14666-6-24E AID: 1825 | 30/10/2014
Interpreting the accounts receivable footnote:
a) and b)
Calculation of percentage of uncollectible accounts:
Particulars20102009
Accounts receivable (net) (a)$18,481$16,537
Allowance for uncollectible accounts (b)$525$629
Gross accounts receivable (a)- (b)= (c)$19,006$17,166
Percentage of uncollectible accounts to gross accounts
receivable (b)/(a)= (d)2.76%3.66%
Hence, the calculated percentage of uncollectible account in
2009 is 3.66% and 2010 is 2.76%.
c)
Bad debts expense did HPQ report:
Particulars201020092008
Bad debts expense $80$282$226
Amount actually written off$191$206$144
Comparison of bad debts with accounts receivable actually
written off:
The provision of bad debt amount is decreased compared than the
year 2009. The total three years the HPQ affect is small amount
only from uncollectible accounts receivable $47 ($588-$541).
d)
The calculated percentage of uncollectible account in 2009 is
3.66% and 2010 is 2.76% (refer to section (b)).
For predict the allowance for accounts receivable to write-offs
the allowance for accounts receivable at the opening of the
year.
Particulars20102009
Amount actually written off (a)$191$206
Allowance for uncollectible accounts (b)$629$553
Percentage (a)/(b)= (c)30%37%
Based on the calculation the percentage of allowance decreased
from 2009 to 2010.
