ACC 124 – CONCEPTUAL FRAMEWORK AND INTERMEDIATE ACCOUNTING

ACCOUNTS RECEIVABLE

1. The following information is available regarding HARITH's receivables:

Due from customers on sales on account (net of
P20,000 credit balances) 150,000
Advances to employees 50,000
Advances to suppliers 30,000
Advances to employees 70,000
Advances to subsidiaries 10,000
Dividend receivable (10 mos.) 20,000
Due from customers on sales in exchange for 60,000
promissory notes
Subscription receivable (5 mos.) 40,000
Subscription receivable (15 mos.) 80,000
Accounts payable (net of P10,000 debit balances) 90,000
Loans receivable 75,000
Claims receivable 15,000

REQUIREMENTS:
(1) What is the total amount of trade receivables?
(2) What the total amount to be presented in the Statement of Financial Position as "Trade and Other
Receivables"?

2. On January 18, 2019, PHARSA CORP. sold goods on account to ODETTE INC. with a list price of P300,000 with
a term of 10, 15 2/10 n/30. The freight cost of the transaction amounted to P10,000. The account was paid on
January 25, 2019.

REQUIREMENTS: How much net cash did PHARSA CORP. received from ODETTE INC, on January 25, 2019
assuming the freight terms is:
(a) FOB Shipping Point, Freight Collect
(b) FOB Shipping Point, Freight Prepaid
(c) FOB Destination, Freight Prepaid
(d) FOB Destination, Freight Collect

3. For the current year operations of CLAUDE CORP., the following information was available:

January 1.2019 balances:

Accounts receivable 150,000
Allowance for doubtful accounts 80,000
Inventory 600,000

December 31, 2019 balances:

Inventory 400,000

Transactions occurred during 2019

Purchases (all on credit) 500,000
Gross Margin 250,000
Accounts receivable written off as worthless 30,000
Credit memo for sales returns 10,000
Notes received as payment for AR 40,000
Cash received from customers 500,000
ACC 124 – CONCEPTUAL FRAMEWORK AND INTERMEDIATE ACCOUNTING

The cash received includes the following:

Cash sales 200,000

Customers paying within 5-day discount period 145,500
Customers paying within 10-day discount period 98,000
Recovery of accounts written off 10,000
Customers paying beyond the discount period ?

Based on the CLAUDE's policy, 2% of the credit sales are estimated to be doubtful accounts expense. All credit
sales have a term of 3/5 2/10 n/30.

REQUIREMENT: How much is the net realizable value of accounts receivable on December 31, 2019?

3. On December 31, 2019, HAYABUSA CORP. provided the following information pertaining to its accounts

Days overdue Amount Probability of collection

0-30 days P2,000,000 0.99
31-60 days 1,500,000 0.90
61-120 days 800,000 0.60
Over 120 days 200,000 0.20
P4,500,000
receivable

On January 1, 2019, the allowance for uncollectible accounts was P450,000. During the year, HAYABUSA
written- off 80,000 worth and recovered P50,000 that had been written off in prior years. Sales, all on account,
during the year amounted to P10,000,000.

REQUIREMENTS: (1) Determine the amount of doubtful accounts expense during the year; (2) Determine the
ending balance of allowance for uncollectible accounts, using the following methods:

(a) 3% of credit sales method

(b) 12% of accounts receivable balance method
(c) Aging method