BTS Company has the following data relating to accounts receivable for the year ended December 31, 2020:
Question:
BTS Company has the following data relating to accounts receivable for the year ended December 31, 2020:
•Accounts Receivable, January 1- P325,000
•Allowance for Bad Debts, January 1- P18,400
•Sales during the year, all on account, terms: 5/10, 3/15, n/30- P2,800,000
•Cash received from customers during the year- P2,260,000
•Accounts written off during the year- P17,500
•Sales returns and allowances- P14,280
An analysis of cash received from customers during the year revealed that P1,140,000 was received from customers availing the 10-day discount period, P873,000 was received from customers availing the 15-day discount period, P12,000 represented recovery of accounts written off, and the balance was received from customers paying beyond the discount period.
BTS Company's year-end balance of allowance for bad debts was estimated to be 5% of the outstanding accounts receivable as of December 31, 2020, based on the aging of the accounts. How much is the amortized cost on December 31, 2020?
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon