том STATEMENT OF FINANCIAL POSITION 30-Jun-20 ASSETS Current Assets Cash P 48,600.00 Accounts Receivable P 60,000.00 Allowance for doubtful accounts 3,600.00 56,400.00 Merchandise Inventory Supplies Inventory 64,200.00 4,800.00 Total Current Assets 174,000.00 Property and Equipment Furniture and fixtures P 36,000.00 Less: Accumulated Depreciation 16,800.00 19,200.00 TOTAL ASSETS 193,200.00 LIABILITIES AND CAPITAL Current Liabilities P 24,000.00 Accounts Payable Notes Payable 48,000.00 Total Current Liabilities 72,000.00 Capital Tom, Capital 121,200.00 TOTAL LIABILITIES AND CAPITAL 193,200.00
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.
Hi, below are the things that need to be adjusted in Tom and Jerry's business. Please apply the adjustments in the statement of financial position. Just before the partnership formation, the financial position of Tom’s and Jerry’s businesses are in the pictures attached.
Tom’s business:
- Bad accounts of P3,000 are to be written off. A 4% allowance for doubtful accounts is to be recognized on the remaining
accounts receivable after write off. - Merchandise inventory ‘s present market value is P70,800
- Furniture’s and Fixtures account should be adjusted to replacement value of P45,000. After adjustment to replacement value, the asset should be considered as 50%
depreciated .
Jerry’s business:
- Only 10% allowance for doubtful accounts is to be recognized on the outstanding accounts receivable as of June 30, 2020.
- The office equipment should be depreciated further by 8%
- The fair market value of the merchandise is P46,450.
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