Required information [The following information applies to the questions displayed below.] The general ledger of Zips Storage at January 1, 2024, includes the following account balances: Accounts Cash Accounts Receivable. Prepaid Insurance Land 4. May 6 5. 6. September 10 7. October 31 8. November 20 9. December 30 Debits $25,500 16,300 13,800 157,000 July 15 Credits Accounts Payable Deferred Revenue Common Stock Retained Earnings Totals $212,600 The following is a summary of the transactions for the year: 1. January 9 2. February 12 3. April 25 $7,600 6,700 152,000 46,300 $212,600 Provide storage services for cash, $143,100, and on account, $56,700. Collect on accounts receivable, $52,400. Receive cash in advance from customers, $13,800. Purchase supplies on account, $11,000. Pay property taxes, $9,400. Pay on accounts payable, $12,300. Pay salaries, $132,600. Issue shares of common stock in exchange for $36,000 cash. Pay $3,700 cash dividends to stockholders.

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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.