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IA VOL 1 Valix Peralta Valix 2020 Edition
Financial Accounting And Reporting (Negros Oriental State University)
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SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition
CHAPTER 1
PROBLEM 1-1 (IAA) - ​ALBANIA COMPANY
Requirement 1 - Adjusting Entries
a.) Accounts Receivable
Cash in Bank
200 000
b.) Cash in Bank
Accounts Payable
250 000
c.) Cash in Bank
Accounts Payable
100 000
d.) Accounts Receivable
Cash in Bank
450 000
200 000
250 000
100 000
450 000
Requirement 2 - Total Cash and Cash Equivalents
Cash in Bank
Customer Check Outstanding
Undelivered Check Jan. 15
Postdated Check Delivered Jan. 31
Collection on Jan. 15
Adjusted Cash in Bank
Time Deposit - 30 days
Petty Cash Fund
Total Cash and Cash Equivalents
​ ,000,000
3
( 200,000)
250,000
100,000
(​ 450,000​)
2,700,000
1,000,000
​ 20,000
​3,720,000
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PROBLEM 1-2 (IAA) - ​ARGENTINA COMPANY
Requirement 1 - Adjusting Entries
a.) Accounts Receivable
Cash on Hand
150 000
150 000
b.) Expenses
Receivable from Employees
Petty Cash Fund
10 000
5 000
15 000
Requirement 2 - Total Cash and Cash Equivalents
Cash on Hand
Postdated Customer Check
Adjusted Cash on Hand
​ ,000,000
1
(​ 150,000​)
​850,000
Petty Cash Fund
Unreplenished Petty Cash Expenses
Postdated Employee Check
Adjusted Petty Cash Fund
Cash on Hand
Petty Cash Fund
Security Bank - Current Account
PNB - Current Account
Bond Sinking Fund
Total Cash and Cash Equivalents
50,000
(10,000)
(​ 5,000​)
​35,000
850,000
35,000
2,000,000
1,500,000
​ 2,500,000
​6,885,000
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PROBLEM 1-3 (IAA) - ​ARMENIA COMPANY
Requirement 1 - Adjusting Entries
a.) Accounts Receivable
Cash on Hand
100 000
b.) Accounts Receivable
Cash on Hand
150 000
c.) Receivable from Employees
Cash Short or Over
Petty Cash Fund
10 000
5 000
d.) Cash in Bank
Accounts Payable
200 000
e.) Cash in Bank
Accounts Payable
300 000
100 000
150 000
15 000
200 000
300 000
Requirement 2 - Total Cash
Cash on Hand
NSF Customer Check Jan. 5
Postdated Customer Check
Adjusted Cash on Hand
​ ,000,000
1
( 100,000)
(​ 150,000​)
​750,000
Petty Cash Fund
Receivable from Employees
Cash Shortage
Adjusted Petty Cash Fund
50,000
(10,000)
(​ 5,000​)
​35,000
Cash in Bank
Undelivered Company Check Jan. 5
Postdated Check Delivered Jan. 31
Adjusted Cash in Bank
4,000,000
200,000
​ 300,000
​4,500,000
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Cash on Hand
Petty Cash Fund
Cash in Bank
Savings Deposit
Total Cash
750,000
35,000
4,500,000
​2,000,000
​7,285,000
PROBLEM 1-4 (PHILCPA) - ​CALLOUS COMPANY
Requirement 1 - Total Cash and Cash Equivalents
Cash on Hand
NSF Customer Check Jan. 5
Postdated Customer Check
Adjusted Cash on Hand
Petty Cash Fund
Currency and Coins
​ 00,000
2
( 35,000)
(​ 15,000​)
​150,000
​ 5,000
Cash in Bank - Philippine Bank
Philippine Bank - Current Account
Undelivered Company Check
Postdated Check Delivered
Adjusted Cash in Bank
Cash on Hand
Petty Cash Fund
Philippine Bank - Current Account
City Bank - Current Account #1
City Bank - Current Account #2
Asia Bank Saving Deposit
Asia Bank Time Deposit
Total Cash and Cash Equivalent
5,000,000
25,000
​ 45,000
​5,070,000
150,000
5,000
5,070,000
4,000,000
( 100,000)
250,000
​ 2,000,000
​ 11,375,000
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Requirement 2 - Adjusting Entries
a.) Accounts Receivable
Cash on Hand
50 000
b.) Receivable from Officer
Expenses
Cash Short or Over
Petty Cash Fund
2 000
12 000
1 000
c.) Cash in Bank - Philippine Bank
Accounts Payable
70 000
50 000
15 000
70 000
d.) Cash in Bank - City Bank
Bank Overdraft
100 000
100 000
Problem 1-5 (ACP) - ​ZEALOUS COMPANY
​Fluctuating Fund System
Imprest Fund System
a.) Petty Cash Fund
Cash in Bank
10 000
10 000
b.) No Entry
c.) Petty Cash Fund
Postage
Supplies
Transportation
Misc. Expense
Cash in Bank
a.) Petty Cash Fund
Cash in Bank
b.) Postage
Supplies
Transportation
Misc. Expense
Petty Cash Fund
5 000
1 500
5 500
1 200
800
14 000
c.) Petty Cash Fund
Cash in Bank
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10 000
10 000
1 500
5 500
1 200
800
9 000
14 000
14 000
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Problem 1-6 (ACP) - ​ZENITH COMPANY
​Fluctuating Fund System
Imprest Fund System
a.) Petty Cash Fund
Cash in Bank
10 000
10 000
b.) No Entry
c.) No Entry
d.) Petty Cash Fund
Postage
Supplies
Transportation
Accounts Payable
Cash in Bank
10 000
1 500
3 000
1 000
3 500
19 000
a.) Petty Cash Fund
Cash in Bank
10 000
10 000
b.) Postage
Supplies
Petty Cash Fund
1 500
3 000
b.) Transportation
Accounts Payable
Petty Cash Fund
1 000
3 500
c.) Petty Cash Fund
Cash in Bank
4 500
4 500
19 000
19 000
Problem 1-7 (IAA) - ​LABORIOUS COMPANY
Fluctuating Fund System
Imprest Fund System
5/2​ ​ Petty Cash Fund
10 000
Cash in Bank
5/29​ Postage
Supplies
Transportation
Misc. Expense
Cash in Bank
6/30​ Supplies
Postage
Transportation
Petty Cash Fund
7/1​ Petty Cash Fund
Supplies
Postage
Transportation
10 000
5/2​ ​ Petty Cash Fund
Cash in Bank
5/29​ Postage
1 000
3 000
2 500
1 500
8 000
Supplies
Transportation
Misc. Expense
Petty Cash Fund
Petty Cash Fund
Cash in Bank
2 000
1 000
1 000
4 000
4 000
2 000
1 000
1 000
6/30​ Supplies
Postage
Transportation
Petty Cash Fund
7/1​ No Entry
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10 000
10 000
1 000
3 000
2 500
1 500
8 000
8 000
8 000
2 000
1 000
1 000
4 000
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7/15​ Petty Cash Fund
Supplies
Postage
Transportation
Misc. Expense
Cash in Bank
5 000
3 500
1 500
1 500
500
7/15​ Supplies
Postage
Transportation
Misc. Expense
Cash in Bank
1 500
500
500
500
3 000
12 000
Petty Cash Fund
Cash in Bank
PROBLEM 1-8 (IAA) - ​TACIT COMPANY
11/2​ Petty Cash Fund
10 000
11/30​ Postage
2 000
5 000
10 000
Cash in Bank
10 000
Supplies
Petty Cash Fund
Cash in Bank
17 000
12/31​ Postage
3 000
4 000
2 000
Supplies
Special Deposit
Petty Cash Fund
9 000
1/1
​Petty Cash Fund
1/2
​No Entry (already reversed)
9 000
Postage
Supplies
Special Deposit
3 000
4 000
2 000
1/31 ​ Postage
5 000
6 000
7 000
1 000
Supplies
Accounts Payable
Cash Short or Over
Cash in Bank
19 000
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12 000
12 000
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Problem 1-9 (IAA) - ​WACKY COMPANY
Fluctuating Fund System
Imprest Fund System
12/1​ ​Petty Cash Fund
10 000
12/20​ Selling Expenses
5 000
2 000
2 000
Cash in Bank
Misc. Expenses
Equipment
Cash in Bank
12/31​ Rec. from Employees
Selling Expenses
Transportation
Petty Cash Fund
1/1​
Petty Cash Fund
Rec. from Employees
Selling Expenses
Transportation
10 000
Admin. Expenses
Transportation
Purchases
Cash in Bank
Misc. Expenses
Equipment
Petty Cash Fund
9 000
Petty Cash Fund
Cash in Bank
2 000
1 000
500
4 000
12/31​ Rec. from Employees
Selling Expenses
Transportation
Petty Cash Fund
4 000
2 000
1 000
500
10 000
Cash in Bank
12/20​ Selling Expenses
1/15​ No Entry
1/31​ Selling Expenses
12/1​ ​Petty Cash Fund
1/1​
10 000
5 000
2 000
2 000
9 000
9 000
9 000
2 000
1 000
500
4 000
No Entry
1/15​ Petty Cash Fund
2 000
1/31​ Selling Expenses
500
2 000
1 000
1 200
Rec. from Employees
2 000
2 000
1 500
1 200
6 700
Admin. Expenses
Transportation
Purchases
Cash in Bank
Petty Cash Fund
Cash in Bank
PROBLEM 1-10 (AICPA) - ​TRANVIA COMPANY
Cash in Checking Account
Cash in Money Market Account
Treasury Bill Jan. 31
Total Cash and Cash Equivalents
350,000
750,000
​ 3,500,000
4,600,000 → C.
