NOTE 4. ACCOUNTS RECEIVABLE

6 Months Ended

Jun. 30, 2018

NOTE 4. ACCOUNTS RECEIVABLE

The nature of the net accounts receivable for June 30, 2018, in the amount of $4,070,447 are for Export Service Agreements. The Company's allowance for bad debt is $431,862 which provides a net receivable balance of $3,638,585.

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:

	June 30,			December 31,
	2018			2017

Accounts receivable	$	1,114,454		$	1,045,412
Accounts receivable- related parties		2,955,992			2,459,135
Less: Allowance for doubtful accounts		(431,862	)		(403,568	)
Accounts receivable, net	$	3,638,585		$	3,100,979

Bad debt expense was $27,496 and $52,394 for the six months ended June 30, 2018 and 2017, 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.