Danica Patrick, Inc. includes the following account among its trade receivables. Hopkins Co. 1/1 Balance forward 700 1/28 Cash (#1710) 1,100 1/20 Invoice #1710 1,100 4/2 Cash (#2116) 1,350 3/14 Invoice #2116 1,350 4/10 Cash (1/1 Balance) 155 4/12 Invoice #2412 1,710 4/30 Cash (#2412) 1,000 9/5 Invoice #3614 490 9/20 Cash (#3614 and 10/17 Invoice #4912 860 part of #2412) 790 11/18 Invoice #5681 2,000 10/31 Cash (#4912) 860 12/20 Invoice #6347 800 12/1 Cash (#5681) 1,250 12/29 Cash (#6347) 800 Instructions Age the balance and specify any items that apparently require particular attention at year-end.
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.
Danica Patrick, Inc. includes the following account among its trade receivables.
| Hopkins Co. | |||||||||
| 1/1 | Balance forward | 700 | 1/28 | Cash (#1710) | 1,100 | ||||
| 1/20 | Invoice #1710 | 1,100 | 4/2 | Cash (#2116) | 1,350 | ||||
| 3/14 | Invoice #2116 | 1,350 | 4/10 | Cash (1/1 Balance) | 155 | ||||
| 4/12 | Invoice #2412 | 1,710 | 4/30 | Cash (#2412) | 1,000 | ||||
| 9/5 | Invoice #3614 | 490 | 9/20 | Cash (#3614 and | |||||
| 10/17 | Invoice #4912 | 860 | part of #2412) | 790 | |||||
| 11/18 | Invoice #5681 | 2,000 | 10/31 | Cash (#4912) | 860 | ||||
| 12/20 | Invoice #6347 | 800 | 12/1 | Cash (#5681) | 1,250 | ||||
| 12/29 | Cash (#6347) | 800 |
Instructions
Age the balance and specify any items that apparently require particular attention at year-end.
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