Ella Manalo, the proprietress of Manalo Slimming Center, presented the following adjusted account balances as of January 31, 2018: Cash on hand and in bank Utilities expense Accounts receivable Depreciation expense Allowance for doubtful accounts Rent expense Notes receivable 5,960 1,200 8,000 1,100 1,000 1,800 4,000 300 600 32,000 4,500 48,630 820 88,000 6,000 1,450 18,000 8,600 P Interest income Supplies Service fees Manalo, drawing Manalo, Capital Prepaid rent Building Accounts payable Salaries payable Accumulated depreciation Unearned service fees Compute for the following: (Show computations) 1. Profit (Loss) – please indicate if it is "Profit" or "Loss" 2. Capital balance at the end (after closing entries) 3. Total assets 4. Total liabilities
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.
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