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2 000
4 700
6 700
6 700
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PROBLEM 1-11 (IAA) - ​AFFABLE COMPANY
Cash in Bank - Demand Deposit Acc.
Cash on Hand
Money Order
Manager Check
Traveler Check
Total Cash
5,000,000
400,000
50,000
100,000
​ 1,000,000
6,550,000 → C.
PROBLEM 1-12 (AICPA) - ​THOR COMPANY
Checkbook Balance
Undelivered Company Check Jan. 15
Adjusted Cash Balance
4,000,000
500,000
4,500,000 → A.
PROBLEM 1-13 (AICPA) - ​JOANA COMPANY
Petty Cash Fund (50,000 -10,000)
Cash on Hand (500,000 -100,000)
Cash in Bank - Current Account
Cash in Bank - Payroll Account
Time Deposit
Cash in Sinking Fund for Bonds Payable
Total Cash and Cash Equivalents
40,000
400,000
4,000,000
1,000,000
2,000,000
​ 1,500,000
8,940,000 → B.
PROBLEM 1-14 (AICPA) - ​LAMENTABLE COMPANY
Cash in Bank (6,000,000 - 400,000)
Petty Cash Fund
Time Deposit
Savings Deposit
Total Cash and Cash Equivalents
5,600,000
50,000
2,500,000
​ 1,000,000
9,150,000 → B.
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PROBLEM 1-15 (AICPA) - ​BALONEY COMPANY
Cash in Bank
Cash on Hand
Total Cash
2,250,000
125,000
2,375,000 → C.
PROBLEM 1-16 (IAA) - ​YASMIN COMPANY
Petty Cash Fund
Current Acc. - First Bank ​(4,000,000 + 100,000)
Treasury Bill Jan. 31
Total Cash and Cash Equivalents
50,000
4,100,000
1,000,000
5,150,000 → B.
PROBLEM 1-17 (IAA) - ​ROMA COMPANY
Undeposited Collections
Cash in Bank - BDO Checking Account
Cash in Bank - BDO Fund for Payroll
Cash in Bank - BDO Time Deposit
Cash in Bank - BDO VAT Account
Total Cash and Cash Equivalents
600,000
4,000,000
1,000,000
2,000,000
​ 450,000
8,050,000 → D.
PROBLEM 1-18 (AICPA) - ​ARUBA COMPANY
Question 1
Checkbook Balance
Postdated Customer Check
NSF Check
Undelivered Company Check
Cash on Hand
Change Fund
Adjusted Cash Balance
8,000,000
(2,000,000)
( 500,000)
1,500,000
400,000
​
40,000
7,440,000 → B.
Question 2
Treasury Bill
Money Market Placement
Total Cash Equivalents
2,500,000
3,000,000
5,500,000 → C.
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PROBLEM 1-19 (IAA) - ​ECSTASY COMPANY
Question 1
Coin, Currency, Savings and Checking Acc.
Total Cash
​ 3,400,000
3,400,000 → A.
Question 2
Government Treasury Bills
Commercial Paper
Total Cash Equivalents
2,000,000
1,500,000
3,500,000 → A.
PROBLEM 1-20 (PHILCPA) - ​MARJORIE COMPANY
Coins and Currency
Accomodation Check
Adjusted Petty Cash Fund Balance
22,000
15,000
37,000 → C.
PROBLEM 1-21 (PHILCPA) - ​ADMIRABLE COMPANY
Coins and Currency
Reimbursement Check
Adjusted Petty Cash Fund Balance
2,000
4,000
6,000 → C.
PROBLEM 1-22 (ACP) - ​LOVE COMPANY
Question 1
Checkbook Balance
Erroneous Customer Check
Undelivered Company Check
Adjusted Cash in Bank
4,000,000
( 200,000)
400,000
4,200,000 → B.
Question 2
Cash in Bank
Cash on Hand
Petty Cash Fund (5,000 + 40,000)
Total Cash
4,200,000
400,000
45,000
4,645,000 → A.
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PROBLEM 1-23 (IAA)
1. D.
2. B.
3. A.
4. B.
5. D.
6. C.
7. B.
8. D.
9. A.
10. C.
PROBLEM 1-24 (IAA)
1.
2.
3.
4.
5.
D.
A.
C.
B.
D.
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PROBLEM 1-25 (IAA)
1.
2.
3.
4.
5.
D.
D.
C.
C.
B.
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SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition
CHAPTER 2
PROBLEM 2-1 (IAA) - ​APATHY COMPANY
Requirement 1 - Adjusted Balance Method
Book Balance
Add: Notes Collected by Bank
Total
Less: Bank Service Charge
Adjusted Book Balance
65,000
30,000
95,000
2,000
93,000
Bank Balance
Add: Deposit in Transit
Total
Less: Outstanding Checks
Check No. 102 15,000
Check No. 105 30,000
Check No. 107 50,000
Adjusted Bank Balance
Requirement 2 - Adjusting Entries
a.) Cash in Bank
Notes Receivable
30 000
b.) Bank Service Charge
Cash in Bank
2 000
30 000
2 000
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108,000
80,000
188,000
95,000
93,000
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PROBLEM 2-2 (IAA) - ​SENSIBLE COMPANY
Requirement 1 - Adjusted Balance Method
Book Balance
Add: Notes Collected by Bank
Total
Less: NSF Check
10,000
Service Charge
5,000
Bank Error
27,000
(52,000-25,000)
Adjusted Book Balance
110,000
45,000
155,000
42,000
113,000
Bank Balance
135,000
Add: Deposit in Transit 60,000
Bank Error
8,000 68,000
Total
203,000
Less: Outstanding Checks
Check No. 770
20,000
Check No. 775
30,000
Check No. 777
40,000 90,000
Adjusted Bank Balance
113,000
Requirement 2 - Adjusting Entries
a.) Cash in Bank
Bank Service Charge
Notes Receivable
45 000
5 000
b.) Accounts Receivable
Cash in Bank
10 000
c.) Bank Service Charge
Cash in Bank
5 000
50 000
10 000
5 000
d.) Accounts Payable
Cash in Bank
27 000
27 000
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PROBLEM 2-3 (IAA) - ​XANTHOUS COMPANY
Requirement 1 - Adjusted Balance Method (Unadjusted & Adjusted)
Book Balance
Add: Notes Collected by Bank
Total
Less: Bank Service Charge
Adjusted Book Balance
2,840,000
270,000
3,110,000
5,000
3,105,000
Book Balance
3,265,000
Add: Notes Collected by Bank
450,000
Total
3,715,000
Less: Outstanding Checks
Check No. 122 180,000
Check No. 124 120,000
Check No. 116
60,000
Check No. 125 250,000
610,000
Adjusted Bank Balance
3,105,000
Requirement 2 - Adjusting Entries
a.) Cash in Bank
Bank Service Charge
Notes Receivable
Interest Revenue
270 000
10 000
b.) Accounts Receivable
Cash in Bank
5 000
250 000
30 000
5 000
PROBLEM 2-4 (IAA) - ​CHIVALRY COMPANY
Requirement 1 - Adjusted Balance Method
Book Balance
Add: Coll. of Note
2,500,000
Int. on Note
150,000
Book Error ​CN#175 45,000
Total
Less: NSF Check
220,000
Service Charge
5,000
Payment for
245,000
Light and Water
Adjusted Book Balance
1,405,000
2,695,000
4,100,000
470,000
Bank Balance
Add: Deposit in Transit
Total
Less: Bank Error
1,100,000
Outstanding 1,650,000
Checks
Adjusted Bank Balance
3,630,000
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5,630,000
750,000
6,380,000
2,750,000
3,630,000
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Requirement 2 - Adjusting Entries
a.) Cash in Bank
Notes Receivable
Interest Income
Accounts Payable
2 695 000
b.) Accounts Receivable
Cash in Bank
220 000
c.) Bank Service Charge
Cash in Bank
5 000
2 500 000
150 000
45 000
220 000
5 000
d.) Light and Water
Cash in Bank
245 000
245 000
PROBLEM 2-5 (IAA) - ​ZODIAC COMPANY
Requirement 1 - Book to Bank Method
Balance per Book - April 30
Credit Memo for Note Collected
Outstanding Checks:
Check No. 1331
Check No. 1332
Check No. 1334
Check No. 1335
Total
Less: NSF Check
Bank Service Charge
Undeposited Collections
Balance per Bank - April 30
1,100,000
60,000
40,000
30,000
60,000
