ZABEL COMPANY Balance Sheet December 31, 20Y4 Assets Current assets: Cash $76,000 Notes receivable $117,500 Less interest receivable 9,300 108,200 Account receivable $477,000 Plus allowance for doubtful accounts 21,750 498,750 Prepare a corrected partial balance sheet for Zabel Company.
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.
eceivables in the
The following partial balance sheet contains errors.
| ZABEL COMPANY Balance Sheet December 31, 20Y4 |
|||
| Assets | |||
| Current assets: | |||
| Cash | $76,000 | ||
| Notes receivable | $117,500 | ||
| Less interest receivable | 9,300 | 108,200 | |
| $477,000 | |||
| Plus allowance for doubtful accounts | 21,750 | 498,750 |
Prepare a corrected partial balance sheet for Zabel Company.
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