NOTE 4. ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2017

NOTE 4. ACCOUNTS RECEIVABLE

The nature of the net accounts receivable for September 30, 2017, in the amount of $3,030,636 are for Export Service Agreements. The Company's allowance for bad debt is $374,317 which provides a net receivable balance of $2,656,319

Accounts' receivable is stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through a charge to earnings and a credit to an allowance for bad debts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for bad debts and a credit to accounts receivable.

Accounts receivable consist of the following:

	September 30			December 31
	2017			2016

Accounts receivable	$	916,335		$	1,215,377
Accounts receivable- related parties		2,114,301			304,525
Less: Allowance for doubtful accounts		(374,317	)		(221,221	)
Accounts receivable, net	$	2,656,319		$	1,298,681

Bad debt expense was $156,967 and $49,852 for the nine months ended September 30, 2017 and 2016, respectively.

Allowance for bad debt policy

Our bad debt policy is determined by the Company's periodic review of each account receivable for reasonable assurance of collection. Factors considered are the exporter's financial condition, past payment history if any, any conversations with the exporter about the exporter's financial conditions and any other extenuating circumstances. Based upon the above factors the Company makes a determination whether the receivable are reasonable assured of collection. Based upon our review if required we adjust the allowance for bad debt.