10,000
25,000
5,000
​ 70,000
2
140,000
1,300,000
300,000
1,000,000
Requirement 2 - Adjusting Entries
a.) Cash in Bank
Notes Receivable
60 000
60 000
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b.) Bank Service Charge
Accounts Receivable
Cash in Bank
5 000
25 000
30 000
Requirement 3 - Adjusted Cash in Bank
Balance per Book - April 30
Credit Memo for Note Collected
NSF Check
Bank Service Charge
Adjusted Cash in Bank
1,100,000
60,000
( 25,000)
(​
5,000​)
1,130,000
PROBLEM 2-6 (IAA) - ​RADIANT COMPANY
Requirement 1 - Bank to Book Method
Balance per Bank - January 31
Add: Undeposited Collections
NSF Check
Debit Memo for Safety Deposit
Unrecorded Check
Total
Less: Checks Outstanding
Overstatement of Creditor’s Check
Understatement of Cust. Check
Balance per Book - January 31
3,500,000
550,000
50,000
5,000
125,000 ​
730,000
4,230,000
650,000
270,000
180,000 ​ 1,100,000
3,130,000
Requirement 2 - Adjusting Entries
a.) Cash in Bank
Accounts Payable
Accounts Receivable
450 000
b.) Accounts Receivable
Bank Service Charge
Accounts Payable
Cash in Bank
50 000
5 000
125 000
270 000
180 000
180 000
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Requirement 3 - Adjusted Cash in Bank
Balance per Book - January 31
Overstatement of Creditor’s Check
Understatement of Customer’s Check
Total
NSF Check
Debit Memo for Safety Deposit
Unrecorded Check
Adjusted Book Balance
3,130,000
270,000
180,000
3,580,000
( 50,000)
(
5,000)
(​ 125,000​)
3,400,000
PROBLEM 2-7 (IAA) - ​RANCOR COMPANY
Requirement 1 - Adjusted Balance Method
Balance per Book
Proceeds of Bank Loan
Note Collected by Bank
Service Charge
Book Error
Adjusted Book Balance
2,700,000
940,000
435,000
( 10,000)
(​ 50,000​)
4,015,000
Balance per Bank
Deposit in Transit
Bank Error
Erroneous Bank Charge
Erroneous Debit Memo
Outstanding Checks
Erroneous Bank Credit
Adjusted Bank Balance
Requirement 2 - Adjusting Entries
a.) Cash in Bank
Interest Expense ​(1,000,000 x 12% x 6/12) x 1/6
Prepaid Interest Expense ​(60,000-10,000)
Loan Payable ​(940,000/94%)
940 000
10 000
50 000
b.) Cash in Bank
Bank Service Charge
Notes Receivable
Interest Income
435 000
5 000
c.) Bank Service Charge
Accounts Receivable
Cash in Bank
10 000
50 000
1 000 000
400 000
40 000
60 000
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4,000,000
475,000
90,000
150,000
200,000
( 600,000)
(​ 300,000​)
4,015,000
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PROBLEM 2-8 (IAA) - ​ALPHA COMPANY
Requirement 1 - Adjusted Balance Method
Balance per Book
Proceeds of Bank Loan
Petty Cash Fund
Book Error
Adjusted Book Balance
5,000,000
516,000
( 10,000)
(​ 180,000​)
5,326,000
Balance per Bank
Deposit in Transit
Erroneous Bank Charge
Outstanding Checks
Erroneous Bank Credit
Adjusted Bank Balance
5,500,000
450,000
50,000
( 544,000)
(​ 130,000​)
5,326,000
Requirement 2 - Adjusting Entries
a.) Cash in Bank
Interest Expense ​(600,000 x 14% x 12/12) x 1/12
Prepaid Interest Expense ​(84,000-7,000)
Accounts Payable
Petty Cash Fund
Supplies
Transportation
Postage
Loan Payable ​(516,000/86%)
326 000
7 000
77 000
180 000
4 000
2 000
3 000
1 000
600 000
PROBLEM 2-9 (IAA) - ​PATHETIC COMPANY
Requirement 1 - Adjusted Balance Method
Balance per Book
Book Error
Check No. 555 Stopped
Service Charge
NSF Check
Adjusted Book Balance
1,300,000 Balance per Bank
1,200,000
20,000 Deposit in Transit
275,000
10,000 Outstanding Checks
(
5,000)
Check No. 761
55,000
(​ 85,000​)
Check No. 762
40,000
1,240,000
Check No. 763
25,000
Check No. 764
65,000
Check No. 765
50,000 (​ 235000​)
Adjusted Bank Balance
1,240,000
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Requirement 2 - Adjusting Entries
a.) Cash in Bank
Accounts Payable
Miscellaneous Income
30 000
b.) Accounts Receivable
Cash in Bank
85 000
c.) Bank Service Charge
Cash in Bank
5 000
20 000
10 000
85 000
5 000
d.) Receivable from Cashier
Accounts Receivable
Sales Discounts
40 000
30 000
10 000
PROBLEM 2-10 (AICPA) - ​APEX COMPANY
Balance per Bank
Deposit in Transit
Total
Outstanding Checks
Adjusted Bank Balance
1,805,000
325,000
2,130,000
(​ 275,000​)
1,855,000 → A.
PROBLEM 2-11 (IAA) - ​CORE COMPANY
Balance per Bank
Deposit in Transit
Erroneous Bank Credit
Outstanding Checks (500,000 - 100,000)
Adjusted Bank Balance
2,000,000
200,000
( ​ ​300,000)
(​ 400,000​)
1,500,000 → A.
Balance per Book
NSF Checks (150,000 - 50,00)
Proceeds of Note Collected
Adjusted Book Balance
850,000
( 100,000)
750,000
1,500,000
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PROBLEM 2-12 (AICPA) - ​CASE COMPANY
Balance per Bank
Deposit in Transit
Erroneous Bank Credit
Outstanding Checks
Adjusted Bank Balance
3,800,000
520,000
( ​ ​40,000)
(​ 675,000​)
3,605,000
Unadjusted Book Balance (SQUEEZE)
Bank Service Charge
NSF Check
Adjusted Cash in Bank Balance
3,660,000 → B.
(​
​5,000)
(​
50,000​)
3,605,000
PROBLEM 2-13 (AICPA) - ​ABLE COMPANY
February 28 Book Balance
Note Collected by Bank
Interest Earned on Note
NSF Check
Bank Service Charges (2,000 + 3,000)
Adjusted Book Balance
1,460,000
100,000
10,000
( ​ ​ 130,000)
(​
5,000​)
1,435,000
Balance per Bank (SQUEEZE)
Deposit in Transit
Bank Error - Erroneous Charge
Outstanding Checks
Adjusted Cash in Bank Balance
1,530,000 → B.
85,000
20,000
(​ 200,000​)
1,435,000
PROBLEM 2-14 (IAA) - ​LACONIC COMPANY
Balance per Ledger
Unrecorded Customer Check
Bank Service Charge
NSF Check
Adjusted Book Balance
920,000
35,000
( ​ ​15,000)
(​ 40,000​)
900,000 → A.
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PROBLEM 2-15 (IAA) - ​SAPPHIRE COMPANY
Balance per Bank
Deposit in Transit
Outstanding Checks
Adjusted Bank Balance
2,800,000
350,000
(​ ​ ​ 650,000​)
2,500,000
Balance per Ledger (SQUEEZE)
Interest Income
Service Charge
Book Error (64,000 - 46,000)
Adjusted Book Balance
2,520,000 → B.
10,000
(
12,000)
(​
18,000​)
2,500,000
PROBLEM 2-16 (IAA) - ​ADVERSARY COMPANY
Balance per Book
Note Collected by Bank
Book Error (200,000 - 20,000)
NSF Check
Service Charges
Adjusted Book Balance
8,500,000
950,000
( ​ ​ 180,000)
( ​ ​ 250,000)
(​
20,000​)
9,000,000
Balance per Bank (SQUEEZE)
Deposit in Transit
Outstanding Checks
Adjusted Cash in Bank Balance
8,300,000
1,000,000
(​ 300,000​)
9,000,000 → C.
Cash in Bank
Note Receivable
950 000
Accounts Payable
Accounts Receivable
Service Charge
Cash in Bank
180 000
250 000
20 000
950 000
450 000
Net Debit P500,000​ ​→ C.
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PROBLEM 2-17 (IAA) - ​TIMEX COMPANY
Balance per Ledger (SQUEEZE)
Proceeds of Bank Loan
Proceeds of Customer Note
DM Service Charge
Collection Fee by Bank
NSF Check
Adjusted Book Balance
2,120,000 → A.
