In testing the sales cut-off for the EXAMPLE COMPANY in connection with an audit for the year ended October 31, 2022, you find the following information. A physical inventory was taken as of the close of business on October 31, 2022. All customers are within a three-day delivery area of the company's plant. The unadjusted balances of Sales and Inventories are P7,500,000 and P330,000, respectively. Date Shipped Oct. 20 Date Recorded Oct. 31 Nov. 2 Invoice Number ЕОВ Terms Sales Cost 2,700 6671 Destination 3,000 6672 Shipping point Oct. 31 7,500 6,000 6673 Shipping point Oct. 25 Oct. 31 5,400 3,600 Oct. 31 Oct. 29 Nov. 2 Oct. 23 Nov. 6 Nov. 3 Oct. 31 Nov. 2 6674 Destination 12,600 9,300 6675 Shipping point Oct. 31 27,600 24,000 6676 Shipping point Nov. 2 19,500 15,300 6677 Shipping point Nov. 5 22,500 17,400 6678 Destination Oct. 25 11,700 6,000 6679 Shipping point Nov. 4 25,800 24,600 6680 Destination Nov. 5 15,000 12,000
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.
4. What is the balance of AR Corporation's
5. What is the amount of the current accounts receivable of AR Corporation that might prove to be uncollectible?
6. What is the balance of the allowance for uncollectible accounts before adjustments of AR Corporation on December 31, 2021?
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