PROBLEM 1

The adjusted trial balance of Tamia Company as of December 31, 2017 shows the following:
Debit Credit
Accounts receivable ₱1,000,000
Allowance for bad debts ₱40,000
Additional information:
 Cash sales of the company represents 10% of gross sales.
 90% of the credit sales customers do not take advantage of the 2/10, n/30 terms.
 It is expected that cash discount of ₱6,000 will be taken on accounts receivable outstanding at
December 31, 2018.
 Sales returns in 2018 amounted to ₱400,000. All returns were from charge sales.
 During 2018, accounts totaling ₱44,000 were written off as uncollectible; bad debt recoveries during the
year amounted to ₱3,000.
 The allowance for bad debts is adjusted so that it represents certain percentage of the outstanding
accounts receivable at year end. The required percentage at December 31, 2018 is 150% of the rate
used on December 31, 2017.
Based on the foregoing information, answer the following:
1. The accounts receivable as of December 31, 2018 is
2. The allowance for doubtful accounts as of December 31, 2018 is
3. The net realizable value of accounts receivable as of December 31, 2018 is
4. The doubtful accounts expense for the year 2018 is

PROBLEM 2
In connection with your examination of the financial statements of Macmod, Inc. for the year ended December
31, 2018, you were able to obtain certain information with regard to its accounts receivable:
a. The December 31, 2018 balance in the Accounts Receivable control accounts is ₱558,600.
b. An aging schedule of the accounts receivable as of December 31, 2018 is presented below:
Net debit Percentage to be applied after
Age balance corrections have been made
60 days and under ₱258,513 1 percent
61 to 90 days 204,735 3 percent
91 to 120 days 59,886 6 percent
Over 120 days 35,466 Definitely uncollectible, ₱6,300;
the remainder is estimated to be
25% uncollectible
c. The entries made affecting the Doubtful Accounts Expense account were:
 A debit on December 31 for the amount of the credit to the Allowance for Doubtful Accounts.
 A credit for ₱4,110 on November 30, 2018, and a debit to Allowance for Doubtful Accounts
because of a bankruptcy. The related sales took place on October 1, 2018.
d. The Allowance for Doubtful Accounts schedule is presented below:
Debit Credit Balance
January 1, 2018 ₱13,125
November 30, 2018 ₱4,110 9,015
December 31, 2018 (₱558,600 x 5%) ₱27,930 ₱36,945
e. There is a credit balance in one account receivable (61 to 90 days) of ₱7,260; it represents an advance on
a sales contract.
Based on the foregoing information, answer the following:
1. How much is the adjusted balance of Accounts Receivable as of December 31, 2018?
2. How much is the adjusted balance of the Allowance for Doubtful Accounts as of December 31, 2018?
3. How much is the Doubtful Accounts expense for the year 2018?
4. How much is the net adjustment to the Doubtful Accounts expense account?