DE LA SALLE UNIVERSITY
FINANCIAL ACCOUNTING AND REPORTING PART 1
UNIT 3 – (ACYFAR1 K39 – BINALUYO CLASS ILLUSTRATION OF ACCOUNTING FOR ACCOUNTS
RECEIVABLE)
Living Company has four operating segments, one segment is into wholesaling of groceries, other segment deals
in the trading of household equipment and office equipment, the other segment is into servicing. The other
segment is into car rental. The following items were taken from the books of the different segments pertaining to
their Receivables as of December 31, 2023:
Arising from rental of cars
P420,000
Claim from insurance for damage rental cars
370,000
Arising from sale of old cars
330,000
Arising from the accrual of interests on above receivables
280,000
Arising from sale of groceries
600,000
Arising from sale of old grocery store equipment
600,000
Arising from sale of household and office equipment
580,000
Arising from sale of service
450,000
Arising from sale of old service equipment used in servicing segment
500,000
Arising from employee advances
150,000
1. In the consolidated December 31, 2023 statement of financial position what total amount of trade receivables
should Living Company report?
a. P2,050,000
b. P2,380,000
c. P2,880,000
d. P3,480,000
Hollywood Company had the following transaction related to its accounts receivable during 2023:
Accounts receivable, beginning balance
P2,700,000
Allowance for bad debts, beginning
33,750
Sales on account made to customers
2,930,000
Collection of accounts from credit customers
4,350,000
Sales discounts granted
50,000
Accounts written off as uncollectible
80,000
Accounts recovered during the year
15,000
The following was prepared from an aging of accounts receivable outstanding on December 31, 2023:
Number of days outs.
% of the ending balance
% uncollectible
0 - 30 days
50%
2%
31 - 60 days
30%
5%
Over 60 days
20%
15%
2. What is the balance of accounts receivable as of December 31, 2022?
a. P1,990,000
b. P1,585,000
c. P1,570,000
d. P1,555,000
e. no answer
3. How much is the balance of allowance for bad debts as of December 31, 2022?
a. P76,250
b. P82,350
c. P84,450
d. P86,350
e. no answer
4. How much is the amount of bad debts expense in 2022?
b. P117,600
b. P132,600
c. P147,600
e. no answer
d. P152,600
The following is the summary of transactions of Johnson Company 2023:
Accounts receivable, beginning – net of P23,450 beginning allowance
Credit sales
Total collections from customers during the year
Accounts written off as uncollectible
Recovery of accounts previously written off
Days past invoice date at December 31
0 – 30
31 – 90
91 – 180
Over 180
P750,000
6,200,000
5,550,000
90,000
35,000
700,000
320,000
210,000
?
The company’s policy to provide allowance on its account receivable at year end as follows: 0-30 days –
1%; 31-90 days – 4%; 91-180 days – 8%; and over 180 days – 15%.
5. How much is the balance of allowance for bad debts as of December 31, 2023?
a. P52,738
b. P53,850
c. P57,368
d. P58,150
6. How much is the amount of bad debts expense in 2023?
a. P66,400
b. P84,288
c. P89,700
d. P88,918