Question

Jefferson Apothecary Accounts Receivables After working in the natural industry for over a decade, Virginia McHoo founded Jefferson Apothecary in 2010. Fueled by a growing demand for top-quality essential oils, Virginia saw an opportunity to establish a business that could bring therapeutic-grade essential oils to customers at affordable prices. Thus, Jefferson Apothecary designed and built a state-of-the-art facility in Charlottesville, Virginia. It manufactures and markets 25 single oils and 10 blends across the east coast. Jefferson distributes its products to retail customers, consisting of local and regional stores and alternative medicine providers and clinics. Jefferson records revenue upon shipment to its customers at the contracted sales price, and it requires payment within 30 days. Accounting for Trade Receivables Jefferson Apothecary values its accounts receivable at the end of the year using an allowance account. An allowance for doubtful accounts is determined using an analysis of the aging of accounts receivable at the date of the consolidated financial statements, assessments of collectability based on an evaluation of historical and anticipated trends, the financial condition of the company's customers and an evaluation of the impact of economic conditions. Table 1 provides a summary of Jefferson's sales from its top customers, along with its receivables aging schedule from its accounting system. For fiscal year 2020, the average days' sales in trade receivables was 35.7 days, which was slightly below the industry average. Jefferson Apothecary Summary of Revenues and Accounts Receivable Aging Schedule December 31, 2020 >90 Days receivables outstanding Year-to-Date Total Accounts Revenues Receivable Current 31-60 61-90 $ 195,000 $ 19,400 $ 16,000 $ 3,400 $ S 150,000 13,800 8,000 4,500 1,300 75,000 6.900 4,900 2,000 50,000 4,950 3,000 1980 1,350 600 25,000 2,000 500 21,000 1,800 2009 1,800 6,000 650 650 5,000 700 700 4,100 500 500 3,000 2.300 1,800 700 500 350 $ 536,400 $ 52,500 $ 35,600 $ 12,400 $ 2,750 $ Vitamins and More Karma Market Piper's Natural Foods Southeast Pharmacy Nature Center Nature Herbal Remedies NOVA Grocery Natural Medicine Clinic Integrative Clinic Serenity Spa Other small retailers Total revenues 1,500 250 1,750

Answer 1

1
	Customer Name	Oustanding Amount ($)	Current	31-60	61-90	>90	Allowance	Estimated Accounts Receivable($)
	Vitamins more	19400	16000	3400	0	0	850	18550
	Karma Market	13800	8000	4500	1300	0	1775	12025
	Piper's Natural Foods	6900	4900	2000	0	0	500	6400
	Southest Pharmacy	4950	3000	1350	600	0	637.5	4312.5
	Nature Centre	2000	0	0	500	1500	1750	250
	Herbal Remedies	1800	1800	0	0	0	0	1800
	NoVa Grocery	650	0	650	0	0	162.5	487.5
	Nature Medicine Clinic	700	700	0	0	0	0	700
	Integrative Clinic	500	500	0	0	0	0	500
	Serenity Spa	0	0	0	0	0	0	0
	Other small retailers	1800	700	500	350	250	550	1250
	Total	52500	35600	12400	2750	1750	6225	46275
	Jefferson Apothecary value it's accounts Recivable at December31,2020-$46275
	Bad debt Expenses for the year ended Dec 31 2020-$6225
	Accounts Receviable is accounted under the head Current Assets and Allowance for bad debts is accounted as a expenses in Proft & Loss a/c
	Balance sheet		Profit & Loss a/c
	Liablities	Assets	Amount ($)		Expenses	Amount ($)	Income	Amount ($)
		Current Assets			To Bad debts	6225
		Accounts Recivable	52500
		Less Allowance for bad debts	-6225
			46275
2	As per General disclosures of the financial statements sec 326-20-50 includes Allowance for credit losses and past due status
	Disclosure requires entity to provide Class of recivable and bad debt allowances
3	Subsequent events ,that occur after the balance sheet date but before the financial statements are issued,to be recognized in the financial statements or disclosed in the notes to the financial statements
	additional evidence about conditions that existed at the balnce sheet date should be recognised in the financial statement otherwise disclosed in the notes to the financial statements.
	In the given case no addition evidence exist, so have disclose in notes to accounts