500,000
450,000
(
5,000)
(
15,000)
(​
50,000​)
3,000,000
Balance per Bank (SQUEEZE)
Deposit in Transit
Bank Error
Outstanding Checks (750,000 - 50,000)
Adjusted Bank Balance
3,070,000 → B.
450,000
180,000
( ​ ​ 700,000)
3,000,000
PROBLEM 2-18 (AICPA) - ​JANE COMPANY
Balance per Ledger (SQUEEZE)
Note Collected by Bank
Interest on Note
Book Error
Service Charge
NSF Check
Adjusted Book Balance
7,070,000 → A.
1,000,000
100,000
100,000
(
20,000)
(​ 500,000​)
7,750,000
Balance per Bank
Deposit in Transit
Bank Error - Erroneous Credit
Outstanding Checks (1,500,000 - 200,000)
Adjusted Bank Balance
8,000,000
1,200,000
( 150,000)
(​ 1,300,000​)
7,750,000 → A.
Currency and Coins on hand
Petty Cash Fund
Adjusted Cash in Bank
Total Cash (Current Assets)
900,000
50,000
7,750,000
8,700,000 → A.
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PROBLEM 2-19 (AICPA) - ​PEARL COMPANY
Balance per Bank, July 1
Deposits
Checks Processed
Service Charge
NSF Check
Monthly Loan Payment
Balance per Bank, July 31
550,000
1,800,000
( 1,400,000)
(
30,000)
( 120,000)
(​ 100,000​)
700,000 → A.
Balance per Bank, July 31
Deposit in Transit
Bank Error (300,000 - 30,000)
Outstanding Check
Adjusted Bank Balance
700,000
100,000
270,000
(​ 150,000​)
920,000 → B.
Balance per Ledger (SQUEEZE)
Book Error (200,000 - 20,000)
Service Charge
NSF Check
Monthly Loan Payment
Adjusted Book Balance
990,000 → C.
180,000
( 30,000)
( 120,000)
(​ 100,000​)
920,000
PROBLEM 2-20 (IAA)
1. D.
2. A.
3. C.
4. B.
5. C.
6. A.
7. B.
8. D.
9. C.
10. D.
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SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition
CHAPTER 3
PROBLEM 3-1 (ACP) - ​SASSY COMPANY
Bank Reconciliation - June 30
Book Balance
CM for Note Collected
NSF Check
Service Charge
Adjusted Book Balance
1,000,000
300,000
( ​ ​100,000)
(​
4,000​)
1,196,000
Bank Balance
Deposit in Transit
Outstanding Checks
Adjusted Bank Balance
1,650,000
400,000
(​ 854,000​)
1,196,000
Bank Reconciliation - July 31
Book Balance ​(1,000,000 + 4,000,000 - 3,600,000)
CM for Bank Loan
Service Charge
Adjusted Book Balance
1,400,000
500,000
(​
1,000​)
1,899,000
Bank Balance ​(1,650,000 + 3,500,000 - 2,500,000)
Deposit in Transit - ​?
Outstanding Checks - ​?
Adjusted Bank Balance
2,650,000
1,100,000
(​ 1,851,000​)
1,899,000
Adjusting Entries - July 31
a.) Cash in Bank
Bank Loan Payable
500 000
500 000
b.) Bank Service Charge
Cash in Bank
1 000
1 000
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Computation of Deposit in Transit - July 31
Deposit in Transit - June 30
400,000
Add: Deposits (July)
Book Debits
4,000,000
Less: June CM for Note Collected
(​300,000​) ​3,700,000
Total
4,100,000
Less: Deposits credited by bank (July)
Bank Credits
3,500,000
Less: July CM for Bank Loan
(​500,000​) (​3,000,000​)
Deposit in Transit - July 31
1,100,000
Computation of Outstanding Checks - July 31
Outstanding Checks - June 30
Add: Checks drawn by Company (July)
Book Credits
3,600,000
Less: June DM for NSF Check
(100,000)
June DM for Service Charge
(​4,000​)
Total
Less: Checks paid by bank (July)
Bank Debits
2,500,000
Less: July DM for Service Charge
(​1,000​)
Outstanding Checks - July 31
854,000
3,496,000
4,350,000
(​2,499,000​)
1,851,000
PROBLEM 3-2 (ACP) - ​BEEHIVE COMPANY
Bank Reconciliation - October 31
Adjusted Book Balance
Bank Balance
Deposit in Transit
Outstanding Checks - ​?
Adjusted Bank Balance
600,000
400,000
300,000
(​100,000​)
600,000
Bank Reconciliation - November 30
Book Balance ​(600,000 + 2,200,000 - 1,800,000)
Book Receipt Error ​(100,000 - 10,000)
Book Disbursement Error ​(300,000 - 30,000)
Adjusted Book Balance
1,000,000
90,000
(​ 270,000​)
820,000
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Bank Balance
Deposit in Transit - ​?
Bank Disbursement Error
Outstanding Checks
Bank Receipt Error
Adjusted Bank Balance
930,000
190,000
200,000
( 400,000)
(​ 100,000​)
820,000
Adjusting Entries - November 30
a.) Cash in Bank
Accounts Receivable
90 000
90 000
b.) Accounts Payable
Cash in Bank
270 000
270 000
Computation of Deposit in Transit - November 30
Deposit in Transit - October 31
300,000
Add: Deposits (November)
Book Receipts
2,200,000
Add: Book Error - Collection from Cust.
90,000 2
​ ,290,000
Total
2,590,000
Less: Deposits credited by bank ​(November)
Bank Receipts
2,500,000
Less: Bank Error - Erroneous Credit
(​100,000​) (​2,400,000​)
Deposit in Transit - July 31
190,000
Computation of Outstanding Checks - October 31 (SQUEEZE)
Outstanding Checks - October 31
100,000
Add: Checks drawn by Company ​(November)
Book Disbursements
1,800,000
Add: Book Error - Payment of Account
270,000 ​2,070,000
Total
2,170,000
Less: Checks paid by bank ​(November)
Bank Disbursements
1,970,000
Less: Bank Error - Erroneous Charge
(​200,000​) (​1,770,000​)
Outstanding Checks - November 30
400,000
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PROBLEM 3-3 (IAA) - ​FABULOUS COMPANY
Bank Reconciliation - July 1
Adjusted Book Balance
1,270,000
Bank Balance (SQUEEZE)
Deposit in Transit - ​?
Outstanding Checks - ​?
Adjusted Bank Balance
1,720,000
500,000
(​ 950,000​)
1,270,000
Bank Reconciliation - July 31
Book Balance (SQUEEZE)
Note collected by Bank
Service Charge
Adjusted Book Balance
470,000
1,500,000
(​
20,000​)
1,950,000
Bank Balance
Deposit in Transit
Outstanding Checks ​(C#107, C#108)
Adjusted Bank Balance
2,700,000
400,000
(​ 1,150,000​)
1,950,000
Adjusting Entries - July 31
a.) Cash in Bank
Note Receivable
1 500 000
1 500 000
b.) Bank Service Charge
Cash in Bank
20 000
20 000
Computation of Deposit in Transit - July 1 (SQUEEZE)
Deposit in Transit - July 1
500,000
Cash Receipts per Book
3,400,000
Deposits Credited by Bank ​(July 31)
(​3,500,000​)
Deposit in Transit - July 31
400,000
Computation of Outstanding Checks - October 31 (SQUEEZE)
Outstanding Checks - July 1
950,000
Checks drawn by Company (​ July 31)
4,200,000
Checks paid by bank (​ July 31)
(​4,000,000​)
Outstanding Checks - November 30
1,150,000
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PROBLEM 3-4 (ACP) - ​FLAMBOYANT COMPANY
Bank Reconciliation - November 30
Balance per Book ​(990,000 + 710,000 - 1,200,000)
Service Charge
NSF Check
Book Error - Erroneously Recorded
Adjusted Book Balance
500,000
( ​ ​10,000)
( ​ ​50,000)
(​ 100,000​)
340,000
Balance per Bank ​(1,100,000 + 500,000 - 1,000,000)
Deposit in Transit - ​?
Outstanding Checks - ​?
