Required: determine the VAT amounts to pay.
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.
The following are some information for Sham Co. for 7/2016: VAT: 16%, All transactions were paid in cash:
1. Sales amounts in 7/2013 were 400,000 NIS including VAT.
2. Purchase amounts in 7/2013 were 300,000 NIS not include VAT.
3. Return sales amounts in 7/2013 were 10,000 NIS including VAT.
4.
1. Required: determine the VAT amounts to pay.
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