) DEF Company has the following data relating to accounts receivable for the year ended December 31, 2022: Accounts receivable, January 1, 2022 P 480,000 Allowance for doubtful accounts, 1/1/22 28,600 Cash sales 300,000 Sales on account, terms: 2/10, 1/15, n/30 2,560,000 Cash received from customers during the year 2,400,000 Accounts written off during the year 17,600 Cash refunds given to cash customers for sales returns and allowances 15,000 Credit memoranda issued to credit customers for sales returns and allowances 25,000 The P2,400,000 collection is composed of the following: Collection from customers availing the 10-day discount period: Gross selling price P 1,440,000 Discount taken (1,440,000 x 2%) (28,000) P 1,411,200 Collection from customers availing the 15-day discount period: Gross selling price 800,000 Discount taken (800,000 x 1%) ( 8,000) 792,000 Collection from customers paying beyond the discount perio
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.
10) DEF Company has the following data relating to accounts receivable for the year ended December 31, 2022:
Accounts receivable, January 1, 2022 P 480,000
Allowance for doubtful accounts, 1/1/22 28,600
Cash sales 300,000
Sales on account, terms: 2/10, 1/15, n/30 2,560,000
Cash received from customers during the year 2,400,000
Accounts written off during the year 17,600
Cash refunds given to cash customers for sales returns and allowances 15,000
Credit memoranda issued to credit customers for sales returns and allowances 25,000
The P2,400,000 collection is composed of the following:
Collection from customers availing the 10-day discount period:
Gross selling price P 1,440,000
Discount taken (1,440,000 x 2%) (28,000) P 1,411,200
Collection from customers availing the 15-day discount period:
Gross selling price 800,000
Discount taken (800,000 x 1%) ( 8,000) 792,000
Collection from customers paying beyond the discount period: 192,000
Collection of accounts previously written and subsequent recovered 4,800
Total collection of accounts receivable for 2022 P 2,400,000
DEF Company year-end balance of allowance for doubtful accounts was estimated to be 5% of the outstanding accounts receivable as at December 31, 2022.
- How much was DEF Company's doubtful accounts expense for the year ended December 31, 2022?
- The allowance for doubtful accounts as of December 31, 2022 is?
- What was the balance of the accounts receivable as at December 31, 2022?
- What is the net realizable value of accounts receivable?
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