Problem 2 – Aging Schedule preparation

The total accounts receivable of Canque Company amounted to 6,000,000. Subsidiary ledger reveals the
following balances of customer’s accounts on December 31, of the current year:

L. Alforque 1,000,000
R. Albores 1,500,000
M. Requillo 1,800,000
C. Lim 1,200,000
D. Teh 500,000

Subsidiary ledgers of each customers are presented below for your analysis and aging:
L. Alforque January 25 160,000 160,000
March 11 60,000 100,000
March 21 80,00 180,000
April 12 120,000 300,000
June 1 70,000 370,000
July 20 50,000 420,000
September 15 150,000 270,000
October 15 100,000 370,000
November 15 200,000 170,000
November 20 300,000 470,000
December 15 270,000 200,000
December 20 800,000 1,000,000

R. Albores January 5 250,000 250,000

March 3 250,000 -
March 21 320,000 320,000
April 7 130,000 450,000
June 1 70,000 520,000
July 18 220,000 300,000
September 1 350,000 650,000
October 5 400,000 1,050,000
November 5 100,000 950,000
November 10 250,000 1,200,000
December 8 200,000 1,000,000
December 15 500,000 1,500,000

M. Requillo January 1 525,000 525,000

March 3 250,000 275,000
April 21 320,000 595,000
May 7 230,000 825,000
June 22 70,000 755,000
July 1 80,000 675,000
September 1 250,000 925,000
September 15 300,000 1,225,000
October 5 200,000 1,025,000
 November 5 450,000 1,475,000
November 20 400,000 1,075,000
December 15 725,000 1,800,000

C. Lim January 14 1,110,000 1,110,000

March 10 325,000 785,000
April 16 380,000 1,165,000
May 20 230,000 935,000
June 18 170,000 765,000
July 25 270,000 1,035,000
September 4 180,000 1,215,000
September 22 110,000 1,105,000
October 15 320,000 785,000
November 1 240,000 1,025,000
November 12 150,000 875,000
December 6 325,000 1,200,000

D. Teh January 14 195,000 195,000

March 10 125,000 70,000
April 16 800,000 870,000
May 20 230,000 640,000
June 18 170,000 470,000
July 25 170,000 640,000
September 4 280,000 920,000
September 22 100,000 820,000
October 15 220,000 600,000
November 1 260,000 860,000
November 12 155,000 705,000
December 10 205,000 500,000

All invoices have a credit term of 45 days.

The estimated bad debt rates below are based on the company’s receivable collection experience.
Past due accounts Rate
0-45 days 1%
46-90 days 1.50%
91-135 days 3%
136-180 days 10%
Over 180 days 50%

Required: Prepare an Aging schedule in good form.

Follow this format:

Customer Invoice Date Amount 0-45 46-90 91-135 136-180 Over 180 days

Total

*1% *1.5% *3% *10% *50%

Required Amount

Answer:
Customer Invoice Date Amount 0-45 46-90 91-135 136-180 Over 180 days

L. Alforque Dec. 20 800,000 800,000

Nov. 20 200,000 200,000

A. Albores Dec. 15 500,000 500,000

Nov. 10 250,000 250,000

Oct 5 400,000 400,000

Sept. 1 350,000 350,000

M. Requillo Dec. 15 725,000 725,000

Nov. 5 450,000 450,000

Sept 15 300,000 300,000

Sept. 1 250,000 250,000

May 7 75,000 75,000

C. Lim Dec. 6 325,000 325,000

Nov. 1 240,000 240,000

Sept. 4 180,000 180,000

July 25 270,000 270,000

April 16 185,000 185,000

D. The Dec.10 205,000 205,000

Nov. 1 260,000 260,000

Sept 4 35,000 35,000_________________________

Total 6,000,000 2,755,000 1,600,000 1,115,000 270,000 260,000

X .01 .015 .03 .10 .50_____

Req. Allow. 27,550 24,000 33,450 27,000 130,000

Total Req. Allow. = 242,000

If beginning allowance is 100,000, provision for bad debts will be 142,000;

Bad det expense 142,000

Allow for bad debts 142,000

If no beginning allowance for bad debts, provision for bad debts will be 242,000;

Bade debt expense 242,000

Allow. For bad debts 242,000

If the beginning allowance for bad debts is a debit balance of 10,000; provision for bad debts will be
252,000;

Bad debts expense 252,000

Allow. For bad debts 252,000