2-1 Accounts Receivables Presented below are unaudited balances of selected accounts of YELLOW Company as of December 31, 2020: Unaudited Bal, 12/31/20 Debit 500,000 1,300,000 8,000 Selected Accounts Credit Cash Accounts receivable Allowance for bad debts Net sales 6,750,000 Additional information are as follows: • Goods amounting to P50,000 were invoiced for the accounts of UNO Store, recorded on January 2, 2021 with terms n/60, FOB shipping point. The goods were shipped to UNO on December 30, 2020. The bank returned on December 29, 2020, a customer's check for P15,000 marked "NSF", but no entry was made.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
1. How much should be reported as
the year ended December 31, 2020?
2. What is the net realizable value of the
receivables
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