On Jan. 01, 2021 Ricca Company’s accounts receivable balance is P75,000. On Jan. 13, the company sold items on credit worth P30,000 to Mr. Yuri. On Jan. 26, she has another sales worth P45,000 where 60% is on cash. On Jan. 27, he collected P12,500 from Mr. Yuri and another P5,000 the following day, Jan. 28. The related allowance for doubtful accounts has a balance of P6,000. Compute the carrying amount of accounts receivable of Ricca 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.
On Jan. 01, 2021 Ricca Company’s
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