Princeton's detailed age analysis of trade receivables at 31 December 2020 shows the following: Customer name Total outstanding Credit limit 0-30 days 31-60 days 61-90 days Over 90 days £ £ £ £ £ £ A Ames 16 200 15 000 2 000 8 700 2 500 3 000 B Bristow 18 300 25 000 18 300 C Chen 4 700 4 800 2 000 2 700 TOTAL 39 200 - 20 300 10 700 5 200 3 000 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
Princeton's detailed age analysis of trade receivables at 31 December 2020 shows the following:
Customer
name
Total
outstanding
Credit
limit
0-30
days
31-60
days
61-90
days
Over 90
days
£ £ £ £ £ £
A Ames 16 200 15 000 2 000 8 700 2 500 3 000
B Bristow 18 300 25 000 18 300
C Chen 4 700 4 800 2 000 2 700
TOTAL 39 200 - 20 300 10 700 5 200 3 000
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
Step by step
Solved in 2 steps
