Orr Company prepared an aging of accounts receivable on December 31, 20XX and determined that the net realizable value of the accounts receivable was P2,500,000. Additional information is available as follows: Allowance for doubtful accounts on January 1 - 280,000 Accounts written off as uncollectible - 230,000 Accounts receivable on December 31 - 2,700,000 Uncollectible accounts recovery - 50,000 For the year ended December 31, 20XX, what amount should be recognized as doubtful accounts expense?
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.
1. Orr Company prepared an aging of
Allowance for doubtful accounts on January 1 - 280,000
Accounts written off as uncollectible - 230,000
Accounts receivable on December 31 - 2,700,000
Uncollectible accounts recovery - 50,000
For the year ended December 31, 20XX, what amount should be recognized as doubtful accounts expense?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
