Lyka Co. determined that the net value of its accounts receivable at December 31, 2020, based on an aging of the receivables, was P325,000. Additional information is as follows: Allowance for uncollectible accounts—1/1/20 30,000 Uncollectible accounts written off during 2020 18,000 Uncollectible accounts recovered during 2020 2,000 Accounts receivable at 12/31/20 350,000 1. For 2020, what would be Inge’s uncollectible accounts expense? __________
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.
Lyka Co. determined that the net value of its
based on an aging of the receivables, was P325,000. Additional information is as follows:
Allowance for uncollectible accounts—1/1/20 30,000
Uncollectible accounts written off during 2020 18,000
Uncollectible accounts recovered during 2020 2,000
Accounts receivable at 12/31/20 350,000
1. For 2020, what would be Inge’s uncollectible accounts expense? __________
2. At January 1, 2020, Jamin Co. had a credit balance of P260,000 in its allowance for uncollectible accounts. Based on past experience, 2% of Jamin’s credit sales have been uncollectible. During 2020 Jamin wrote off P325,000 of uncollectible accounts. Credit sales for 2020 were P9,000,000. In its December 31, 2020
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