Magic Cleaning Services Unadjusted Trial Balance At December 31 Debit $430,900 158,000 111,000 2,400 90,000 Account Cash Accounts Receivable Supplies Prepaid Rent Building Accounts Payable Deferred Service Revenue Common Stock Retained Earnings Service Revenue Wage Expense Utilities Expense Administrative Expense Totals Credit $ 45,900 98,000 100,000 0 619,200 48,600 6,200 16,000 $863,100 $863,100
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.
Magic Cleaning Services (MCS) has a fiscal year-end of December 31. It is the first year of operations. As of year-end, MCS has the following unadjusted
In addition, it has not adjusted for the following transactions:
- All of the prepaid rent expired by the end of the year.
- The building was purchased early this year and has a 30-year life with no residual value.
- The company provided a portion of the services related to an advance collection on December 20. It performed one-half of the services to be performed in the current year.
- Wages for the current year in the amount of $24,000 should be accrued and are set to be paid out to workers in January.
Journalize the necessary
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