Q8. The following information relates to the Accounts Receivable of Pankhurst Inc. as at Dec 3, 2019. Age Balance% Estimated Allowa Uncollectible Under172,0001 60 days 60 to 136,0003 90 days 91 to 39,000 5 120 days Over 23,000 25 120 Total Use the aging method to journalize Pankhurst's Bad Debt expense for 2019. Note that on Jan 1, 2019, the Allowance for Doubtful Accounts had a credit balance of $20,000. During 2019 accounts totaling $15,300 were written off. Show calculations to get credit.
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.
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