The document is an audit working paper analyzing the allowance for bad debts account of Apple Blossom Cologne Company. It summarizes the activity in the account for 2002 including the beginning balance, write-offs during the year, and provision expense. It also performs a reasonableness test to compare the calculated expected uncollectible amount to the adjusted balance per the client's books, noting a small difference that is immaterial.
The document is an audit working paper analyzing the allowance for bad debts account of Apple Blossom Cologne Company. It summarizes the activity in the account for 2002 including the beginning balance, write-offs during the year, and provision expense. It also performs a reasonableness test to compare the calculated expected uncollectible amount to the adjusted balance per the client's books, noting a small difference that is immaterial.
The document is an audit working paper analyzing the allowance for bad debts account of Apple Blossom Cologne Company. It summarizes the activity in the account for 2002 including the beginning balance, write-offs during the year, and provision expense. It also performs a reasonableness test to compare the calculated expected uncollectible amount to the adjusted balance per the client's books, noting a small difference that is immaterial.
The document is an audit working paper analyzing the allowance for bad debts account of Apple Blossom Cologne Company. It summarizes the activity in the account for 2002 including the beginning balance, write-offs during the year, and provision expense. It also performs a reasonableness test to compare the calculated expected uncollectible amount to the adjusted balance per the client's books, noting a small difference that is immaterial.
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Apple Blossom Cologne Company B-5
Allowance for Bad Debts 1-22-03
12-31-02 JWP
=================================================================================================================== Allowance Provision for for Bad Debts Bad Debts =================================================================================================================== Balance at 12-31-01 13769 A 2002 write-offs 12195 Y 1574 2002 provision 11156 Z 11156 Balance per client at 12-31-02 12729 11156 (TB-BS) (TB-IS)
Adjusting journal entries:
(AJE # 2) (B-1) (840) Adjusted balance 11889 (2) N 11156 Journal entry to adjust allowance account: (None required) Balance per audit 11889 11156
Provision For Bad Debts Reasonableness Test:
EXPECTED AGED UNCOLL. EST AGE AMOUNT PERCENT UNCOLL. 1-30 104359 (B-1) 1.50% 1565 30-60 21057 (B-1) 10.00% 2106 60-90 14088 (B-1) 50.00% 7044 Over 90 0 (1) 100.00% 0 Balance per Analysis 10715 Adjusted Balance 11889 (2) N Difference 1174
A Agreed to prior year's working papers.
Y All write-offs approved by credit manager. Z Provision appears reasonable and in line with prior years. N Allowance balance per reasonableness test is lower than client balance per books. Client declined to reduce the account. The adjusted balance appears reasonable and is in line with prior year. As the adjustment would increase income and is less than 1% of net income (before adjustments), no adjustment is considered necessary. JWP
