The following is the trial balance of Swifty Corporation at December 31, 2020. SWIFTY CORPORATION TRIAL BALANCE DECEMBER 31, 2020 Debits Credits Purchase Discounts $33,000 Cash $626,010 Accounts Receivable 346,500 Rent Revenue 59,400 Retained Earnings 528,000 Salaries and Wages Payable 59,400 Sales Revenue 3,630,000 Notes Receivable 363,000 Accounts Payable 161,700 Accumulated Depreciation—Equipment 92,400 Sales Discounts 47,850 Sales Returns and Allowances 57,750 Notes Payable 231,000 Selling Expenses 765,600 Administrative Expenses 326,700 Common Stock 990,000 Income Tax Expense 177,870 Cash Dividends 148,500 Allowance for Doubtful Accounts 16,500 Supplies 46,200 Freight-in 66,000 Land 231,000 Equipment 462,000 Bonds Payable 330,000 Gain on Sale of Land 99,000 Accumulated Depreciation—Buildings 64,680 Inventory 293,700 Buildings 323,400 Purchases 2,013,000 Totals $6,295,080 $6,295,080 A physical count of inventory on December 31 resulted in an inventory amount of $211,200; thus, cost of goods sold for 2020 is $2,128,500.
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
|
SWIFTY CORPORATION |
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|
Debits |
Credits |
|||||
| Purchase Discounts |
$33,000 |
|||||
| Cash |
$626,010 |
|||||
| Accounts Receivable |
346,500 |
|||||
| Rent Revenue |
59,400 |
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| Retained Earnings |
528,000 |
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| Salaries and Wages Payable |
59,400 |
|||||
| Sales Revenue |
3,630,000 |
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| Notes Receivable |
363,000 |
|||||
| Accounts Payable |
161,700 |
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|
92,400 |
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| Sales Discounts |
47,850 |
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| Sales Returns and Allowances |
57,750 |
|||||
| Notes Payable |
231,000 |
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| Selling Expenses |
765,600 |
|||||
| Administrative Expenses |
326,700 |
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| Common Stock |
990,000 |
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| Income Tax Expense |
177,870 |
|||||
| Cash Dividends |
148,500 |
|||||
| Allowance for Doubtful Accounts |
16,500 |
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| Supplies |
46,200 |
|||||
| Freight-in |
66,000 |
|||||
| Land |
231,000 |
|||||
| Equipment |
462,000 |
|||||
| Bonds Payable |
330,000 |
|||||
| Gain on Sale of Land |
99,000 |
|||||
| Accumulated Depreciation—Buildings |
64,680 |
|||||
| Inventory |
293,700 |
|||||
| Buildings |
323,400 |
|||||
| Purchases |
2,013,000 |
|||||
| Totals |
$6,295,080 |
$6,295,080 |
A physical count of inventory on December 31 resulted in an inventory amount of $211,200; thus, cost of goods sold for 2020 is $2,128,500.
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