PROBLEM 1
Credible Company provided the following T-account summarizing the transactions
affecting the accounts receivable for the current year:
Jan. 1 balance
Charge sales
Shareholder’ subscriptions
Deposit on contract
Claims against common
carrier for damages
IOUs from employees
Cash advance to affiliates
Advances to a supplier
Accounts Receivable
600,000 Collections from customers
6,000,000 Writeoff
200,000 Merchandise returns
120,000 Allowances to customer
for shipping damages
100,000 Collections on carrier claims
10,000 Collection on subscriptions
100,000
50,000
5,300,000
35,000
40,000
25,000
40,000
50,000
Required:
1. Compute the correct amount of accounts receivable.
2. Compute the amount to be presented as “trade and other receivables” under current assets.
PROBLEM 2
Jinx Company provided the following information for the current year in relation to accounts receivable:
Accounts receivable, January 1
1,300,000
Credit sales
5,500,000
Sales return
150,000
Accounts written off
100,000
Collections from customers
5,000,000
Estimated future sales return on December 31
50,000
Estimated uncollectible accounts per aging at year-end
250,000
What amount should be reported as net realizable value of accounts receivable on December 31?
PROBLEM 3
Von Company provided the following data for the current year in relation to accounts receivable:
Debits
January 1 balance after deducting credit balance P30,000
Charge sales
Charge for goods out on consignment
Shareholders’ subscriptions
Accounts written off but recovered
Cash paid to customer for January 1 credit balance
Goods shipped to cover January 1 credit balance
Deposit on long-term contract
Claim against common carrier
Advances to supplier
Credits
Collections from customers, including overpayment of P50,000
Writeoff
Merchandise returns
Allowances to customers for shipping damages
Collection on carrier claim
Collection on subscription
530,000
5,250,000
50,000
1,000,000
10,000
25,000
5,000
500,000
400,000
300,000
5,200,000
35,000
25,000
15,000
50,000
200,000
What amount should be reported as accounts receivable on December 31?
What total amount of trade and other receivables should be reported under current assets?
What total amount of other receivables should be reported under noncurrent assets?
PROBLEM 4
Affectionate Company sold merchandise on account for P500,000. The terms are 3/10, n/30. The
related freight charge amounted to P10,000. The account was collected within the discount period. 1
Required:
Prepare journal entries to record the transactions under the following freight terms:
1. FOB destination and freight collect
2. FOB destination and freight prepaid
3. FOB shipping point and freight collect
4. FOB shipping point and freight prepaid
PROBLEM 5
At the beginning of current year, Relentless Company reported the following balances:
Accounts receivable
600,000
Allowance for doubtful accounts
25,000
The following transactions took place in the current year.
1. Sales - cash and credit
2. Cash received from credit customers
3. Cash received from credit customers who took advantage of the 3/10, n / 30 credit terms (included
in No. 2)
4. Accounts receivable written off as worthless
5. Cash received from cash customers
6. Credit memo for sales return and allowances issued to credit customers
7. Cash refunds to cash customers
8. Recoveries of accounts written off, not included in above collections
3,070,000
2,455,000
1,455,000
20,000
470,000
55,000
10,000
5,000
Required:
a. Prepare journal entries to record the transactions.
b. Prepare the adjustment for doubtful accounts if the entity provides for doubtful accounts equal to 2% of net credit sales.
c. Determine the net realizable value of accounts receivable at year-end?
PROBLEM 6
At the beginning of current year, Rampant Company reported that the allowance for doubtful accounts has a credit balance of P170,000.
Bad debt recoveries and bad- debts written off in the current year were P30,000 and P235,000, respectively.
The allowance account had been previously calculated as a percentage of net sales.
It was decided however to provide for doubtful accounts commencing with the year-end adjusting entry on the basis of an analysis of the
age of the receivables.
The following schedule was prepared.
Percent
uncollectible
Not yet due
1,700,000
NIL
1-30 days past due
1,200,000
5
31-60 days past due
100,000
25
61-90 days past due
Over 90 days past due
Additional accounts to be written off
150,000
120,000
30,000
50
100
Required:
1. What is the required allowance for doubtful accounts at year-end?
2. How much would be the doubtful accounts expense for the current year?
3. What is the adjusting entry for the doubtful accounts expense for the current year?
4. What is the net realizable value of accounts receivable at year-end?
PROBLEM 7
Sky Company provided the following information at year-end:
2020
Accounts receivable
880,000
Allowance for doubtful accounts
-10,000
Allowance for sales returns
-20,000
Net realizable value
850,000
2019
800,000
-15,000
-25,000
760,000
The entity reported doubtful accounts expense in 2020 of P30,000 and had products returned for
credits totaling P15,000 at sale price. Gross sales for 2020 amounted to P6,150,000.
What amount of accounts receivable was written during 2020?
What amount was collected from customers during 2020?
What amount was recorded as estimated sales returns during 2020?