Requirements 1. Journalize the transactions. 2. Open the Allowance for Bad Debts T-account, and post entries affecting that account. Keep a running balance. 3. Show how Park Terrace Medical Center should report net accounts receivable on its December 31, 2016, balance sheet.
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.
2. Allowance CR Bal. $7,539 at Dec. 31, 2016
At September 30, 2016, the accounts of Park Terrace MedicalCenter (PTMC) include the following:
During the last quarter of 2016, PTMC completed thefollowing selected transactions:
Requirements
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