Trading Company prepared an aging of its accounts receivable on December 31, 2020and determined that the net realizable value of the Accounts Receivable was P2,500,000. Additional data is available as follows: •Allowance for bad debts, January 1 P 280,000 •Accounts written off as uncollectible 230,000• Accounts receivable, December 31 2,700,000 •Uncollectible accounts recovery 50,000 For the year ended December 31, 2017, what was the bad debts expense?
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.
Trading Company prepared an aging of its
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