Kings Company has the following data relating to accounts receivable for the year ended December 31, 2023: Accounts Receivable, January 1 P 325,000 Allowance for Bad Debts, January 1 18,400 Sales during the year, all on account, terms: 5/10, 3/15, n/30 2,800,000 Cash received from customers during the year 2,260,000 Accounts written off during the year 17,500 Sales returns and allowances 14,280 An analysis of cash received from customers during the year revealed that P1,140,000 was received from customers availing the 10-day discount period, P873,000 was received from customers availing the 15-day discount period, P12,000 represented recovery of accounts written off, and the balance was received from customers paying beyond the discount period. Kings Company's year-end balance of allowance for bad debts was estimated to be 5% of the outstanding accounts receivable as at December 31, 2023, based on the aging of the accounts. Question: 23. Accounts receivable balance at December 31, 2023 is A. P770,220 B. P758,220 C. P746,220 D. P742,620
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.
Kings Company has the following data relating to
Accounts Receivable, January 1 P 325,000
Allowance for
Sales during the year, all on account, terms: 5/10, 3/15, n/30 2,800,000
Cash received from customers during the year 2,260,000
Accounts written off during the year 17,500
Sales returns and allowances 14,280
An analysis of cash received from customers during the year revealed that P1,140,000 was received from customers availing the 10-day discount period, P873,000 was received from customers availing the 15-day discount period, P12,000 represented recovery of accounts written off, and the balance was received from customers paying beyond the discount period.
Kings Company's year-end balance of allowance for bad debts was estimated to be 5% of the outstanding accounts receivable as at December 31, 2023, based on the aging of the accounts.
Question:
23. Accounts receivable balance at December 31, 2023 is
A. P770,220
B. P758,220
C. P746,220
D. P742,620
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