Company provided the following information related to its accounts receivable. Last year 12/31 Estimated that P7,000 of accounts receivable would become uncollectible. Current year 1/05 Wrote-off the P 5,000 balance owed by J Company and the 2,000 balance
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.
Company provided the following information related to its
Last year 12/31 Estimated that P7,000 of accounts receivable would become
uncollectible.
Current year 1/05 Wrote-off the P 5,000 balance owed by J Company and the
2,000 balance owed by F Company.
3/18 Reinstate the account of J Company that had been written
off since they signify and confirmed the payment.
3/21 Receipt of payment in full.
Required: Journalize the transactions
Step by step
Solved in 2 steps