Adjusted Bank Balance
600,000
120,000
(​ 380,000​)
340,000
Adjusting Entries - November 30
a.) Bank Service Charge
Accounts Receivable
Notes Receivable
Cash in Bank
10 000
50 000
100 000
160 000
Computation of Deposit in Transit - November 30
Deposit in Transit - October 31
Add: Deposits (October)
Book Debits
710,000
Unrecorded Collections in October
(45,000)
Book Error - Erroneously Recorded
(​100,000​)
Total
Less: Deposits credited by bank ​(October)
Bank Credits
500,000
Bank Error - Correction
(​10,000​)
Deposit in Transit - July 31
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45,000
565,000
610,000
(​490,000​)
120,000
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Computation of Outstanding Checks - November 30
Outstanding Checks - October 31
125,000
Add: Checks drawn by Company ​(October)
Book Credits
1,200,000
Bank Service Charge (​ October)
(​5,000​) 1
​ ,195,000
Total
1,320,000
Less: Checks paid by bank ​(October)
Bank Debits
1,000,000
Bank Service Charge (​ November)
(10,000)
NSF Check (​ November)
(​50,000​) (​940,000​)
Outstanding Checks - November 30
380,000
PROBLEM 3-5 (ACP) - ​EFFICIENCY COMPANY
Book to Bank Method:
Book Balance
Note Collected by Bank
March
April
Service Charge
March
April
NSF Check
March
April
Deposit in Transit
March 31
April 30
Outstanding Checks
March 31
April 30
Bank Balance
March 31
200,000
Receipts
800,000
60,000
(60,000)
100,000
Disbursements
720,000
100,000
(20,000)
(80,000)
(8,000)
2,000
(8,000)
(2,000)
(20,000)
30,000
(30,000)
80,000
(220,000)
(220,000)
178,000
330,000
178,000
(​372,000​)
530,000
700,000
Adjusting Entry:
Bank Service Charge
Accounts Receivable
Notes Receivable
Cash in Bank
April 30
280,000
10 000
50 000
100 000
160 000
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​372,000
500,000
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PROBLEM 3-6 (IAA) - ​BIGOTRY COMPANY
Bank to Book Method:
Bank Balance
Book Error on Collection
Book Error on Payment
Bank Error on Deposit
Bank Error on Payment
NSF Check:
July
August
Note Collected by Bank:
July
August
Deposit in Transit:
July
August
Outstanding Checks:
July
August
​Book Balance
July 31
800,000
Receipts
5,000,000
(180,000)
Disbursements
3,940,000
(400,000)
August 31
1,860,000
(180,000)
540,000
(200,000)
400,000
100,000
(50,000)
50,000
(540,000)
(200,000)
100,000
(200,000)
200,000
(300,000)
(300,000)
600,000
(600,000)
480,000
480,000
(100,000)
​1,200,000
(100,000)
​650,000
3,600,000
4,400,000
(​650,000​)
2,000,000
PROBLEM 3-7 (IAA) - ​BEDLAM COMPANY
Book Balance
Bank Service Charge
November 30
December 31
Collection of Note
November 30
December 31
Adjusted Book Balance
Bank Balance
Outstanding Checks
November 30
December 31
Deposit in Transit
November 30
December 31
Bank Error
November 30
December 31
Adjusted Bank Balance
November 30
​2,032,000
Receipts
2,568,000
Disbursements
1,440,000
December 31
3,160,000
(2,000)
4,000
(4,000)
​1,830,000
200,000
(​300,000​)
2,468,000
1,442,000
(​300,000​)
2,856,000
1,890,000
2,090,000
1,080,000
2,900,000
(180,000)
592,000
(592,000)
(2,000)
(200,000)
(180,000)
80,000
498,000
(80,000)
40,000
(40,000)
​1,830,000
2,468,000
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498,000
(​50,000​)
1,442,000
​50,000
2,856,000
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Adjusting Entry:
Bank Service Charge
Notes Receivable
Cash in Bank
4 000
300 000
304 000
PROBLEM 3-8 (IAA) - ​JARGON COMPANY
Book Balance
NSF Check:
September 30
October 31
Collection of A/R
September 30
October 31
Book Error
September 30
October 31
Adjusted Book Balance
September 30
1,900,000
Bank Balance
Deposit in Transit
September 30
October 31
Outstanding Checks
September 30
October 31
Adjusted Bank Balance
Receipts
1,400,000
Disbursements
2,400,000
(60,000)
(60,000)
40,000
30,000
(30,000)
50,000
90,000
(90,000)
​1,960,000
October 31
900,000
(40,000)
50,000
1,330,000
(​120,000​)
2,260,000
​ 20,000
1
1,030,000
2,100,000
1,200,000
2,500,000
800,000
130,000
(130,000)
260,000
260,000
(270,000)
​1,960,000
(270,000)
​30,000
2,260,000
1,330,000
Adjusting Entry:
Accounts Receivable
Cash in Bank
40 000
40 000
Cash in Bank
Accounts Receivable
Salaries
170 000
50 000
120 000
PROBLEM 3-9 (PHILCPA) - ​HUMANIZER COMPANY
Outstanding Checks, May 31
Checks recorded by Book in June
Total Checks to be paid by Bank
Checks recorded by Bank in June
Outstanding Checks, June 30
100,000
2,500,000
2,600,000
(​ 2,200,000​)
400,000 → B.
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(​30,000​)
1,030,000
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Deposits in Transit, May 31
Deposits recorded by Book in June
Total Deposits to be acknowledged by Bank
Deposits recorded by Bank in June
Deposits in Transit, June 30
300,000
1,800,000
2,100,000
(​ 1,600,000​)
500,000 → D.
Balance per Bank, June 30
Deposits in Transit, June 30
Outstanding Checks, June 30
Adjusted Bank Balance
2,400,000
500,000
(​ 400,000​)
2,500,000
Balance per Book, June 30
Note Collected by Bank, June 30
Service Charges, June 30
NSF Checks, June 30
Adjusted Book Balance
2,100,000
550,000
(
50,000)
(​ 100,000​)
2,500,000 → A.
PROBLEM 3-10 (AICPA) - ​COOL COMPANY
Balance per Bank, November 30
December Deposits
Total
December Disbursements
Balance per Bank, December 31
Deposits in Transit, December 31
Outstanding Checks, December 31
Adjusted Bank Balance, December 31
3,600,000
5,500,000
9,100,000
(​ 4,400,000​)
4,700,000
700,000
(​ 500,000​)
4,900,000 → B.
Balance per Book, December 31 ​(SQUEEZE)
Note Collected by Bank, December 31
Service Charges, December 31
NSF Checks, December 31
Adjusted Book Balance, December 31
4,300,000 → D.
1,000,000
(
50,000)
(​ 350,000​)
4,900,000
December Bank Deposits
Note Collected by Bank, December 31
Deposits in Transit, November 30
Deposits in Transit, December 31
December Book Receipts
5,500,000
( 1,000,000)
( 800,000)
700,000
4,400,000 → B.
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December Bank Disbursements
NSF Checks, December 31
Service Charge, December 31
Erroneous Bank Credit, November 30
Outstanding Checks, November 30
Outstanding Checks, December 31
December Book Receipts
4,400,000
( 350,000)
(
50,000)
( 200,000)
( 1,200,000)
500,000
3,100,000 → C.
PROBLEM 3-11 (AICPA) - ​LOVABLE COMPANY
Balance per Bank, June 30
July Bank Receipts
July Bank Disbursements
Balance per Bank, July 31
Deposits in Transit, July 31
Outstanding Checks, July 31
Adjusted Bank Balance, December 31
3,000,000
9,000,000
(​ 7,000,000​)
5,000,000
1,000,000
(​ 600,000​)
5,400,000 → D.
Balance per Book, July 31​ (SQUEEZE)
Note Collected by Bank, July 31
Service Charges, July 31
NSF Checks, July 31
Adjusted Book Balance, July 31
5,350,000 → B.
200,000
(
10,000)
(​ 140,000​)
5,400,000
July Bank Deposits
Note Collected by Bank, July 31
Deposits in Transit, June 30
Deposits in Transit, July 31
July Cash Receipts per Book
9,000,000
( 200,000)
( 400,000)
1,000,000
9,400,000 → A.
July Bank Disbursements
NSF Checks, July 31
Service Charge, July 31
Outstanding Checks, June 30
Outstanding Checks, July 31
July Cash Disbursements per Book
7,000,000
( 140,000)
(
10,000)
( 900,000)
600,000
6,550,000 → A.
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PROBLEM 3-12 (AICPA) - ​LOQUACIOUS COMPANY
Balance per Bank, June 30
July Bank Receipts
July Bank Disbursements
Balance per Bank, July 31
Deposits in Transit, July 31
Outstanding Checks, July 31
Adjusted Bank Balance, December 31
9,800,000
6,500,000
(​ 9,000,000​)
7,300,000
600,000
(​ 1,000,000​)
6,900,000 → C.
Balance per Book, June 30
Book Receipts, July 31
Book Disbursements, July 31
Adjusted Book Balance, July 31
8,800,000
6,700,000
(​ 8,600,000​)
6,900,000 → A.
July Bank Deposits
Deposits in Transit, June 30
Deposits in Transit, July 31
July Cash Receipts per Book
6,500,000
( 400,000)
600,000
6,700,000 → A.
July Bank Disbursements
Outstanding Checks, June 30
Outstanding Checks, July 31
July Cash Disbursements per Book
9,000,000
( 1,400,000)
1,000,000
8,600,000 → A.
