The following is the adjusted trial balance for Henry Company: Henry Company Adjusted Trail Balance For the Year ended December 31,2013 Debits: Credits: Cash 9,235Accounts Receivable (net) 5,160Inventory 2,950Equipment (net) 14,290Accumulated Depreciation 2,500Accounts Payable 2,500Notes Payable 6,000Capital Stock 12,000Retained Earnings 3,000Fees Earned 12,600Wage Expense 2,400Rent Expense 1,200Utilities Expense 800Depreciation Expense 1,250Miscellaneous Expense 175Dividends 1,140 Total 38,600 38,600 Determine the net income (loss) for the period. a. Net income 5,635b. Net loss 1,080c. Net loss 3,550d. Net income 6,775
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 is the adjusted
Henry Company
Adjusted Trail Balance
For the Year ended December 31,2013
Debits: Credits:
Cash 9,235
Inventory 2,950
Equipment (net) 14,290
Accounts Payable 2,500
Notes Payable 6,000
Capital Stock 12,000
Fees Earned 12,600
Wage Expense 2,400
Rent Expense 1,200
Utilities Expense 800
Depreciation Expense 1,250
Miscellaneous Expense 175
Dividends 1,140
Total 38,600 38,600
Determine the net income (loss) for the period.
a. Net income 5,635
b. Net loss 1,080
c. Net loss 3,550
d. Net income 6,775
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
