As of November 3, 2013, Krispy Kreme Doughnutshad $530,000 of Notes Receivable due within one year,$28,650,000 of Accounts Receivable, and $600,000 inits Allowance for Doubtful Accounts (assume all relatedto accounts receivable). How should these accounts bereported on a balance sheet prepared following GAAP?
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.
As of November 3, 2013, Krispy Kreme Doughnuts
had $530,000 of Notes Receivable due within one year,
$28,650,000 of
its Allowance for Doubtful Accounts (assume all related
to accounts receivable). How should these accounts be
reported on a balance sheet prepared following GAAP?
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