The December 31, 2022 statement of financial position of Xu Company showed Accounts Receivable balance of P350,000 and Allowance for Bad Debts of P50,000. Following is a summary of accounts receivable transactions recorded by the Company in 2023: Total sales during the year 4,360,000 1,890,000 Total cash sales Total collections on accounts during the year* Accounts written of as uncollectible Recoveries of accounts written off in the previous years 0-30 days 31-60 days 61 to 90 days Over 90 days *This includes collections from accounts previously written off. On December 31, 2023, an aging of accounts receivable indicated the following: Age Group 50% 27% 2,300,000 % of Total Outstanding Probability of Collection Receivables 17% 15,000 6% 30,000 97% 88% 65% 55%
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.
Questions:
a. The net realizable value of
b. Your proposed
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