[The following information applies to the questions displayed below.] The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 anc Year 2. December 31 Cash Accounts receivable office supplies office equipment Trucks Building Land Accounts payable Note payable Numerator: Year 1 $ 56,760 30,810 4,860 1 1 149,190 58,380 3. Compute the Year 2 year-end debt ratio. 0 0 81,000 0 Year 2 $ 11,341 24,155 3,560 158,916 Debt Ratio Denominator: 67,380 194,6141 48,564 40,174 143,178 = Debt Ratio Debt ratio
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.
Rahul
![[The following information applies to the questions displayed below.]
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 and
Year 2.
December 31
Cash
Accounts receivable
office supplies
office equipment
Trucks
Building
Land
Accounts payable
Note payable
Numerator:
Year 1
$ 56,760
30,810
4,860
1
1
149,190
58,380
3. Compute the Year 2 year-end debt ratio.
0
0
81,000
0
Year 2
$ 11,341
24,155
3,560
158,916
Debt Ratio
Denominator:
67,380
194,6141
48,564
40,174
143,178
=
Debt Ratio
Debt ratio](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1fc83afb-cff6-4943-9817-025678bf8fce%2F26f10466-d56c-4bf2-93cf-6e4e9cbacc5d%2F6z6iz85_processed.jpeg&w=3840&q=75)
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