Cute Company disclosed the following information on December 31, 2021: Mortgage payable, issued on March 1, 2012, maturing after 10 years P1,500,000 Notes Payable P40,000 Deferred tax liability P10,000 Notes payable due to bank, 12% interest bearing note payable yearly, issued on August 31, 2021, maturing on August 31, 2022 P1,000,000 Compute for the current liabilities as of December 31, 2021
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.
Cute Company disclosed the following information on December 31, 2021:
| Mortgage payable, issued on March 1, 2012, maturing after 10 years | P1,500,000 |
| Notes Payable | P40,000 |
| P10,000 | |
| Notes payable due to bank, 12% interest bearing note payable yearly, issued on August 31, 2021, maturing on August 31, 2022 |
P1,000,000 |
Compute for the current liabilities as of December 31, 2021
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