PROBLEM 3-13 (AICPA) - ​OPAQUE COMPANY
Balance per Bank, March 31
April Bank Receipts
April Bank Disbursements
Balance per Bank, April 30
Deposits in Transit, April 30
Outstanding Checks, April 30
Adjusted Bank Balance, December 31
4,650,000
6,000,000
(​ 5,000,000​)
5,650,000
1,500,000
(​ 750,000​)
6,400,000 → D.
Balance per Book, March 31
Book Receipts, July 31
Book Disbursements, July 31
Adjusted Book Balance, April 30
8,800,000
6,500,000
(​ 4,500,000​)
6,400,000 → A.
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April Bank Deposits
Deposits in Transit, March 31
Deposits in Transit, April 30
April Cash Receipts per Book
6,000,000
( 1,000,000)
1,500,000
6,500,000 → B.
April Bank Disbursements
Outstanding Checks, March 31
Outstanding Checks, April 30
April Cash Disbursements per Book
5,000,000
( 1,250,000)
750,000
4,500,000 → C.
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SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition
CHAPTER 4
PROBLEM 4-1 (IAA) - ​DREAMER COMPANY
Requirement 1 - Compound Entry
Accounts Receivable
Notes Receivable
Installments Receivable
Advances to Suppliers
Advances to Subsidiary
Claim Receivable
Subscriptions Receivable
Accrued Interest Receivable
Customer’s Credit Balances
Advances from Customers
Receivables
775 000
100 000
300 000
150 000
400 000
15 000
300 000
10 000
30 000
20 000
2 000 000
Requirement 2 - CA (Trade and Other Receivables)
Accounts Receivable
775,000
Allowance for Doubtful Accounts
( 50,000)
Notes Receivable
100,000
Installments Receivable
300,000
Advances to Suppliers
150,000
Claims Receivable
15,000
Subscription Receivable
300,000
Accrued Interest Receivable
​
10,000
Total Trade and other Receivables
1,600,000
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PROBLEM 4-2 (IAA) - ​CREDIBLE COMPANY
Requirement 1 - Computation of Accounts Receivable
Accounts Receivable - January 1
600,000
Charge Sales
6,000,000
Total
6,600,000
Less: Collections from Customers
5,300,000
Write-off
35,000
Merchandise Returns
40,000
Allowance to Customers
25,000 (​5,400,000​)
Accounts Receivable - December 31
1,200,000
Requirement 2 - Compound Entry
Subscriptions Receivable
Deposit on Contract
Claim Receivable
Advances to Employees
Advances to Affiliated
Advances to Supplier
Accounts Receivable
150 000
120 000
60 000
10 000
100 000
50 000
490 000
Requirement 3 - CA (Trade and Other Receivables)
Accounts Receivable
1,200,000
Claims Receivable
60,000
Advances to Employees
10,000
Advances to Supplier
​
50,000
Total Trade and other Receivables
1,320,000
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PROBLEM 4-3 (ACP) - ​AFFECTIONATE COMPANY
Requirement 1 - FOB Destination, Freight Collect
Accounts Receivable
500 000
Freight Out
10 000
Sales
500 000
Allowance for Freight Charges
10 000
Cash
Sales Discount
Allowance for Freight Charges
Accounts Receivable
475 000
15 000
10 000
500 000
Requirement 2 - FOB Destination, Freight Prepaid
Accounts Receivable
500 000
Freight Out
10 000
Sales
500 000
Cash
10 000
Cash
Sales Discount
Accounts Receivable
485 000
15 000
500 000
Requirement 3 - FOB Shipping Point, Freight Collect
Accounts Receivable
500 000
Sales
500 000
Cash
Sales Discount
Accounts Receivable
485 000
15 000
500 000
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PROBLEM 4-4 (ACP) - ​FIANCEE COMPANY
Requirement 1 - Sale of Merchandise on Account, 2/10, n/30
Accounts Receivable
4 000 000
Sales
4 000 000
Requirement 2 - Collection within the Discount Period
Cash
1 470 000
Sales Discount
30 000
Accounts Receivable
1 500 000
Requirement 3 - Collection beyond the Discount Period
Cash
1 000 000
Accounts Receivable
1 000 000
Requirement 4 - Sales Return granted
Sales Return
Accounts Receivable
100 000
100 000
Requirement 5 - Sales Return estimated at the end of the year
Sales Return
20 000
Accounts Receivable
20 000
PROBLEM 4-5 (IAA) - ​ROMELA COMPANY
Requirement 1 - Sale of Merchandise on Account, 2/10, n/30
Accounts Receivable
4 500 000
Sales Revenue
4 500 000
Requirement 2 - Collection within the Discount Period
Cash
4 410 000
Sales Discount
90 000
Accounts Receivable
4 500 000
Requirement 3 - Collection beyond the Discount Period
Cash
4 500 000
Accounts Receivable
4 500 000
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PROBLEM 4-6 (IAA) - ​PRIME COMPANY
Requirement 1 - Sale of Merchandise on Account, 2/10, n/30
Accounts Receivable
2 450 000
Sales Revenue
2 450 000
Requirement 2 - Collection within the Discount Period
Cash
2 450 000
Accounts Receivable
2 450 000
Requirement 3 - Collection beyond the Discount Period
Cash
2 500 000
Accounts Receivable
2 450 000
Sales Discount - Forfeited
50 000
PROBLEM 4-7 (IAA) - ​RAVEN COMPANY
Requirement 1 - Sale of Merchandise on Account, 2/10, n/30
Accounts Receivable
4 000 000
Sales Revenue
4 000 000
Requirement 2 - Sales Returns
Sales Return
Accounts Receivable
300 000
300 000
Requirement 3 - Year-end Adjusting Entry for Estimated Sales Returns
Sales Return
100 000
Accounts Receivable
100 000
Estimated Sales Returns ​(10% x 4,000,000)
Actual Returns
Balance
400,000
300,000
100,000
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PROBLEM 4-8 (AICPA) - ​VALIANT COMPANY
Trade Accounts Receivable
Allowance for Doubtful Accounts
Claims Receivable
Total Trade and other Receivables
2,000,000
( 100,000)
​ 300,000
2,200,000 → A.
PROBLEM 4-9 (AICPA) - ​JINX COMPANY
Accounts Receivable, January 1
Credit Sales
Collections from Customers
Sales Returns
Accounts Written-off
Accounts Receivable, December 31
Allowance for Doubtful Accounts
Allowance for Sales Returns
Net Realizable Value
1,300,000
5,500,000
( 5,000,000)
( 150,000)
(​ 100,000​)
​ 1,550,000
( 250,000)
(​ 50,000​)
1,250,000 → B.
PROBLEM 4-10 (AICPA) - ​RAPTURE COMPANY
Accounts Receivable, January 1
Credit Sales
Collections from Customers
Accounts Written-off
Accounts Receivable, December 31
1,300,000
5,400,000
( 4,750,000)
(​ 125,000​)
​ 1,825,000 → A.
PROBLEM 4-11 (PHILCPA) - ​HAREM COMPANY
Trade Accounts Receivable
Trade Installments Receivable ​(850,000 - 50,000)
Trade Accounts Receivable from Officers
Accounts on which PDC are held
Total Trade Accounts Receivable
3,500,000
800,000
150,000
​ 200,000
4,650,000 → A.
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PROBLEM 4-12 (IAA) - ​VON COMPANY
Accounts Receivable, January 1
Charge Sales
Accounts written-off but recovered
Total
Collections from Customers
Accounts Written-off
Merchandise Returns
Allow. to customers for shipping damages
Accounts Receivable, December 31
Accounts Receivable, January 1
Credit balance of Customer
Adjusted​ ​Accounts Receivable
560,000
5,250,000
10,000
5,820,000
( 5,150,000)
(
35,000)
(
25,000)
(​
15,000​)
​ 595,000 → B.
530,000
30,000
560,000
Collections from Customers
Overpayment
Adjusted Collections
5,200,000
(​
50,000​)
​ 5,150,000
Accounts Receivable
Claim Receivable ​(400,000 - 50,000)
Advances to Supplier
Total Trade and other Receivables
595,000
350,000
​ 300,000
1,245,000 → C.
Subscriptions Receivable ​(1,000,000 - 200,000)
Deposit on Contract
Total long-term other Receivables
800,000
​ 500,000
1,300,000 → C.
PROBLEM 4-13 (IAA) - ​WONDER COMPANY
Accounts Receivable, January 1
Credit Sales
Total
Cash received from Credit Customers
Sales Discounts
Accounts Receivable Written-off
Sales Returns and Allowances
Accounts Receivable, December 31
950,000
3,800,000
4,750,000
( 3,024,000)
( 126,000)
(
50,000)
(​ 250,000​)
​ 1,300,000 → A.
