Mountain Co.'s Accounts Receivable has a balance of P 240,000 at the beginning of the period. The following occurred during the period. a. Sales on account of P 300,000 b. Collection on account P 230,000 c. The collectability of P 30,000 accounts receivable is found to be doubtful. d. P 15,000 accounts receivable are deemed worthless. e. P 10,000 accounts receivable previously written off are subsequently collected What is the amount of Bad Debts Expense that shall be reported in the statement of financial performance?
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.
Mountain Co.'s
a. Sales on account of P 300,000
b. Collection on account P 230,000
c. The collectability of P 30,000 accounts receivable is found to be doubtful.
d. P 15,000 accounts receivable are deemed worthless.
e. P 10,000 accounts receivable previously written off are subsequently collected
What is the amount of
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
