On October 1, the accounts payable ledger of XYZ Company showed the following balances: Dora Company $2,700, Judy Abbott Co. $2,500, Majid Co. $1,800, and Cinderella Company $3,700. The October transactions involving the payment of cash were as follows. Oct. 1 Purchased merchandise, check no. 63, $300. 3 Purchased equipment, check no. 64, $800. 5 Paid Dora Company balance due of $2,700, less 2% discount, check no. 65, $2,646. 10 Purchased merchandise, check no. 66, $2,550. 15 Paid Majid Co. balance due of $1,800, check no. 67. 16 The owner, pays his personal insurance premium of $400, check no. 68. 19 Paid Judy Abbott Co. in full for invoice no. 610, $2,000 less 2% cash discount, check no. 69, $1,960. 29 Paid Cinderella Company in full for invoice no. 264, $2,500, check no. 70. Instructions Journalize the transactions above in a four-column cash payments journal. Insert the beginning balances in the Accounts Payable control and subsidiary accounts and post the October transactions to these accounts
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 October 1, the accounts payable ledger of XYZ Company showed the following balances: Dora Company $2,700, Judy Abbott Co. $2,500, Majid Co. $1,800, and Cinderella Company $3,700. The October transactions involving the payment of cash were as follows.
Oct. 1 Purchased merchandise, check no. 63, $300.
3 Purchased equipment, check no. 64, $800.
5 Paid Dora Company balance due of $2,700, less 2% discount, check no. 65, $2,646.
10 Purchased merchandise, check no. 66, $2,550.
15 Paid Majid Co. balance due of $1,800, check no. 67.
16 The owner, pays his personal insurance premium of $400, check no. 68.
19 Paid Judy Abbott Co. in full for invoice no. 610, $2,000 less 2% cash discount, check no. 69, $1,960.
29 Paid Cinderella Company in full for invoice no. 264, $2,500, check no. 70.
Instructions
- Journalize the transactions above in a four-column cash payments journal.
- Insert the beginning balances in the Accounts Payable control and subsidiary accounts and
post the October transactions to these accounts.
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