Moose Corporation had a 1/1/15 balance in the Allowance for Doubtful Accounts of P 12,000. During 2015, it wrote of P 8,640 of accounts and collected P 2,520 on accounts previously written off. The balance in Accounts Receivable was P 240,000 at 1/1 and P 288,000 at 12/31. At 12/31/15, Black estimates that 5% of accounts receivable will prove to be uncollectible. What should Moose Corporation report as its Allowance for Doubtful Accounts at 12/31/15?
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.
Moose Corporation had a 1/1/15 balance in the Allowance for Doubtful Accounts of P 12,000. During 2015, it wrote of P 8,640 of accounts and collected P 2,520 on accounts previously written off. The balance in
What should Moose Corporation report as its Allowance for Doubtful Accounts at 12/31/15?
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