SKP Co. Ltd has accounts receivable of $102,870 at April 30. Credit terms are 2/10, n/30. At April 30, Allowance for Doubtful Accounts has a credit balance of $510 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The Company’s estimate of bad debts is shown below. Age of Accounts Balance, April 30 Estimated Percentage Uncollectible 1-30 days $65,790 3.00% 31-60 days 28,640 6.00% 61-90 days 6,200 18.00% Over 90 days 2,240 45.00% Total $102,870 Required: e. Determine the total estimated uncollectible at April 30. (1.5 mark) f. Calculate the adjusted bad debt expense for the period. (1.5 marks) g. Prepare the journal entries to account for bad debt expense for the period. (3 marks) h. Work out the cash/net realisable value of Account receivable as at April 30.

To determine the total estimated uncollectible, Total estimated uncollectible [tex]= ($65,790 * 3.00%) + ($28,640 * 6.00%) + ($6,200 * 18.00%) +[/tex] [tex]($2,240 * 45.00%) = $1,973.70 + $1,718.40 + $1,116.00 + $1,008.00 = $5,457[/tex]b) The adjusted bad debt expense for the period is $4,947. The adjusted bad debt expense is calculated by subtracting the credit balance in the Allowance for Doubtful Accounts ($510) from the total estimated uncollectible[tex]($5,457). = $5,457 - $510 = $4,947[/tex]The journal entries to account for bad debt expense for the period are as follows: To record bad debt expense: Bad Debt Expense $4,947 Allowance for Doubtful Accounts $4,947 The cash/net realizable value of Accounts Receivable as of April 30 is $97,413.

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