Pampi's Co. has the following information. Days Outstanding Receivable Balances % collectible 0-60 480,000 1% 61-120 360,000 2% Over 120 400,000 6% During the year, Pampi wrote off P14,000 receivables and recovered 8,000 that had been written-off in prior years. The allowance for doubtful accounts has a beginning balance of P4,000. How much is the net realizable value of accounts receivable at year-end? How much is the 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.
| 8. Use the following information for the next two questions: | ||||||||||||
| Pampi's Co. has the following information. | ||||||||||||
| Days Outstanding | Receivable Balances | % collectible | ||||||||||
| 0-60 | 480,000 | 1% | ||||||||||
| 61-120 | 360,000 | 2% | ||||||||||
| Over 120 | 400,000 | 6% | ||||||||||
| During the year, Pampi wrote off P14,000 receivables and recovered 8,000 that had been written-off in prior years. The allowance for doubtful accounts has a beginning balance of P4,000. | ||||||||||||
| How much is the net realizable value of |
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| How much is the doubtful accounts expense? |
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