) Jim Carrie Company shows a balance of $221,140 in the Accounts Receivable account on December 31, 2020. The balance consists of the following. Installment accounts due in 2021 $23,000 Installment accounts due after 2021 34,000 Overpayments to vendors 2,640 Due from regular customers, of which $40,000 represents accounts pledged as security for a bank loan 79,000 Advances to employees 1,500 Advance to subsidiary company (due in 2021) 81,000 Instructions Illustrate how the information above should be shown on the balance sheet of Jim Carrie Company on December 31, 2020. The company’s operating cycle is such that all installment receivables are classified as current.
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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.
) Jim Carrie Company shows a balance of $221,140 in the
| Installment accounts due in 2021 | $23,000 | |
| Installment accounts due after 2021 | 34,000 | |
| Overpayments to vendors | 2,640 | |
| Due from regular customers, of which $40,000 represents accounts pledged as security for a bank loan |
79,000 | |
| Advances to employees | 1,500 | |
| Advance to subsidiary company (due in 2021) | 81,000 |
Instructions
Illustrate how the information above should be shown on the balance sheet of Jim Carrie Company on December 31, 2020. The company’s operating cycle is such that all installment receivables are classified as current.
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