PROBLEM 1

Credible Co. provided the following T-account summarizing the transactions affecting the accounts receivable for the current y

ACCOUNTS RECEIVABLE
Jan. 1 balance 600,000
Charge sales 6,000,000
shareholders' subscription 200,000
Deposit on contract 120,000
Claims against common carrier for damages 100,000
IOUs from employees 10,000
Cash advance to affiliates 100,000
Advances to a supplier 50,000

REQUIRED:
A.Compute the correct amount of accounts receivable
B. Prepare one compound entry to adjust the accounts receivable
C. Compute the amount to be presented as "Trade and other receivables" under current asset
D. Indicate the classification and presentation of the other items
 WRITE YOUR ANSWERS HERRE

he transactions affecting the accounts receivable for the current year REQUIREMENT A

CCOUNTS RECEIVABLE
Collections from customers 5,300,000
Writeoff 35,000
Merchandise returns 40,000
Allowance to customer for shipping damages 25,000
Collections on carrier claims 40,000
Collections on subscriptions 50,000

receivables" under current asset

OUR ANSWERS HERRE

REQUIREMENT A REQUIREMENT B

Accounts Receivable, Jan. 1 600,000 Subscription receivable

Charge Sales 6,000,000 Deposit on contract
Total 6,600,000 Claim receivable
Less: Collection from customers 5,300,000 Advances to employees
Writeoff 35,000 Advances to affiliates
Merchandise returns 40,000 Advances to supplier
Allowances to customers 25,000 5,400,000 Accounts receivable
Accounts Receivable, Dec. 31 1,200,000
 REQUIREMENT C

eivable 150,000 Accounts receivable

act 120,000 Claim receivable
60,000 Advances to employees
ployees 10,000 Advances to supplier
ates 100,000 Total trade and other receivbales
plier 50,000
eceivable 490,000
 REQUIREMENT D

1,200,000 Other Items

60,000 Subscription receivable
10,000 Deposit on contract
50,000 Advances to affiliates
1,320,000
 Classification Presentation
Deducted from subscribed shared capital
Noncurrent Other noncurrent asset
Noncurrent Long-term Investment
PROBLEM 2 WRITE YOUR ANSWERS HERRE

On June 15, 2021, Romela Co. sold 100 air conditioning units. The sale REQUIREMENT 1
price for each unit is P45,000. All sales are subject to terms 2/10, n/30.
The entity used the gross method of accounting for accounts receivable.

REQUIRED:
1. Prepare the journal entry to record the sale.
2. Prepare the journal entry to record the receipt of payment assuming the
correct amount
3. Prepare was received
the journal entry toon June 25,
record the 2021.
receipt of payment assuming the
correct amount was received on July 10, 2021.
OUR ANSWERS HERRE

REQUIREMENT 1 REQUIREMENT 2

Accounts Receivable 4,500,000 Cash 4,410,000

Sales 4,500,000 Sales Discount 90,000
Accounts Receivable
 REQUIREMENT 3

Cash 4,500,000
Accounts Receivable 4,500,000
4,500,000
PROBLEM 3 WRITE YOUR ANSWERS HERRE

On February 14, 2021, Prime Co. sold 50 air conditioning units. The sale
price for each unit is P50,000. All sales are subject to terms 2/10, n/30.
The entity used the net method of accounting for accounts receivable.

REQUIRED:
1.
2. Prepare
Prepare the
the journal
journal entry
entry to
to record
record the
the sale.
receipt of payment assuming the correct
amount was received on February 24, 2021.
3. Prepare the journal entry to record the receipt of payment assuming the correct
amount was received on March 10, 2021.
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1 REQUIREMENT 2

Accounts Receivable 2,450,000

Sales 2,450,000
REQUIREMENT 2 REQUIREMENT 3

Cash 2,450,000
Accounts Receivable 2,450,000
REQUIREMENT 3

Cash 2,500,000
Accounts Receivable 2,450,000
Sales discount forfeited 50,000
PROBLEM 4 WRITE YOUR ANSWERS HER

Raven Co, started business in March 2020. Sales for the first year totaled P4,000,000.
The entity priced its merchandise to yield a 40% gross profit based on sales.
Industry statistics suggest that 10% of the merchandise sold to customers will be
returned.
The entity estimated sales returns based on the industry average. During the year
customers returned goods with sale price of P300,000.

REQUIRED
Prepare journal entries to record sales, sales returns and the year-end adjustments
for the estimated sales return.
WRITE YOUR ANSWERS HERRE

TO RECORD SALES TO RECORD SALES RETURNS

Accounts Receivable 4,000,000

Sales Revenue 4,000,000
TO RECORD SALES RETURNS TO RECORD YEAR-END ADJUSTEMENTS FOR EST

Sales return 300,000

Accounts Receivable 300,000
RECORD YEAR-END ADJUSTEMENTS FOR ESTIMATED SALES RETURNS

Sales return 100,000

Allowance for sales return 100,000

Estimated sales return (10% x 4,000,000) 400,000

Actual returns (300,000)
Balance 100,000
PROBLEM 5 WRITE YOUR ANSWERS HE

Valiant Co. reported the following analysis of current receivables at year-end

Trade accounts receivable 2,000,000

Allowance for doubtful accounts (100,000)
Claims against shipper of goods lost in transit in November 300,000
Selling price of unsold goods by Valiant on consignment at 150% of cost 600,000
and not included in the ending inventory
Security deposit of lease of warehourse 200,000
Total 3,000,000

