PROBLEM B. The following information is excerpts from the Financial Statements of ABC Corporation: 2013 2014 2015 Accounts Receivable P 90,000.00 85,000.00 80,000.00 Inventory 90,000.00 100,000.00 80,000.00 Current Assets 260,000.00 280,000.00 240,000.00 Total Assets 1,450,000.00 1,500,000.00 1,400,000.00 Current Liabilities 100,000.00 160,000.00 140,000.00 Cash Sales 900,000.00 840,000.00 800,000.00 Credit Sales 2,620,500.00 2,500,000.00 2,400,000.00 Cost of Sales 0,000.00 648,000.00 620,000.00
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.
1. What is the Acid test ratio for 2014?
2. What is the cash ratio for 2013?
3. What is the
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