The following information about ABC Company is available at December 31, 2020: Employee income taxes withheld 1,000,000 Cash balance at BPI 10,000,000 Cash overdraft at BDO 1,500,000 Accounts receivable with credit balance 2,000,000 Estimated expenses of meeting warranties on merchandise previously sold 3,000,000 Estimated damages as a result of unsatisfactory performance on a contract 4,000,000 Accounts payable 8,000,000 Deferred serial bonds, issued at par and bearing interest at 12%, payable in semiannual installments of P500,000 due April 1 and October 1 of each year, the first bond to be paid on April 1, 2022. Interest is also paid semiannually. Interest accrued is not yet recorded 5,000,000 Stock dividend payable 2,000,000 The December 31, 2020 balance sheet should report current liabilities at Group of answer choices 20,500,000 19,650,000 20,650,000 19,500,000
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 information about ABC Company is available at December 31, 2020:
Employee income taxes withheld 1,000,000
Cash balance at BPI 10,000,000
Cash overdraft at BDO 1,500,000
Estimated expenses of meeting warranties on
merchandise previously sold 3,000,000
Estimated damages as a result of unsatisfactory
performance on a contract 4,000,000
Accounts payable 8,000,000
Deferred serial bonds, issued at par and bearing interest
at 12%, payable in semiannual installments of P500,000
due April 1 and October 1 of each year, the first bond to
be paid on April 1, 2022. Interest is also paid semiannually.
Interest accrued is not yet recorded 5,000,000
Stock dividend payable 2,000,000
The December 31, 2020
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