Exercise 1

Dreamer company reported the "Receivables" account with a debit balances of 2,000,000 at year end.
The allowance for doubtful accounts had a credit balance of P50,000 on same date.
Subsidiary details revealed the following:
Trade accounts receivable
Trade notes receivable
Installments receivable, normally due 1 year to two years
Customers' accounts reporting credit balances arising from sales return
Advance payments for purchase of merchandise
Customers' accounts reporting credit balances arising from advance payments
Cash advance to subsidiary
Claim from insurance entity
Subscription receivables due in 60 days
Accrued interest receivable

Required:
Prepare the compoun entry to reclassify the receivables account.
Compute the amount to be presented as "Trade and other receivables.
Indicate the classification and presentation of the other items excluded from "trade and other
receivables"
 Journal Entry

775,000 Accounts Receivables 775,000

100,000 Notes receivables 100,000
300,000 Installment Receivables 300,000
(30,000) Advance to suppliers 150,000
150,000 Advance to subsidiary 400,000
(20,000) Insurance receivable 15,000
400,000 Subscription Receivable 300,000
15,000 Accrued Interest receivable 10,000
300,000 Customers' credit balance 30,000
10,000 Advances from customers 20,000
2,000,000 Receivables 2,000,000

Trade and other receivables:

Accounts Receivables 775,000
Less: Allowance for doubtful accounts 50,000 725,000
Notes Receivables 100,000
Installement receivables 300,000
Advances to suppliers 150,000
Claim receivable 15,000
Subscription Receivable 300,000
Accrued interest receivable 10,000
Total Trade and other Receivables 1,600,000

Advances to subsidiary should be presented as non current asset and treated as long term investmen
Customers' credit balance and advcances from customers are classified as current liabilities
and included as part of "Trade and other Payables"
reated as long term investment.
as current liabilities
Exercise 2
Credible Company provided the following t-accounts summarizing the transactions affecting the accounts
receivables for the current year.