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

Allowance for doubtful accounts

₱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

Allowance for doubtful accounts

₱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