账目审计 Auditing Report TASK: doutful debts analysis
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关键词：账目审计 Auditing Report TASKdoutful debts analysis

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Auditing Report TASK:  doutful debts analysis
       

An aging of the company’s debtors on 31 December 2009 and a historical analysis of the percentage of provision for doubtful debts in each age category are as follows:留学生论文http://www.51lunwen.org/

(a) Calculate the amount of provision for doubtful debts as at 31 December 2009.   
Assume that the provision for doubtful debt account had a balance of $9,000 as at  1st January 2009.

(b) Journalise the adjusting entry for provision for doubtful debts as at 31 December 2009.  Show how the figures will appear in the financial statements.  
 
 
 
 

(c) Explain with illustration which other method can be used to estimate provision for doubtful debts.               
Specific provision
 Look into each debt, and estimate which one may be a bad debt.
The meaning of Specific Provision for doubtful debts is:
- not considered sufficiently bad as yet to written off
- debtor’s balance exist high degree of uncertainty for not able to recover
This provision is created based on reviewing the INDIVIDUAL trade debtor who are owing to the firm.

Illustration:
Say, there are 200 debtors owning, management at certain interval will review individually trade debtors and know that only 20 accounts needs to be selected for doubtful debt. The rest can be surely collected.

Say, at Year End Trade Debtors Balance is ＄9,000,000 based on reviewing the individual trade debtor who is owing to the firm, Management believe ＄50,000 should be written off.
Debit:  Provision for Doubtful Debt (income Statement)   ＄50,000
Credit: Provision for Doubtful Debt (Balance Sheet)      ＄50,000
Being ＄50,000 Specific provision created based on reviewing the individual trade debtor who is owing to the firm