RECEIBALE PROBLEMS – CHAPTER 3 1.
When examining the accounts of JUAN Co. it is ascertained that balances relating to both r eceivables and payables are included in the single controlling account called receivables control that has a debit balance of P4,850,000. An analysis of the make-up of this account revealed that following: DEBIT
Accounts receivable -customer
CREDIT
P7,800,000
Accounts receivable -officers
500,000
Debit balances- creditors
300,000
Postdated checks from customer
400,000
Subscription receivable
800,000
Accounts payable for merchandise
4,500,000
Credit balance for customer accounts
200,000
cash received in advance from cu stomers for goods not yet shipped
100,000
Expected bad debts 150,000 After further analysis of the aged accounts receivable, it is determined that the allowance for bad debts accounts should be P200,000. P200,000. What amount amount should should be reported reported as “trade “trade and other other receivables” receivables” under current asset? 2.
The following information is available for BULAGA Co. relating to 2012 operations: Accounts receivable, January 1
P4,000,000
Accounts receivable collected
8,400,000
Cash sales
2,000,000
Inventory, January 1
4,800,000
Inventory, December 31
4,400,000
Purchases
8,000,000
Gross margin on Sales What is the balance of accounts receivable on December 31, 2012? 3.
4,200,000
The following transaction affecting the accounts receivable of JOSE took place during the year ended December 31, 2012: Cash (cash and credit)
P5,900,000
Cash received from credit customers, all of whom took advantage of the discount of comoany's credit terms 4/10, n/30
3,024,000
Cash received from cash customers
2,100,000
Accounts receivable written off
50,000
Credit Memo issued to credit customers for sales return and allowances
250,000
Cash refunds given to cash customers for sales returns and allowances
20,000
Recoveries on accounts receivable written off in prior year (not included in cash amount stated above) The following balances were taken from January, 1 2012 statement statement of financial position: Accounts receivable
4.
80,000
950,000
Allowance for bad debts 100,000 The entity provided for bad debt losses by crediting allowance for bad debts in the amount of P70,000 for the current year. a. What is the balance of Accounts receivable on December 31, 2012? b. What is the balance of allowance for bad debts on December 31, 2012? WALLY reported the following balances after adjustment at the end of 2012 and 20 11: 12/31/2012
12/31/2011
Accounts receivable
P5,250,000
P4,800,000
Net realizable realizable value
5,100,000
4,725,000
During 2012, WALLY wrote off accounts totaling to P1,600,000 and collected P40,000 on accounts written off in previous years. What amount should be recognized as bad debts expense for the year ended December 31, 2012? 5.
All of VGS Co. sales are made on credit b asis, the following information is available for the current year: Allowance for bad debts - January 1
180,000
Sales
9,500,000
Sales return and allowances
800,000
Sales discounts
200,000
Accounts written off as bad debts 200,000 VGS provides for bad d ebts expense at the rate of 3% of net sales. What is the allowance for bad debts at year end? 6.
HARD Company sells directly to retail customers. On January 1, 2012 the balance of the accounts receivable was P2,070,000 while the balance of allowance was a credit of P78,000. The following data were gathered: Credit Sales
Write-offs
Recoveries
2009
11,100,000
260,000
22,000
2010
12,250,000
295,000
37,000
2011
14,650,000
300,000
36,000
15,000,000 310,000 42,000 2012 Bad debts are provided as percentage of credit sales. The accountant calculates the percentage annually by using the experience of three years prior to the current year. What amount should be reported as allowance for bad debts on December 31, 2102? 7.
On January 1, 2012, PANGIT MO Inc. sold land with carrying amount of P1,500,000 in exchange for 9-month, 10% not with face value of P2,000,000. The 10% rate properly reflects the time value of money for this type of n ote. On April 1, 2012, PANGIT discounted the n ote with recourse. The bank discount rate is 12%. The discounting transaction is accounted for as a secured borrowing. On October 1, 2012, the maker dishonored the note. PANGIT paid the bank the maturity value of the no te plus protest fee of P10,000. On December 31, 2012, PANGIT collected the dishonored note in full p lus 12% annual interest on the total amount due. a. What is the amount of proceeds received by PANGIT MO from discounting the note? b. What is the interest expense o be recognized by PANGIT MO o f April 1, 2012? c. What is the amount collected by PANGIT MO from the customer on December 31, 2102?
8.
On January 1, 2012, VICE GANDA sold goods to JESSICA SOHO. JESSICA signed a n oninterest bearing note requiring payment of P600,000 annually for 7 years. The first payment was made on January 1, 2012. The prevailing market rate of interest for this type of note at date of issuance was 10%. a. What amount should be recorded as sales revenue in January 1, 2012? b. How much should be recorded as unearned interest income? c. Entry to record the sale on January 1, 2012?