Valiant Company reported the following analysis of curren receivables at year-end. Trade accounts receivable 2,000,000 Allowance for doubtful accounts - 100,000 Claim against shipper for goods lost in transit in November 300,000 Selling price of unsold goods sent by Valiant on consignment at 150% of cost and not included in ending inventory 600,000 Security deposit on lease of warehouse 200,000 Total 3,000,000 What total amount should be reported as current trade and other receivable? PLEASE SHOW YOUR COMPUTATION
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.
| Valiant Company reported the following analysis of curren receivables | ||||||
| at year-end. | ||||||
| Trade |
2,000,000 | |||||
| Allowance for doubtful accounts | - 100,000 | |||||
| Claim against shipper for goods lost in transit in November | 300,000 | |||||
| Selling price of unsold goods sent by Valiant on consignment | ||||||
| at 150% of cost and not included in ending inventory | 600,000 | |||||
| Security deposit on lease of warehouse | 200,000 | |||||
| Total | 3,000,000 | |||||
| What total amount should be reported as current trade and | ||||||
| other receivable? PLEASE SHOW YOUR COMPUTATION. |
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