A Beautiful Face Cosmetics Company sell its products to customer on a credit basis. An adjusting entry for bad debts Expense is recorded only at December 31. The 2020 statement of financial position disclosed Accounts Receivable, net of P60,000 allowance for uncollectible, P864,000. During 2020, credit sales were P3,500,000 cash collections from customers, P3,554,000 and P70,000 in accounts receivable written-off, In addition, P6,000 was collected from customer whose account was written-off in 2020. A review of accounts Receivable for uncollectible amounts at December 31,2021, reveals the following: Age receivables % of uncollectible 0-60 days 65% 4% 61-90 days 20% 15% 91-120 days 10% 25% Over 120 days 5% 40% What is the amortized cost of the receivable on December 31,2021? P715,200 P719,200 P797,000 P800,000
A Beautiful Face Cosmetics Company sell its products to customer on a credit basis. An adjusting entry for bad debts Expense is recorded only at December 31. The 2020 statement of financial position disclosed Accounts Receivable, net of P60,000 allowance for uncollectible, P864,000. During 2020, credit sales were P3,500,000 cash collections from customers, P3,554,000 and P70,000 in accounts receivable written-off, In addition, P6,000 was collected from customer whose account was written-off in 2020. A review of accounts Receivable for uncollectible amounts at December 31,2021, reveals the following: Age receivables % of uncollectible 0-60 days 65% 4% 61-90 days 20% 15% 91-120 days 10% 25% Over 120 days 5% 40% What is the amortized cost of the receivable on December 31,2021? P715,200 P719,200 P797,000 P800,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
A Beautiful Face Cosmetics Company sell its products to customer on a credit basis. An adjusting entry for bad debts Expense is recorded only at December 31. The 2020 statement of financial position disclosed Accounts Receivable , net of P60,000 allowance for uncollectible, P864,000. During 2020, credit sales were P3,500,000 cash collections from customers, P3,554,000 and P70,000 in accounts receivable written-off, In addition, P6,000 was collected from customer whose account was written-off in 2020. A review of accounts
Receivable for uncollectible amounts at December 31,2021, reveals the following:
Age receivables % of uncollectible
0-60 days 65% 4%
61-90 days 20% 15%
91-120 days 10% 25%
Over 120 days 5% 40%
What is the amortized cost of the receivable on December 31,2021?
Receivable for uncollectible amounts at December 31,2021, reveals the following:
Age receivables % of uncollectible
0-60 days 65% 4%
61-90 days 20% 15%
91-120 days 10% 25%
Over 120 days 5% 40%
What is the amortized cost of the receivable on December 31,2021?
P715,200
P719,200
P797,000
P800,000
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