Chapter 4. Problem 3

PROBLEM 3 SOLUTIONS
1.) Accounts recevable

Credit balance in customers accounts
Adjusted accounts receivable
Notes receivable (trade)
Total trade receivables
Notes receivable (non-trade) current portion only

Divedends receivable
Advance to suppliers (from debit bal. in account payable)
Total current non-trade receivables
Trade and other receivables
3.) A Total sales

Cash sales
Gross credit sales
Sales returns and discounts on credit sales
Net credit sales
Multiply by: percentage of net credit sales
Bad debt expense
B. Allowance for doubtful account

₱17,600.00
₱11,000.00 ₱2,200.00
₱21,780.00
12/31 ₱30,580.00
C. Accounts receivable, Dec. 31- gross

Allowance for doubtful accounts, Dec. 31
Accounts receivable, Dec. 31- net
5.) Percentage (Jan. 1, 20x4)

[(21k + 30k +45k) - (3k + 9k + 15k)] / (300k+480k+600k) = (96k-27k)/1 , 380k
Percentage = (69k / 1,380,000)=5%
Percentage (Dec. 31, 20x4)

(180k-33k) / 2,100,000
Percentage = (147k / 2,100,00)=7%
Allowance for doubtful account

₱15,000.00
₱84,000.00
₱6,000.00
₱105,000.00
12/31 ₱42,000.00
7.) A Net credit sales ₱4,200,000.00
Percentage credit sales 2%
Unadjusted bad debts expense ₱84,000.00
B.) Allowance for doubtful accounts

₱12,600.00
₱79,800.00 ₱18,900.00
₱84,000.00
12/31 Unadjusted bal ₱35,700.00
C. Days outstanding Receivable balance (a) Uncollectible (b)

0-60 ₱252,000.00 1%
61-120 ₱147,000.00 2%
Segregated account ₱42,000.00 5%
Over 120 ₱189,000.00 6%
Totals ₱630,000.00
D. Allowance for doubtful accounts

₱12,600.00
₱100,800.00 ₱18,900.00
₱88,200.00
12/31x1 bal ₱18,900.00
E. Gross accounts receivable Dec. 31 before adjustment

Additional write-offs at year-end
Gross accounts receivable Dec. 31 after adjustment
Allowance for doubtful accounts Dec. 31 adjusted
Accounts receivable - net Dec. 31
F. Dec. 31, 20x1 Allowance for doubtful accounts

Accounts receivable
to record the additional wrtie-offs
Dec. 31, 20x1 Bad debt expense

Allowance for doubtful accounts
to record the addiotional bad debts
₱160,000.00 2.) A
₱32,000.00
₱192,000.00
₱16,000.00
₱208,000.00
₱16,000.00
₱3,200.00
₱19,200.00
₱38,400.00
₱246,400.00
₱1,320,000.00
-₱220,000.00
₱1,100,000.00
-₱11,000.00
₱1,089,000.00
2%
₱21,780.00
B.)
4.) A
₱330,000.00
-₱30,580.00
₱299,420.00
k) = (96k-27k)/1 , 380k
12/31
B.
6.)
Required allowances (a)x(b) End Bal.
₱2,520.00
₱2,940.00
₱2,100.00
₱11,340.00
₱18,900.00
₱651,000.00
-₱21,000.00
₱630,000.00
-₱18,900.00
₱611,100.00
₱21,000.00
₱21,000.00
₱4,200.00
₱4,200.00
Acoount receivable ₱7,084.80
Revenue
to record the revenue on account
Invoice amount ₱7,200.00

Multiply by: ₱0.02
Total available discount ₱144.00
Multiply by: (new estimate) ₱0.40
Discount expected to be taken (new estimate) ₱57.60
Invoice amount ₱7,200.00

Less: discount expected to be taken (new estimate) -₱57.60
Transaction price ₱7,142.40
Less: transaction price (initial estimate) ₱7,084.80

Adjustment ₱57.60
Year - end adjusting entry

Accounts receivable ₱57.60
Revenue
Accounts receivable ₱7,142.40

Net revenue
Accounts receivables
₱40,000.00 ₱17,600.00
₱135,000.00 ₱70,000.00
₱102,500.00 Dec. 31
Accounts receivable, Dec. 31 ₱102,500.00

Percentage of receivables 5%
Allowance for doubtful accounts - Dec. 31 ₱5,125.00

₱5,000.00
₱2,500.00 ₱500.00
₱2,125.00
₱5,125.00
Accounts receivable, Dec. 31 - gross ₱102,500.00

Allowance for doubtful accounts Dec. 31 -₱5,125.00
Accounts receivable - Dec. 31 net ₱97,375.00
Days past due Receivable balances ( A ) Uncollectible ( B )
Not due - 0 to 15 days of age ₱350,000.00 n/a

Not due - 16 to 30 days of age ₱210,000.00 n/a
1-30 days past due ₱175,000.00 3%
31-60 days past due ₱140,000.00 10%
61-90 days past due ₱105,000.00 15%
91-120 days past due ₱70,000.00 35%
Total ₱1,050,000.00

₱28,000.00
₱6,000.00 ₱2,000.00
₱35,500.00
₱59,500.00
₱7,084.80
₱57.60
₱7,142.40
Required
allowances
(A)X(B)
-
-
₱5,250.00
₱14,000.00
₱15,750.00
₱24,500.00
₱59,500.00

Chapter 4. Problem 3

Uploaded by

Copyright:

Available Formats

Chapter 4. Problem 3

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 4. Problem 3

Uploaded by

Copyright:

Available Formats

PROBLEM 3 SOLUTIONS

1.) Accounts recevable

Notes receivable (non-trade) current portion only

3.) A Total sales

B. Allowance for doubtful account

C. Accounts receivable, Dec. 31- gross

5.) Percentage (Jan. 1, 20x4)

Percentage (Dec. 31, 20x4)

Allowance for doubtful account

B.) Allowance for doubtful accounts

C. Days outstanding Receivable balance (a) Uncollectible (b)

D. Allowance for doubtful accounts

E. Gross accounts receivable Dec. 31 before adjustment

F. Dec. 31, 20x1 Allowance for doubtful accounts

Dec. 31, 20x1 Bad debt expense

Invoice amount ₱7,200.00

Invoice amount ₱7,200.00

Less: transaction price (initial estimate) ₱7,084.80

Year - end adjusting entry

Accounts receivable ₱7,142.40

Accounts receivable, Dec. 31 ₱102,500.00

Allowance for doubtful accounts

Accounts receivable, Dec. 31 - gross ₱102,500.00

Days past due Receivable balances ( A ) Uncollectible ( B )

Not due - 0 to 15 days of age ₱350,000.00 n/a

Allowance for doubtful accounts

You might also like