Analysis of the aged accounts receivables
When remaining the accounts of Brute Company, it is ascertained that balances relating to both receivables and payables are included in a single controlling account called “receivables control” that has a debit balance of 4,850,000.
An analysis of the make-up of this account revealed the following:
Account Receivables-customers 7,800,000
Accounts Receivables-officers,current 500,000
Debit balances-creditors 300,000
Postdated checks from customers 400,000
Subscriptions receivable 800,000
Accounts payable for merchandise
Credit balances in customers’ accounts
Cash received in advance from customers for goods not yet shipped
Expected bad debts
After further analysis of the aged accounts receivables, it is determined that the allowance for doubtful accounts should be 200,000.
Required: Compute the amount that should be reported as “trade and other receivables” under current assets.