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Sol. Man. - Chapter 4 - Accounts Receivable - Ia Part 1a
Sol. Man. - Chapter 4 - Accounts Receivable - Ia Part 1a
Sol. Man. - Chapter 4 - Accounts Receivable - Ia Part 1a
Accounts Receivable
4. C
5. Solution: 550,000 – FOB shipping point
6. C
7. Solutions:
1. Sale on account
Accounts receivable 87,840
Revenue 87,840
1. Sale on account
Accounts receivable (100K x 90%) 90,000
Revenue 90,000
Sales discount 2,160
Allowance for sales discount 2,160
2
3. Portion collected beyond the discount period
Cash on hand [(90K x 20%) or remaining balance] 18,000
Accounts receivable 18,000
*If the customer fully settles the account within 10 days, the customer
cannot take anymore the 1% discount that is available if he pays
within the 11th day and 15th day.
9. C
10. Solution:
Requirement (a):
(a)
Accounts receivable 250,000
Sales 250,000
(b)
Cash 220,000
Accounts receivable 220,000
(c)
Bad debt expense 30,000
Allowance for doubtful accounts 30,000
(d)
Allowance for doubtful accounts 15,000
Accounts receivable 15,000
(e)
Accounts receivable 8,000
Allowance for doubtful accounts 8,000
Cash 8,000
Accounts receivable 8,000
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Requirement (b):
Accounts receivable
beg. 120,000
Sales on account 250,000 220,000 Collections, excluding recoveries
15,000 Write-offs
Recovery 8,000 8,000 Collection on recovery
135,000 end.
Requirement (c):
Accounts receivable, end. 135,000
Allowance for bad debts, end. (32,000)
Carrying amount, end. 103,000
11. Solutions:
Requirement (a):
4
(2) Percentage of ending receivable
Requirement (b):
12. Solutions:
Requirement (a):
5
50,000
Requirement (b):
50,000 (see computations above)
Requirement (c):
Gross accounts receivable (500K + 200K + 100K) 800,000
Less: Allowance for bad debts (50,000)
Accounts receivable, net – end. 750,000
13. D
14. A
15. D
16. B
17. A
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PROBLEM 3: EXERCISES
1. Solution:
Accounts receivable
beg. 140,000
Credit sales 680,000 568,000 Collections, excluding recoveries
12,000 Write-off
240,000 end.
2. Solution:
Accounts receivable
beg. 150,000
Credit sales 600,000 410,000 Collections, excluding recoveries
9,000 Write-off
331,000 end.
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3. Solution:
Accounts receivable
beg. 80,000
Credit sales 150,000 120,000 Collections, excluding recoveries
10,000 Write-off
100,000 end.
4. Solution:
Accounts receivable
beg. -
Credit sales 360,000 124,000 Collections, including recoveries
22,000 Write-off
Recoveries 6,000
220,000 end.
5. Solution:
Accounts receivable
beg. 220,000
Credit sales 360,000 558,000 Collections, excluding recoveries
22,000 Write-off
- end.
6. Solutions:
(1)
Doubtful Accounts Expense
(3% x 128,000) - ₱1,220 .................. 2,620
Allowance for Doubtful Accounts ........... 2,620
(2)
Doubtful Accounts Expense ................... 5,374.50
Allowance for Doubtful Accounts ........... 5,374.50
7. Solutions:
(1)
Doubtful Accounts Expense ................... 35,700
Allowance for Doubtful Accounts ........... 35,700
[(3% x ₱590,000) + ₱18,000]
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(2)
Doubtful Accounts Expense ................... 32,025
Allowance for Doubtful Accounts ........... 32,025
[1.5% x (₱2,180,000 - ₱18,000 - ₱27,000)]
(3)
Doubtful Accounts Expense ................... 39,400
Allowance for Doubtful Accounts ........... 39,400
(₱21,400 + ₱18,000)
8. Solutions:
(1) Bad Debt Expense 4,670
Allowance for Doubtful Accounts 4,670
Sales ₱360,000
Sales returns and allowances 8,000
Net sales 352,000
Rate 2%
Bad debt expense ₱ 7,040
9. Solution:
9
Allowance for doubtful accounts
260,000 Jan. 1, 2002
30,000 Recoveries
W.O. (180K + 120K addt'l) 300,000 547,600 Adj. DAE (squeeze)
Dec. 31, 2002 (aging) 537,600
10. Solution:
Requirement (a):
10
Requirement (b):
OR
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PROBLEM 4: CLASSROOM ACTIVITIES
Solutions:
12
ACTIVITY #2: JOURNAL ENTRIES
Solutions:
2)
a. Accounts receivable 3,000
Allowance for bad debts 3,000
To reverse the previous write-off
Cash 3,000
Accounts receivable 3,000
To record the collection of accounts receivable
b. Cash 25,000
Accounts receivable 25,000
To record the collection of accounts receivable
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*Unadjusted credit sales 2,221,488
Add: SI#001101 20,000
Adjusted credit sales 2,241,488
Multiply by: 1%
Bad debts expense - 20x1 22,415
Accounts receivable
Unadjusted 480,000
(1) 20,000
(2a) 3,000 3,000
25,000 (2b)
(2c) 19,000 9,000 (4)
485,000 Adjusted
Adjusted 28,415
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Requirement (c): Carrying amount of accounts receivable
Solutions:
Requirement (a):
BDE - 20x2: (9,824,000 x 80% x 2.5%) = 196,480
BDE - 20x1: (2,670,000 x 80% x 2.5%) = 53,400
Requirement (b):
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ACTIVITY #4: AGING (PROVISION MATRIX)
Sincerely,
* Choice (a) is the best answer. Bad debts are computed on credit
sales (excluding cash sales).
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PROBLEM 6: MULTIPLE CHOICE - COMPUTATIONAL
1. B (450 x 2%) = 9
2. C 1,000 – 200 sales returns – 9 sales discount = 791
3. A (100,000 x 50% x 2%) = 1,000
4. C (100K + 611K – 591K – 45K) = 75,000
5. A
Solution:
Allowance for bad debts
10,800 Jan. 1
Bad debts expense (450K x
Write-offs 18,000 13,500 3%)
Dec. 31 6,300
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