What amount should be reported as “trade accounts receivable” on December 31, 2021?
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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.
On December 31, 2021, Omar Company revealed a balance of P 9, 750, 000 in the
1. Accounts receivable known to be worthless
200, 000
2. Trade accounts receivable- assigned (equity in assigned account is P 350,000)
1, 900, 000
3. Advance payments to creditors on purchase orders
600, 000
4. Advance to affiliated companies
1, 500, 000
5. Trade accounts on which postdated checks are held ( no entries were made on receipts of checks)
345, 000
6. Trade accounts receivable from officers, currently due
250, 000
7. Interest receivable on bonds
350, 000
8. Subscription receivable due in 30 days
2, 200, 000
9. Costumer’s accounts reporting credit balances arising from sales returns
700, 000
10. Trade accounts receivables- unassigned
2, 190, 000
11. Trade installment receivable due 1- 18 months, including unearned finance charge Of P 67, 000
775, 000
What amount should be reported as “trade accounts receivable” on December 31, 2021?
a.
5, 000, 000
b.
5, 530, 000
c.
5, 900, 000
d.
5, 393, 000
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