Bad Debts: At November 30, 2018, Contempory Meals had accounts receivable of $34,000 and allowance for uncollectable accounts had a credit balance of $3,000. During December 2018 the company recorded the following: Sales of $378,000 Collections on account $266,000 Wrote off uncollectable receivables, $5,600 Uncollectable account expense, estimated as 3% of credit sales. Journalize the following transactions of Contempory Meals. Use this information to prepare a balance sheet extract.
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.
Bad Debts:
At November 30, 2018, Contempory Meals had
Sales of $378,000
Collections on account $266,000
Wrote off uncollectable receivables, $5,600
Uncollectable account expense, estimated as 3% of credit sales.
Journalize the following transactions of Contempory Meals. Use this information to prepare a
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