What is the Accounts receivable balance at the end of 20x1? What should be the balance of the allowance for credit losses account at the end of 20x1? What is the credit loss that should be recognized in 20x1? What is the adjusting entry to record the estimated credit loss on December 31, 20x17 What is the net realizable value of the Accounts receivable at Decembe
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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.
1 The CVM Corporation was organized in 20x1. In the same year, CVM had a total revenue of P250,000 Records showed P200,000 of this was collected during the year Based on the percentage of collections in the past the CVM estimates 10% of the accounts may prove uncollectible, The of the Allowance for credit losses account before making adjustments is P2,000.
Required:
What is the
What should be the balance of the allowance for credit losses account at the end of 20x1?
What is the credit loss that should be recognized in 20x1?
What is the
What is the net realizable value of the Accounts receivable at December 31, 20x1?
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