happens that customers are invoiced incorrect amounts and because the computers are often not delivered on time, many customers wait to pay until they have been corrected. The requirements routine has never worked satisfactorily, but in October this year a new controller, Robin, was hired and the routines have since been improved. Despite this, the age analysis below, of unpaid receivables, does not look promising. Amount (SEK) Number Up to 28 days 4,511,786 46 29 - 56 days 2 519 542 26 57 - 84 days 1 141 815 12 85 - 112 days 613 695 6 113 - 140 days 115 200 1 141 - 168 days 98 163 1 169 - 365 days 263 072 3 Over 365 days 926 842 10 190 115 104 Unmatched cash receipts -332.451 9 857 664 14) 100 Feared losses -250,000 9 607 664 Matris AB provides 28 days of credit from the invoice date, which means that there should not be very many unpaid receivables in excess of 56 days. The new controller, Robin, has concentrated on collecting larger older receivables and has to a fairly large extent succeeded in reducing receivables in the interval 85 - 168 days. However, a small number remain within this range that are not yet clear. Robin has also collected a number of receivables in the range 169 to 365, but here the difficulties have been greater because the accounting documents are deficient and it has been difficult to document some amounts. Despite this, Robin is fairly confident of being able to collect all claims for 365 days, with the exception of a bankruptcy, Stuul AB, where the claim amounts to SEK117,374. The claim, is distributed as follows: 28-56 days 81 034 169 - 365 days 36 340 _{the amount has been disputed by the customer upon 117 374 delivery because the facility did not correspond to the order) Strul AB went bankrupt on January 10, x when their premises were completely destroyed in an explosion. They were not insured and the debts exceed the receivables. Kim has not made any provision for the claim on Strul AB. According to Robin, it is very difficult to get payment for some receivables in excess of 365 days because the accounting for this period is sloppy and due to the credit check being lax. Ex. Several facilities have been sold to customers who have not been able to pay at all. The payments, which can not be booked off against receivables (amount 332,451), are assumed to be attributable to accounts receivable that exceed 365 days, which means that receivables to a value of 594,391 are highly doubtful that the company will receive. Kim has booked a general feared customer loss to the value of 250,000 for the receivables that exceed 365 days. INCOME STATEMENT x7 Supplement debet Addition credit Balance 27 718 998 270 000 210 000 -19 539 299 -200 000 210 000 -250 000 3011 For standard production 3840 Activated work (material) 3870 Activated work (staff) 4010 Purchase stand products 4090 Stock change 6351 Established customer losses 6352 Feared customer losses 6361 Change in guarantee provision 6420 Audit fees 4xxx-xxx Other external costs 7210 Personnel costs 7811 Depreciated capitalized expenses 7821 Depreciation building 7831 Avskr. maintenance equipment 7833 Depreciation installations 79xx Other operating expenses 54 000 24 000 -25 000 -2 420 647 -3 791 873 -24 000 -9 305 -375 970 -332 032 -158 663 27 718 998 270 000 0 -19 539 299 -200 000 0 -250 000 0 -25 000 -2 420 647 -3 791 873 -54 000 -9 305 0 -332 032 -233 857 0 78 941 -60 113 0 0 0 -275 000 876 813 375 970 112 791 37 597 78 941 -60 113 8300 Interest income 8400 Interest expenses 8271 Impairment of shares 8810 Provision for accrual fund 8850 Difference booked / plan no. depreciated. 8910 Tax expense for the year Reported results -275 000 816 037 BALANCE SHEET x7-12-31 Supplement debet Addition credit Balance 210 000 54 000 24 000 112 791 413 567 Assets 1100 Research and Development 1109 Ack. Dep. R&D 1110 Building on free ground 1119 ack. written off. Building. 1220 Equipment for maintenance & Rep. 1229 Ack. Dep. Equipment & Rep. 1240 Machinery and vehicles 1249 Ack. avskr. Machines 1350 Financial fixed assets. 1410 Warehouse Computers 1420 Spare parts warehouse 1510 Accounts receivable 1515 Doubtful accounts receivable Impairment of trade receivables 1640 Tax claim 1680 Other current receivables 1700 Interim receivables 1800 Shares 480 000 -24 000 465 248 -130 270 1 127 910 -751 940 1 660 160 -996 096 108 000 949 973 1 567 743 9 857 664 270 000 -54 000 465 248 -130 270 1 015 119 -338 373 1 660 160 -996 096 108 000 949 973 1 567 743 9 857 664 0 -250 000 0 0 0 270 000 0 114 14 395 282 -250 000 270 000 114 14 334 506 100 000 770 650 816 037 100 000 770 650 876 813 0 1940 Cash and Bank Amount Assets Equity and liabilities 2081 Share capital 2091 Balanced result 2099 Reported result 2110 Accrual Fund 2151 Ack. depreciated. in addition to plan 2220 provision for guarantees 2330 Overdraft facility 2440 Accounts payable 2510 Tax liability 2680 Liabilities to Parent Company 2990 Other interim liabilities Amount Equity and liabilities 0 1 680 175 1 804 510 1 680 175 1 804 510 0 9 163 134 0 14 395 282 9 163 134 14 334 506 814 358 814 358 Total Assets - Total Liabilities 0