During your examination of the 20x3 financial statements of Goyo Company, the following data were discovered. Give any correcting and adjusting entries called for by the information given. Disregard any effects on income tax. 7. Accrued sales commissions due to the salesmen had been overlooked in adjusting the accounts at the end of 20x1 and 20x2. Accrued amounts were: 20x1 – P1,350; 20x2 – P1,460. Accrued commissions at the end of 20x3 are P1,940. 8. Checks totaling P1,300 issued to former employees in 20x2 are still outstanding. The present whereabouts of such employees are unknown, and it is doubtful whether the checks will be presented for payments. 9. Merchandise costing P1,600, received on December 31, 20x3, had been included in the physical inventory taken on that date; however, the purchase was recorded when the invoice was received on January 4, 20x4.
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.
During your examination of the 20x3 financial statements of Goyo Company, the following data were discovered. Give any correcting and
7. Accrued sales commissions due to the salesmen had been overlooked in adjusting the accounts at the end of 20x1 and 20x2. Accrued amounts were: 20x1 – P1,350; 20x2 – P1,460. Accrued commissions at the end of 20x3 are P1,940.
8. Checks totaling P1,300 issued to former employees in 20x2 are still outstanding. The present whereabouts of such employees are unknown, and it is doubtful whether the checks will be presented for payments.
9. Merchandise costing P1,600, received on December 31, 20x3, had been included in the physical inventory taken on that date; however, the purchase was recorded when the invoice was received on January 4, 20x4.
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