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Total Sales
Cash from Cash Customers - Cash Sales
Credit Sales
5,900,000
(​ 2,100,000​)
3,800,000
Gross A/R Collected ​(3,024,000/96%)
Sales Discounts ​(4% x 3,150,000)
Cash Received from Credit Customers
3,150,000
(​ 126,000​)
​ 3,024,000
Gross Amount
Cash Discounts
Net Amount
100%
(​ 4%​)
​96%
Allow. for Doubtful Accounts, January 1
Recovery of Accounts Written-off
Doubtful Accounts Expense for Cur. Year
Total
Accounts Written-off
100,000
80,000
​ 70,000
250,000
(​ 50,000​)
200,000 → B.
Allow. for Doubtful Accounts, December 31
PROBLEM 4-14 (IAA)
PROBLEM 4-15 (AICPA)
1. D.
2. D.
3. A.
4. C.
5. D.
6. C.
7. D.
8. B.
9. A.
10. C.
1.
2.
3.
4.
5.
C.
A.
A.
D.
B.
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SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition
CHAPTER 5
PROBLEM 5-1 (IAA) - ​MARVELOUS COMPANY
Requirement 1
Credit Sales (5,000,000 x 75%) = 3,750,000
Doubtful Accounts (3,750,000 x 2%) = 75,000
Doubtful Accounts
Allowance for Doubtful Accounts
75 000
75 000
Requirement 2
Doubtful Accounts ​(5,000,000 x 1%)
Allowance for Doubtful Accounts
Requirement 3
Required Allowance
Credit Balance of Allowance
Doubtful Accounts Expense
50 000
50 000
80,000
(​20,000​)
60,000
Doubtful Accounts
Allowance for Doubtful Accounts
Requirement 4
Required Allowance ​(500,000 x 10%)
Credit Balance of Allowance
Doubtful Accounts Expense
60 000
60 000
50,000
20,000
30,000
Doubtful Accounts
Allowance for Doubtful Accounts
30 000
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30 000
lOMoARcPSD|31480569
PROBLEM 5-2 (IAA) - ​TEMPLATE COMPANY
Requirement 1 - Journal Entries pertaining to Accounts Receivable
1. Accounts Receivable
7 000 000
Sales
7 000 000
2. Cash
Sales Discount
Accounts Receivable
2 450 000
50 000
3. Cash
Accounts Receivable
3 900 000
2 500 000
3 900 000
4. Allowance for Doubtful Accounts
Accounts Receivable
30 000
5. Allowance for Doubtful Accounts
Accounts Receivable
10 000
30 000
10 000
Cash
Accounts Receivable
10 000
6. Sales Return
Accounts Receivable
70 000
10 000
70 000
Requirement 2
Allow. for Doubtful Accounts - ​12/31
(1,500,000 x 4%)
Allowance before Adjustment
Doubtful Accounts Expense
60,000
(​20,000​)
40,000
(40,000/1,000,000 = ​4%​)
(7,000,000 + 1,000,000 - 2,500,000 - 3,900,000 - 30,000 - 70,000 = ​1,500,000​)
(40,000 + 10,000 - 30,000 = ​20,000​)
Doubtful Accounts
Allowance for Doubtful Accounts
Requirement 3
Accounts Receivable​ ​-​ 12/31
Allowance for Doubtful Accounts
Net Realizable Value
40 000
40 000
1,500,000
(​ 60,000​)
1,440,000
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PROBLEM 5-3 (IAA) - ​JOCOSE COMPANY
Requirement 1 - Journal Entries pertaining to Transactions
1. Cash
800 000
Accounts Receivable
7 200 000
Sales (​ 800,000/10%)
8 000 000
2. Cash
Sales Discount ​(720,000 x 5%)
Accounts Receivable ​(7,200,000 x 10%)
3. Cash
Accounts Receivable
684 000
38 000
720 000
5 940 000
5 940 000
4. Sales Discount
Allowance for Sales Discount
10 000
5. Sales Return
Accounts Receivable
80 000
6. Allowance for Doubtful Accounts
Accounts Receivable
60 000
10 000
80 000
60 000
Accounts Receivable
Allowance for Doubtful Accounts
10 000
Cash
Accounts Receivable
10 000
10 000
10 000
7. Doubtful Accounts
Allowance for Doubtful Accounts
Required Allowance - ​12/31
(2,400,000 x 5%)
Allowance before Adjustment
Doubtful Accounts Expense
70 000
70 000
120,000
(​50,000​)
70,000
(100,000/2,000,000 = ​5%​)
(7,200,000 + 2,000,000 - 720,000 - 5,940,000 - 80,000 - 60,000 = ​2,400,000​)
(100,000 + 10,000 - 60,000 = ​50,000​)
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Requirement 2
Accounts Receivable​ ​-​ 12/31
Allowance for Doubtful Accounts
Allowance for Sales Discount
Net Realizable Value
2,400,000
( 120,000)
(​ 10,000​)
2,270,000
PROBLEM 5-4 (IAA) - ​RELENTLESS COMPANY
Requirement 1 - Journal Entries pertaining to Transactions
1. Accounts Receivable
2 600 000
Sales (​ 3,070,000 - 470,000)
2 600 000
2. Cash ​(2,455,000 - 1,455,000)
Accounts Receivable
1 000 000
3. Cash
Sales Discount ​(1,455,000 x 3%)
Accounts Receivable ​(1,455,000/97%)
1 455 000
45 000
1 000 000
4. Allowance for Doubtful Accounts
Accounts Receivable
5. Cash
Sales
1 500 000
20 000
20 000
470 000
470 000
6. Sales Return and Allowances
Accounts Receivable
55 000
7. Sales Returns and Allowances
Cash
10 000
8. Accounts Receivable
Allowance for Doubtful Accounts
Cash
Accounts Receivable
55 000
10 000
5 000
5 000
5 000
5 000
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Requirement 2 - Adjustment
Doubtful Accounts
Allowance for Doubtful Accounts
Credit Sales
Sales Discount
Sales Return and Allowances
Net Credit Sales
50 000
50 000
2,600,000
( 45,000)
(​ 55,000​)
2,500,000
Doubtful Accounts ​(2,500,000 x 2%)​ = ​50,000
Requirement 3
Accounts Receivable
Allowance for Doubtful Accounts
Net Realizable Value
625,000
(​ 60,000​)
565,000
(2,600,000 + 600,000 - 1,000,000 - 1,500,000 - 20,000 - 55,000 = ​625,000​)
(50,000 + 25,000 + 5,000 - 20,000 = 60,000)
PROBLEM 5-5 (IAA) - ​NOSTALGIA COMPANY
Requirement 1 - Journal Entries pertaining to Transactions
1. Accounts Receivable
7 935 000
Sales
7 935 000
2. Cash
Sales Discount ​(4,500,000 x 2%)
Accounts Receivable ​(4,410,000/98%)
4 410 000
90 000
3. Cash
Sales Discount ​(2,500,000 x 1%)
Accounts Receivable ​(2,475,000/99%)
2 475 000
25 000
4. Accounts Receivable
Allowance for Doubtful Accounts
4 500 000
2 500 000
15 000
15 000
Cash
Accounts Receivable
15 000
5. Cash
Accounts Receivable
1 100 000
15 000
1 100 000
(8,000,000 - 4,410,000 - 2,475,000 - 15,000)
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6. Allowances for Doubtful Accounts
Accounts Receivable
55 000
7. Sales Return
Accounts Receivable
30 000
55 000
30 000
Requirement 2 - Adjustment
Doubtful Accounts
Allowance for Doubtful Accounts
30 000
30 000
Required Allowance ​(1,250,000 x 4%)
Allowance before Adjustment
Doubtful Accounts Expense
50,000
(​20,000​)
30,000
(60,000/1,500,000 = ​4%​)
(7,935,000 + 1,500,000 - 4,500,000 - 2,500,000 + 15,000 - 15,000 - 1,100,000 - 55,000 - 30,000 = ​ 1,250,000​)
(60,000 + 15,000 - 55,000 = ​20,000​)
Requirement 3
Accounts Receivable
Allowance for Doubtful Accounts
Net Realizable Value
1,250,000
(​ 50,000​)
1,200,000
PROBLEM 5-6 (PHILCPA) - ​RAMPANT COMPANY
Amount
1,700,000
1,200,000
100,000
150,000
​1,200,000
​ 3,270,000
1. Not yet due
1 – 30 days past due
31 – 60 days past due
61 – 90 days past due
Over 90 days past due
Percent of
Uncollectible
5%
25%
50%
100%
2. Allowance – January 1
Receivables
​Doubtful Accounts Expense (SQUEEZE)
Total
Less: Writeoff (235,000 + 30,000)
​Required Allowance – December 31
3. Doubtful Accounts
Allowance for Doubtful Accounts
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Required
Allowance
60,000
25,000
75,000
​120,000
280,000
170,000
30,000
​345,000
545,000
​265,000
​280,000
345 000
345 000
lOMoARcPSD|31480569
4. Accounts Receivable
Less: Allowance for Doubtful Accounts
​Net Realizable Value
3,270,000
​ 280,000
​2,990,000
PROBLEM 5-7 (AICPA) - ​SAVVY COMPANY
170,000 – 10,000
Rate in 2019​ = ------------------------ = ​.016
10,000,000
258,000 – 20,000
​Rate in 2020​ = -------------------------- = ​.017
14,000,000
1. Retained Earnings (.016 x 1,250,000)
Allowance for Doubtful Accounts
20,000
2. Allowance – January 1
Recoveries – 2020
​Doubtful Accounts – 2019 (SQUEEZE)
Total
Less: Writeoff – 2020
​Allowance – December 31​ (.017 x 2,000,000)
20,000
20,000
10,000
​ 92,000
122,000
​ 88,000
​ 34,000
3. Accounts Receivable
Less: Allowance for Doubtful Accounts
​Net Realizable Value
2,000,000
​ 34,000
​1,966,000
PROBLEM 5-8 (AICPA) - ​PARAMOUNT COMPANY
1. Allowance – January 1, 2020
Doubtful accounts recorded (2% x 20,000,000)
Recovery
Total
Less: Writeoff (300,000 + 100,000)
​Allowance balance before adjustment
500,000
400,000
​ 50,000
950,000
​400,000
​550,000
2. 5,000,000 x 5%
2,000,000 x 10%
1,000,000 x 25%
500,000 – 100,000 x 75%
​Required Allowance – December 31, 2020
3. Doubtful accounts
Allowance for doubtful accounts (1,000,000 – 550,000)
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250,000
200,000
250,000
​ 300,000
​1,000,000
450,000
450,000
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PROBLEM 5-9 (AICPA) - ​SCION COMPANY
1. ​Allowance – 1/1/2020 (1% x 2,800,000)
28,000
2. Allowance – 1/1/2020
Doubtful Accounts recorded in 2020 (1% x 3,000,000)
Recovery
Total
Writeoff
​Allowance before adjustment
28,000
30,000
7,000
65,000
(​27,000)
38,000
3. 300,000 x 1%
80,000 x 5%
60,000 x 20%
25,000 x 80%
​Required allowance – 12/31/2020
3,000
4,000
12,000
20,000
39,000
4. Doubtful accounts
Allowance for doubtful accounts (39,000 – 38,000)
1,000
1,000
PROBLEM 5-10 (IAA) - ​GRUESOME COMPANY
Allowance – January 1
Doubtful Accounts Expense (SQUEEZE)
Total
Less: Writeoff
Required Allowance – December 31
200,000
​500,000 → C.
700,000
​300,000
​400,000
PROBLEM 5-11 (AICPA) - ​TANTRUM COMPANY
1,200,000 x 1%
900,000 x 2%
1,000,000 x 6%
Allowance – December 31
12,000
18,000
​60,000
​90,000
Allowance – January 1
Uncollectible Accounts Expense (SQUEEZE)
Recovery
Total
Less: Writeoff
Allowance – December 31
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60,000
80,000 → B.
20,000
160,000
​ 70,000
​90,000
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PROBLEM 5-12 (AICPA) - ​DELTA COMPANY
Available Discount ​(2,000,000 x 2%)
Allowance for Sales Discount​ (40,000 x 50%)
1,400,000 x 5%
400,000 x 10%
200,000 x 50%
Allowance for Doubtful Accounts
Accounts Receivable
Less: Allowance for Doubtful Accounts
Allowance for Sales Discounts
Net Realizable Value
40,000
20,000 → A.
70,000
40,000
​100,000
​210,000 → B.
4,000,000
​210,000
20,000
​3,770,000 → C.
PROBLEM 5-13 (AICPA) - ​NAMESAKE COMPANY
Doubtful Accounts Expense​ (3% x 3,000,000 + 10,000)
100,000 → B.
PROBLEM 5-14 (AICPA) - ​BESTIAL COMPANY
Doubtful Accounts Expense​ (2% x 7,000,000)
140,000 → A.
PROBLEM 5-15 (AICPA) - ​CASTAWAY COMPANY
Allowance – January 1
Doubtful Accounts Expense ​(5% x 8,000,000)
Recovery
Total
Less: Writeoff
Allowance – December 31
200,000
400,000
50,000
650,000
​ 100,000
​550,000 → D.
PROBLEM 5-16 (AICPA) - ​FATEFUL COMPANY
Allowance – January 1
Doubtful Accounts Expense (SQUEEZE)
Total
Less: Writeoff
Allowance – December 31
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250,000
175,000 → D.
425,000
​ 205,000
​220,000
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PROBLEM 5-17 (AICPA) - ​COMPREHENSIVE COMPANY
Allowance – January 1
Provisions for Doubtful Accounts ​(20,000,000 x 2%)
Recoveries
Less: Writeoff ​(200,000 + 100,000)
Allowance – December 31 before adjustment
1,000,000
400,000
50,000
​ 300,000
​1,150,000 → B.
6,000,000 x 10%
2,000,000 x 20%
1,500,000 x 30%
(500,000 - 100,000) x 50%
Allowance for Doubtful Accounts – December 31
600,000
400,000
450,000
​ 200,000
​1,650,000 → A.
Allowance – January 1
Recoveries
Doubtful Accounts Expense (SQUEEZE)
Total
Less: Writeoff
Allowance – December 31
1,000,000
50,000
900,000 → C.
1,950,000
​ 300,000
​1,650,000
Doubtful Accounts Expense
Less: Recorded Amount ​(20,000,000 x 2%)
Year-end Adjustment to the Allowance Account (Credit)
Accounts Receivable – December 31
Less: Allowance for Doubtful Accounts
Net Realizable Value
900,000
​ 400,000
​500,000 → D.
9,900,000
​ 1,650,000
​8,250,000 → B.
PROBLEM 5-18 (PHILCPA) - ​EASY COMPANY
855,000 – 95,000
Rate in 2020 ​ = ---------------------------- = ​.02 or 2%
38,000,000
Doubtful Accounts Expense​ (2% x 7,000,000)
300,000 → B.
Allowance – January 1
Doubtful Accounts Expense
Recovery
Total
Less: Writeoff
Allowance – December 31
80,000
300,000
40,000
420,000
​ 310,000
​110,000 → A.
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Accounts Receivable – January 1
Credit Sales
Less: Collection from Customers
Writeoff
Accounts Receivable – December 31
Accounts Receivable
Less: Allowance for Doubtful Accounts
Net Realizable Value
2,070,000
15,000,000
14,000,000
310,000
2,760,000
2,760,000
110,000
2,650,000 → A.
PROBLEM 5-19 (AICPA) - ​FLAPPABLE COMPANY
3,000,000 x 5%
1,500,000 x 20%
1,200,000 x 25%
1,200,000 x 50%
Allowance for Doubtful Accounts – December 31
150,000
300,000
300,000
​ 600,000
​1,350,000 → A.
Doubtful Accounts Expense 2017, 2018, 2019 ​(5% x 23,500,000)
Recoveries 2018, 2019
Less: Writeoff 2018, 2019
Allowance – December 31 before adjustment
1,175,000
75,000
​ 200,000
​1,050,000
Allowance – January 1
Recoveries 2020
Doubtful Accounts Expense (SQUEEZE)
Total
Less: Writeoff
Allowance – December 31
1,050,000
100,000
500,000 → A.
1,650,000
​ 300,000
​1,350,000
Accounts Receivable
Less: Allowance for Doubtful Accounts
Net Realizable Value
6,900,000
1,350,000
5,550,000 → C.
(3,000,000 + 1,500,000 + 1,200,000 + 1,200,000 = ​6,900,000​)
PROBLEM 5-20 (AICPA) - ​SKY COMPANY
Allowance for Doubtful Accounts – December 31, 2019
Doubtful Accounts Expense 2020
Total
Less: Allowance for Doubtful Accounts – December 31, 2020
Accounts Written-off – 2020
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15,000
30,000
45,000
​10,000
​35,000 → A.
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Accounts Receivable – December 31, 2019
Gross Sales
Total
Less: Accounts Receivable – December 31, 2020
Accounts Written-off – 2020
Sales Returns – Actual
Allowance – December 31
Allowance for Sales Returns – December 31, 2019
Estimated Sales Return (SQUEEZE)
Total
Less: Sales Returns – Actual
Allowance for Sales Returns – December 31, 2020
Gross Sales
Less: Estimated Sales Returns – 2020
Net Sales
PROBLEM 5-21 (AICPA)
1. C.
2. A.
3. A.
4. B.
5. C.
6. D.
7. A.
8. A.
9. D.
10. B.
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800,000
6,150,000
6,950,000
880,000
35,000
15,000
​6,020,000 → C.
25,000
10,000 → A.
35,000
15,000
​20,000
6,150,000
10,000
6,140,000 → B.