BTS Company had the following data relating to its accounts receivable. Accts. Receivable, Dec. 31, 2020 - P1,300,000 Credit sales for 2021 - P5,400,000 Collections from customers during 2021, excluding recoveries - P4,750,000 Accounts written off on Sept. 30, 2021 - P95,000 Recoveries of accounts previously written off in prior years - P20,000 Est. uncollectible receivables per aging, Dec. 31, 2021 - P165,000 How much is the amortized cost of BTS Company’s accounts receivable at December 31, 2021
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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.
BTS Company had the following data relating to its
Accts. Receivable, Dec. 31, 2020 - P1,300,000
Credit sales for 2021 - P5,400,000
Collections from customers during 2021, excluding recoveries - P4,750,000
Accounts written off on Sept. 30, 2021 - P95,000
Recoveries of accounts previously written off in prior years - P20,000
Est. uncollectible receivables per aging, Dec. 31, 2021 - P165,000
How much is the amortized cost of BTS Company’s accounts receivable at December 31, 2021?
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