3. Burneside Corp.'s accounts receivable subsidiary ledger shows the following information: Customer Arden, Inc. Lakeside Co. Moraine Corp. Budapest Co. Brno Co. Napa Corp. Account Balance Dec 31, 2018 P35, 180 20,920 30, 600 45, 140 31, 600 17,400 Age of Accounts 0-30 days 31-60 days Date 12/06/18 61-90 days 91-120 days Over 120 days 11/29/18 09/27/18 08/20/18 12/08/18 10/25/18 11/17/18 10/09/18 12/12/18 12/02/18 09/12/18 Invoice Rate 1% 1.5% 3% 10% 50% Amount P14,000 21,180 12,000 8,920 20,000 10, 600 The lifetime expected credit loss rates below are based on Burneside Corp's receivable collection experience, adjusted for forward-looking estimates. 23,140 22,000 19, 200 12,400 17,400 The allowance for credit loss account had a debit balance of P5,500 on December 31, 2018, before adjustment. a. Prepare the aging schedule of report of Burneside Corp.
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.
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