QS 7-27A (Algo) Merchandising: Schedule of cash payments LO P4 Torres Company budgets merchandise purchases of $16,800 in January, $17,600 in February, and $20,200 in March. For those purchases, 60% of purchases are paid in the month of purchase and 40% are paid in the month after the purchase. The company purchased $24,000 of merchandise in December. Prepare a schedule of cash payments for merchandise for the months of January, February, and March.
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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