Receivables on the Balance Sheet Identify any errors in the following partial balance sheet. Napa Vino Company Balance Sheet December 31, 20Y6 Assets Current assets: Cash $78,500 Notes receivable $300,000 Interest receivable (4,500) Notes receivable, net 295,500 Accounts receivable $1,200,000 Allowance for doubtful accounts 11,500 Accounts receivable, net 1,211,500 The interest receivable should be . The allowance for doubtful accounts should be .
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.
Receivables on the Balance Sheet
Identify any errors in the following partial balance sheet.
| Napa Vino Company Balance Sheet December 31, 20Y6 |
|||
| Assets | |||
| Current assets: | |||
| Cash | $78,500 | ||
| Notes receivable | $300,000 | ||
| Interest receivable | (4,500) | ||
| Notes receivable, net | 295,500 | ||
| Accounts receivable | $1,200,000 | ||
| Allowance for doubtful accounts | 11,500 | ||
| Accounts receivable, net | 1,211,500 |
The interest receivable should be . The allowance for doubtful accounts should be .
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