REQUIRED:
1. What is the total amount reported as current trade and other receivables?
2. How are the other items excluded as trade and other receivables treated?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1 REQUIREMENT 2
Trade Accounts Receivable 2,000,000
Allowance for Doubtful Accounts (100,000)
Claim receivable 300,000
Total current trade and other receivables 2,200,000
REQUIREMENT 2

Selling price of unsold goods - excluded because the goodds are still unsold
Security deposit - Noncurrent receivable
PROBLEM 6

At year-end, Harem Company reported accounts receivable of P8,200,000 with the following analysis

Accounts known as worthless 100,000

Advance payments on purchase orders 400,000
Advances to subsidiary 1,000,000
Customers' accounts reporting credit balances arising from sales returns (600,000)
Trade accounts receivable 3,500,000
Subscription receivable
Trade installments due indue
receivable 30 days
1-18 months including unearned finance charges of 2,200,000
P50,000 850,000
Trade
Trade accounts
accounts receivable from officers
on which postdated dueare
checks currently
held and no entries were made on 150,000
receipts of checks 200,000

REQUIRED:
1. What is the total amount reported as current trade and other receivables?
2. How are the other items excluded as trade and other receivables treated?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1 REQUIREMENT 2
Trade accounts receivable 3,500,000
Advances to suppliers 400,000
Subscription receivable 2,200,000
Trade installment receivable 800,000
Trade accounts receivable from officers 150,000
Postdated checks on trade accounts 200,000
Total trade and other receivables 7,250,000
REQUIREMENT 2
Accounts known as worthless Not part of Accounts Receivable
Advances to subsidiary Separate account: Advanes to Subsidiary
Customers' accounts reporting credit balances Separate account: Payable (Current Liability)
PROBLEM 7 WRITE YOUR ANSWERS

Von Company provided the following data for the current year in relation to accounts receivable

Debits
Jan. 1 balance after deducting credit balance P30,000 530,000
Charge sales 5,250,000
Charge for goods out on consignment 50,000
Shareholders' subscriptions 1,000,000
Accounts written off but recovered 10,000
Cash paid to customer for January 1, credit balance 25,000
Goods shipped to cover for January 1 credit balance 5,000
Deposit on long-term contract 500,000
Claim against common carrier 400,000
Advances to supplier 300,000

Credits
Collections from customers including overpayment of P50,000 5,200,000
Writeoff 35,000
Merchandise returns 25,000
Allowance to customers for shipping damages 15,000
Collection on carrier claim 50,000
Collection on subscription 200,000

REQUIRED:
1. What is the total amount reported as accounts receivable on December 31?
2. What is the total amount reported as current trade and other receivables?
3. What is the total amount reported as noncurrent other receivables?
4. How are the other items excluded as receivables treated?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1
Accounts receivable, Jan. 1 560,000
Charge sales 5,250,000
Accounts written off but recovered 10,000
Total 5,820,000
Less: Collection from customers 5,150,000
Writeoff 35,000
Merchandise returns 25,000
Allowances to customers from shipping damages 15,000 5,225,000
Accounts Receivable - December 31 595,000

Computations:
Accounts Receivable - January 1 530,000
Credit balance of customer 30,000
Adjusted Accounts Receivable - January 1 560,000

Collections from customers 5,200,000

Less: Overpayement (50,000)
Adjusted Collections 5,150,000
REQUIREMENT 2 REQUIREMENT 3
Accounts Receivable 595,000
Claim Receivable 350,000
Advances to Supplier 300,000
Total trade and other receivables 1,245,000
REQUIREMENT 3 REQUIREMENT 4
Subscription receivable (1,000,000 - 200,000) 800,000
Deposit on contract 500,000
Total Long-term receivables 1,300,000
REQUIREMENT 4
Charge for goods out on consignment Inventory
Cash paid for customer credit balance Current Liability
Goods shipped credit balance Current Liability
PROBLEM 8

Wonder Co. provided the following transactions affecting accounts receivable during the current year:

Sales - cash and

Cash received credit
from credit customers, all of whom took advantage of the 5,900,000
discount feature of the credit terms 4/10, n/30 3,024,000
Cash received from cash customers 2,100,000
Accounts receivable written off as worthless 50,000
Credit memorandum issued credit customers for sales returns and allowances 250,000
Cash refunds
Recoveries ongiven to cash
accounts customers
receivable for sales
written off asreturns and allowances
uncollectible in prior periods 20,000
not included in cash received from credit customers 80,000

Balances on January 1
Accounts Receivable 950,000
Allowances for doubtful accounts 100,000

The entity provided for uncollectible accounts by crediting allowance for doubtful accounts
in the amount of P70,000 for the current year.

REQUIRED:
1. What is the total amount reported as accounts receivable on December 31?
2. What is the total amount reported as allowance for doubtful accounts on December 31?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1
Accounts receivable, Jan. 1 950,000
Credit Sales 3,800,000
Total 4,750,000
Less: Cash received from credit customers 3,024,000
Sales discounts 126,000
Accounts receivable written off 50,000
Sales returns and allowances 250,000 3,450,000
Accounts Receivable, Dec. 31 1,300,000

Total Sales 5,900,000

Cash received from cash customers - cash sales (2,100,000)
Credit Sales 3,800,000

Cash received from credit customers 3,024,000

Divided by: 0.96
Gross accounts receivable collected 3,150,000

Gross accounts receivable 3,150,000

Discount x 0.04
Sales Discount 126,000
REQUIREMENT 2
Allowance for doubtful accounts, Jan. 1 100,000
Recovery of accounts written off 80,000
Doubtful accounts expense for current year 70,000
Total 250,000
Less: Accounts written off (50,000)
Allowance for doubtful accounts, Dec. 31 200,000