What are the key points arising from the credit controller's review in respect of each trade receivable balance and what suggestions can be made to improve the aged analysis report?
What are the key points arising from the credit controller's review in respect of each trade receivable balance and what suggestions can be made to improve the aged analysis report?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Princeton's detailed age analysis of trade receivables at 31 December 2020 shows the following:
| Customer name |
Total £ |
Credit £ |
0-30 £ |
31-60 £ |
61-90 £ |
Over 90 £ |
| A. Ames | 16200 | 15000 | 2000 | 8700 | 2500 | 3000 |
| B.Bristow | 18300 | 25000 | 18300 | - | - | - |
| C.Chen | 4700 | 4800 | - | 2000 | 2700 | - |
| TOTAL | 39200 | - | 20300 | 10700 | 5200 | 3000 |
Notes:
• The company offers 30 days credit to its customers.
• The credit is offered to the customers based on words of mouth
• Ames is disputing the quality of some of the goods and refusing to pay, no decision has
been made yet (£3,000 over 90 days)
• Chen has just put in an order for £5,000, he is a good friend of the director
Required:
What are the key points arising from the credit controller's review in respect of each trade
receivable balance and what suggestions can be made to improve the aged analysis report?
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