EX 9-25 Receivables on the balance sheet

List any errors you can find in the following partial balance sheet:

Tulips Company 
Balance Sheet 
December 31, 2012 
Assets
Current assets: 
Cash                                                                                            $138,000 
Notes receivable                                            $400,000 
Less interest receivable                                     20,000                380,000 
Accounts receivable                                      $795,000 
Plus allowance for doubtful accounts               14,500                809,500

Answer:
1. The interest receivable should be reported separately as a current asset. It should not be deducted from notes receivable.

2. The allowance for doubtful accounts should be deducted from accounts receivable.
 A corrected partial balance sheet would be as follows:

TULIPS COMPANY 
Balance Sheet 
December 31, 2012  
Assets 
Current assets:   
Cash............................................................................                             $138,000   
Notes receivable........................................................                                400,000   
Accounts receivable.................................................. $795,000    
Less allowance for doubtful accounts...............            14,500                 780,500   
Interest receivable.....................................................                                  20,000 

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