Designer Dry cleaning showed the following information for its first and second months just ended, March and April of 2020: April 30, March 31, Account Title 2020 2020 Cash 7,000 3,500 12,000 76,000 3,000 Cleaning supplies Prepaid rent Equipment Accounts payable Notes payable Christopher Dior, capital* 900 16,000 30,000 500 700 40,000 15,000 *Christopher Dior made a $10,000 investment during March and had withdrawals of $1,000 in March and $25,100 in April. Required: Use the information provided to complete a statement of changes in equity and a balance sheet for each of March and April 2020. DESIGNER DRYCLEANING Statement of Changes in Equity For Months Ended April 30, 2020 March 31, 2020 Christopher Dior, capital, beginning Total
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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