On December 31, Year 2, Kimberly Company had the following normal account balances in its general ledger. The accounts are listed in random order. Salaries expense $ 18,900 Buildings 87,000 Retained earnings 1/1/Year 2 17,000 Operating expense 103,900 Cash 27,000 Accounts payable 16,000 Bonds payable 32,000 Accounts receivable 26,000 Common stock 57,000 Sales revenue 157,000 Prepaid rent 16,200
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.
On December 31, Year 2, Kimberly Company had the following normal account balances in its general ledger. The accounts are listed in random order.
| Salaries expense | $ 18,900 |
|---|---|
| Buildings | 87,000 |
| 17,000 | |
| Operating expense | 103,900 |
| Cash | 27,000 |
| Accounts payable | 16,000 |
| Bonds payable | 32,000 |
| 26,000 | |
| Common stock | 57,000 |
| Sales revenue | 157,000 |
| Prepaid rent | 16,200 |
Required:
Use the information regarding normal account balances to prepare a
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