THE ACCOUNTING EXCHANGE.
The article presents an accounting problem calling for a financial statement showing changes in working capital. It contains certain balance sheet items. The reserve for bad debts applies to 80-day accounts receivable. An addition of $8,000.00 was made to the reserve in 1928 through charges to profit and loss while $189.67 was credited to the reserve during the year, representing accounts collected but charged off in previous years. A total of $125,432.65 has been collected on balances of customers' accounts outstanding at the beginning of the year. The reserve for inventory losses at the end of 1927 was set up in anticipation of subsequent losses on finished goods which proved to be $9,675.22. The latter amount represents the excess of the lower of cost or market at December 31, 1927, over prices actually received upon sale in 1928, and has been included as an extraordinary loss in the profit and loss statement of 1928. A sum of $20,000.00 was added to the reserve at the end of 1928 for similar reasons.
- DOI
- 10.2308/tar-8596327
- Volume
- 4 (2)
- Pages
- 131-135
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref