PROBLEM 1

Credible Company provided the following T-account summarizing the transactions Solution:
affecting the accounts receivable for the current year:

Accounts Receivable Jan. 1 balance 600,000

Jan. 1 balance 600,000 Collections from customers 5,300,000 Charge sales 6,000,000
Charge sales 6,000,000 Writeoff 35,000 Collection -5,300,000
Shareholder’ subscriptions 200,000 Merchandise returns 40,000 Writeoff -35,000
Deposit on contract 120,000 Allowances to customer Returns -40,000
Claims against common for shipping damages 25,000 Allowance -25,000
carrier for damages 100,000 Collections on carrier claims 40,000 AR, Dec. 31 1,200,000
IOUs from employees 10,000 Collection on subscriptions 50,000
Cash advance to affiliates 100,000 AR, Dec. 31 1,200,000
Advances to a supplier 50,000 Claims 100,000
Collections -40,000
Required: IOU 10,000
1. Compute the correct amount of accounts receivable. Adv. To Supp 50,000
2. Compute the amount to be presented as “trade and other receivables” under current assets. Total 1,320,000

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 1,250,000
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 P30,000 530,000 Beg. Add back 560,000
Charge sales 5,250,000 Charge sales 5,250,000
Charge for goods out on consignment 50,000 Recovery 10,000
Shareholders’ subscriptions 1,000,000 Collections -5,150,000
Accounts written off but recovered 10,000 Writeoff -35,000
Cash paid to customer for January 1 credit balance 25,000 Returns -25,000
Goods shipped to cover January 1 credit balance 5,000 Allowance -15,000
Deposit on long-term contract 500,000 AR, End 595,000
Claim against common carrier 400,000
Advances to supplier 300,000 AR, End 595,000
Claim against common 400,000
carrier
Credits Advances to supplier300,000
Collections from customers, including overpayment of P50,000 5,200,000 Collection on carrier -50,000
claim
Writeoff 35,000 1,245,000
Merchandise returns 25,000
Allowances to customers for shipping damages 15,000 Deposit on long-term500,000
contract
Collection on carrier claim 50,000
Collection on subscription 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
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
Affectionate Company sold merchandise on account for P500,000. The terms are 3/10, n/30. The Accounts Receivable 500,000 Accounts Receivable 500,000 Accounts Receivable 500,000 Accounts Receivable 510,000
related freight charge amounted to P10,000. The account was collected within the discount period. 1 Freight out 10,000 Freight out 10,000 Sales 500,000 Sales 500,000
Sales 500,000 Sales 500,000 Cash 10,000
Required: Allowance for Freight Charge 10,000 Cash 10,000
Prepare journal entries to record the transactions under the following freight terms:
1. FOB destination and freight collect Cash 475,000 Cash 485,000 Cash 485,000 Cash 495,000
2. FOB destination and freight prepaid Sales discount 15,000 Sales Discount 15,000 Sales Discount 15,000 Sales Discount 15,000
3. FOB shipping point and freight collect Allowance for freight charge 10,000 Accounts Receivable 500,000 Accounts Receivable 500,000 Accounts Receivable 510,000
4. FOB shipping point and freight prepaid Accounts Receivable 500,000

PROBLEM 5
At the beginning of current year, Relentless Company reported the following balances: 1.) 6.)
Accounts receivable 600,000 Accounts Receivable 2,600,000 Sales Returns and Allowances 55,000
Allowance for doubtful accounts 25,000 Sales 2,600,000 Accounts Receivable 55,000
2.) 7.)
The following transactions took place in the current year. Cash 2,455,000 Sales Returns and Allowances 10,000
1. Sales - cash and credit 3,070,000 Accounts Receivable 2,455,000 Cash 10,000
2. Cash received from credit customers 2,455,000 3.) 8.)
3. Cash received from credit customers who took advantage of the 3/10, n / 30 credit terms (included in Sales Discount 45,000 Accounts Receivable 5,000
No. 2) 1,455,000 Accounts Receivable 45,000 Allowance for Doubtful Accounts 5,000
4. Accounts receivable written off as worthless 20,000 4.)
5. Cash received from cash customers 470,000 Allowance for Doubtful Accounts 20,000 Cash 5,000
6. Credit memo for sales return and allowances issued to credit customers 55,000 Accounts Receivable 20,000 Accounts Receivable 5,000
7. Cash refunds to cash customers 10,000 5.)
8. Recoveries of accounts written off, not included in above collections 5,000 Cash 470,000
Sales 470,000
Required:
a. Prepare journal entries to record the transactions. 2,500,000 Doubtful Accounts 50,000
b. Prepare the adjustment for doubtful accounts if the entity provides for doubtful accounts equal to 2% of net credit sales. 50,000 Allowance for Doubtful Accounts 50,000
c. Determine the net realizable value of accounts receivable at year-end? 625,000
60,000
PROBLEM 6 565,000
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 1.) Percent
uncollectible uncollectible
Not yet due 1,700,000 NIL 1,700,000 NIL 0
1-30 days past due 1,200,000 5 1,200,000 5% 60,000
31-60 days past due 100,000 25 100,000 25% 25,000
61-90 days past due 150,000 50 150,000 50% 75,000
Over 90 days past due 120,000 100 120,000 100% 120,000 Doubtful Accounts 345,000
Additional accounts to be written off 30,000 30,000 280,000 Allowance for Doubtful Accounts 345,000
2.)
Required: Beginning 170,000 4.)
1. What is the required allowance for doubtful accounts at year-end? Write off -235,000 3,270,000
2. How much would be the doubtful accounts expense for the current year? Additional -30,000 280,000
3. What is the adjusting entry for the doubtful accounts expense for the current year? Recovery 30,000 2,990,000
4. What is the net realizable value of accounts receivable at year-end? -65,000
345,000
PROBLEM 7
Sky Company provided the following information at year-end: 1.) Allowance for DA
2020 2019 Beg -15,000
Accounts receivable 880,000 800,000 Bad Debts -30,000
Allowance for doubtful accounts -10,000 -15,000 Write off 35,000
Allowance for sales returns -20,000 -25,000 End -10,000
Net realizable value 850,000 760,000 2.) AR
AR, Beg. 800,000
The entity reported doubtful accounts expense in 2020 of P30,000 and had products returned for Returns -15,000
credits totaling P15,000 at sale price. Gross sales for 2020 amounted to P6,150,000. Sales 6,150,000
Write off -35,000
What amount of accounts receivable was written during 2020? Collection -6,020,000
What amount was collected from customers during 2020? AR, End. 880,000
What amount was recorded as estimated sales returns during 2020? 3.) Allowance for SR
Beg -25,000
Sales Returns -15,000
Est. Sales Ret 20,000
End -20,000