Matu Inc. has the following information during the year: sales 2,000,000 sales discounts 30,000 Accounts receivable, beginning 250,000 collections from all customers 2,100,000 allowance for doubtful accounts, beginning 5,000 customer accounts written off 2,000 If all sales are credit sales, and privision for bad debts is equal to 2% of net credit sales, compute the following: - Bad debt expense - Net relizable value, ending If 20% of sales are cash sales, and provision for bad debts is equal to 2% of net credit sales, compute the following: - Bad debt expense - Net reliazable value, ending 30% of sales are cash sales, provision for bad debts is equal to 2% of net credit sales, and Php10,000 from collections from customers are recovery of bad debt previously written off, compute the following: - Bad debt expense - Net reliazable value, ending
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.
Matu Inc. has the following information during the year:
sales 2,000,000
sales discounts 30,000
collections from all customers 2,100,000
allowance for doubtful accounts, beginning 5,000
customer accounts written off 2,000
- If all sales are credit sales, and privision for
bad debts is equal to 2% of net credit sales, compute the following:
- Bad debt expense
- Net relizable value, ending - If 20% of sales are cash sales, and provision for bad debts is equal to 2% of net credit sales, compute the following:
- Bad debt expense
- Net reliazable value, ending - 30% of sales are cash sales, provision for bad debts is equal to 2% of net credit sales, and Php10,000 from collections from customers are recovery of bad debt previously written off, compute the following:
- Bad debt expense
- Net reliazable value, ending
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