RECEIVABLES

MC19 ANSWER B

Sales on account (450,000 x 1.4) P 630,000

Cash received from credit customers 585,000
Accounts receivable balance, end P 45,000

MC22 BANSWER B

Accounts receivable, beginning P 1,300,000

Credit sales for the year 5,400,000
Collections from customers, including recoveries of P25,000 (4,750,000)
Recoveries of accounts previously written off 25,000
Accounts written off (125,000)
Accounts receivable, ending P 1,850,000

MC25 DANSWER D

Allowance for bad debts balance after adjustment (3% x 1,000,000) P 30,000

MC27 DANSWER D

Allowance balance, end (270,000 – 250,000) P 20,000

Accounts written off 23,000
Uncollectible accounts recovery during the year (5,000)
Allowance balance, beginning (28,000)
Bad debts expense for the year P 10,000

MC32 BANSWER B

Allowance for uncollectible accounts, ending (500,000 – 480,000) P 20,000

Uncollectible accounts written off 7,500
Recoveries of accounts previously written off (3,700)
Allowance for uncollectible accounts, beginning (375,000 – 362,500) (12,500)
Uncollectible accounts expense for the year P 11,300

MC33 DANSWER D

Maturity value (50,000 x 10%) + 50,000 P 55,000

Discount (55,000 x 12% x 6/12) 3,300
Proceeds from discounting P 51,700
 MC34 C
ANSWER C

Present value of note (400,000 x 0.75) = 300,000

Interest income (300,000 x 10%) P 30,000

MC35 C
ANSWER C

Carrying amount, January 1 P 300,000

Amortization of discount 30,000
Carrying amount, December 31 P 330,000

MC36 C
ANSWER C

Interest revenue (1,940,000 x 13.4% x 1/12) P 21,663

MC37 BANSWER B

Interest receivable (2,000,000 x 12% x 1/12) P 20,000

MC38 CANSWER C

Amount of reduction in principal in 2023 P 659,895

Accrued interest at December 31, 2022 (242,605 x 6/12) 121,303
Total current receivable at December 31, 2022 P 781,198
(See complete amortization table below)

Date Annual payment Interest income Reduction in principal Balance

July 1, 2019 2,800,000
July 1, 2020 902,500 11% x 2,800,000=308,000 902,500-308,000=594,500 2,205,500
July 1, 2021 902,500 11% x 2,205,500=242,605 902,500-242,605=659,895 1,545,605
July 1, 2022 902,500 11% x 1,545,605=170,017 902,500-170,017=732,483 813,122
July 1, 2023 902,500 902,500-813,122=89,378 813,122 -0-

MC40 B
ANSWER B

Maturity value 500,000 + (500,000 x 8%) P 540,000

Discount (540,000 x 10% x 8/12) (36,000)
Proceeds from discounting P 504,000
 ANSWER B
MC41 B

Proceeds from factoring P 695,000

Proceeds from assignment 1,250,000 – (2% x 1,250,000) 1,225,000
Proceeds from factoring and assignment of accounts receivable P 1,920,000

MC46 BANSWER A

Carrying value of note P 695,000

Present value of restructured N/R
(4,000,000 x 0.83) 3,320,000
4,000,000 x 8% = 320,000 x 1.74 556,800 (3,876,800)
Impairment Loss P 1,623,200