Accounts Receivables - Ageing

1 - 15 15 - 30 30 - 45 45 - 60 60- 90
Date Days Days Days Days Days
JANUARY 06 $ 100 80 50 30 10
FEBRUAR 06 $ 150 70 40 20 20
MARCH 06 $ 200 90 30 10 10
APRIL 06 $ 180 70 70 40 40
MAY 06 $ 210 60 30 20 20
JUNE 06 $ 160 80 10 30 10
JULY 06 $ 180 90 60 10 20
AUGUST 06 $ 170 50 50 40 10
SEPTEMBER 06 $ 160 80 40 20 20
OCTOBER 06 $ 200 100 30 30 10
NOVEMBER 06 $ 190 50 52 50 10
DECEMBER 06 $ 180 70 50 20 20

JANUARY 06 % 31.3% 25.0% 15.6% 9.4% 3.1%

FEBRUAR 06 % 42.9% 20.0% 11.4% 5.7% 5.7%
MARCH 06 % 50.0% 22.5% 7.5% 2.5% 2.5%
APRIL 06 % 41.9% 16.3% 16.3% 9.3% 9.3%
MAY 06 % 53.8% 15.4% 7.7% 5.1% 5.1%
JUNE 06 % 47.1% 23.5% 2.9% 8.8% 2.9%
JULY 06 % 42.9% 21.4% 14.3% 2.4% 4.8%
AUGUST 06 % 44.7% 13.2% 13.2% 10.5% 2.6%
SEPTEMBER 06 % 47.1% 23.5% 11.8% 5.9% 5.9%
OCTOBER 06 % 47.6% 23.8% 7.1% 7.1% 2.4%
NOVEMBER 06 % 49.7% 13.1% 13.6% 13.1% 2.6%
DECEMBER 06 % 50.0% 19.4% 13.9% 5.6% 5.6%

Net Sales Days of

MONTH 90 DAYS Sales
NOVEMBER 05 $ 200 - 0
DECEMBER 05 $ 300 - 0
JANUARY 06 $ 264 764 31.1
FEBRUAR 06 $ 294 858 30.9
MARCH 06 $ 341 898 34.1
APRIL 06 $ 383 1,018 33.9
MAY 06 $ 332 1,056 28.3
JUNE 06 $ 286 1,001 25.7
JULY 06 $ 357 976 33.0
AUGUST 06 $ 315 959 29.6
SEPTEMBER 06 $ 312 984 28.5
OCTOBER 06 $ 366 993 33.2
NOVEMBER 06 $ 343 1,021 30.3
DECEMBER 06 $ 332 1,041 28.7
Average monthly Net Sales are calculated
on the basis of a 3 months period
bles - Ageing

over Identified Gross Bad Debt Net

90 Days writte-offs Receivables Allowance Receivables
0 50 320 57 264
10 40 350 56 294
20 40 400 59 341
0 30 430 47 383
0 50 390 58 332
10 40 340 54 286
20 40 420 63 357
10 50 380 65 315
0 20 340 28 312
10 40 420 54 366
0 30 382 39 343
0 20 360 29 332

0.0% 15.6% 100.0%

2.9% 11.4% 100.0%
5.0% 10.0% 100.0%
0.0% 7.0% 100.0%
0.0% 12.8% 100.0%
2.9% 11.8% 100.0%
4.8% 9.5% 100.0%
2.6% 13.2% 100.0%
0.0% 5.9% 100.0%
2.4% 9.5% 100.0%
0.0% 7.9% 100.0%
0.0% 5.6% 100.0%

Formulas:

Accounts Receivable Turnover

Net Sales divided by Accounts Receivable

Days of Sales
360 divided by A/R Turnover
 COMPUTATION OF REQUIRED BAD DEBT ALLO

1 - 15 15 - 30 30 - 45
Gross Accounts Receivables Days Days Days
JANUARY 06 $ 100 80 50
FEBRUAR 06 $ 150 70 40
MARCH 06 $ 200 90 30
APRIL 06 $ 180 70 70
MAY 06 $ 210 60 30
JUNE 06 $ 160 80 10
JULY 06 $ 180 90 60
AUGUST 06 $ 170 50 50
SEPTEMBER 06 $ 160 80 40
OCTOBER 06 $ 200 100 30
NOVEMBER 06 $ 190 50 52
DECEMBER 06 $ 180 70 50

Required Bad Debt Allowance

Bad Debt Allowance
0% 0% 1%
JANUARY 06 $ 0 0 0.5
FEBRUAR 06 $ 0 0 0.4
MARCH 06 $ 0 0 0.3
APRIL 06 $ 0 0 0.7
MAY 06 $ 0 0 0.3
JUNE 06 $ 0 0 0.1
JULY 06 $ 0 0 0.6
AUGUST 06 $ 0 0 0.5
SEPTEMBER 06 $ 0 0 0.4
OCTOBER 06 $ 0 0 0.3
NOVEMBER 06 $ 0 0 0.52
DECEMBER 06 $ 0 0 0.5

Comments
The Allowance for Bad Debts is calculated on the basis of the company's imposed rates for eac

The necessary P&L adjustments are calculated by comparing the previous months required All
the required Allowance computed for the present month.
QUIRED BAD DEBT ALLOWANCE

45 - 60 60- 90 over Identified Grand

Days Days 90 Days writte-offs Total
30 10 0 50 320
20 20 10 40 350
10 10 20 40 400
40 40 0 30 430
20 20 0 50 390
30 10 10 40 340
10 20 20 40 420
40 10 10 50 380
20 20 0 20 340
30 10 10 40 420
50 10 0 30 382
20 20 0 20 360
US-$
Required Bad Debt Allowance TOTAL THIS TOTAL LAST
P&L IMPACT
10% 30% 75% 100% MONTH MONTHS
3 3 0 50 57 0 -57
2 6 7.5 40 56 57 1
1 3 15 40 59 56 -3
4 12 0 30 47 59 13
2 6 0 50 58 47 -12
3 3 7.5 40 54 58 5
1 6 15 40 63 54 -9
4 3 7.5 50 65 63 -2
2 6 0 20 28 65 37
3 3 7.5 40 54 28 -25
5 3 0 30 39 54 15
2 6 0 20 29 39 10

the company's imposed rates for each ageing period.

ring the previous months required Allowance with

 Booking of Bad Debt allowances and the presentation of Accou
the Financial Statemen

1) Recoding of the transactions in the General Ledgers

Accounting Transactions
Sale to Customer
1% Reserve for Bad Debts

A/C Receivables
$10,000

Allowance for Bad Debts

$ 100

2) Presentation of the Accounts Receivables and the Allowanc

Financial Statement / Balance Sheet

Gross Receivables $ 10,000

Reserve for Bad Debts $ (100)

Net Receivables $9,900

nd the presentation of Accounts Receivables in the General Ledgers versus
the Financial Statements

he General Ledgers

$ 10,000
$ 100

Profit and Loss

$ 100 $ 10,000

eivables and the Allowance of Bad Debt in the Financial Statements