CH 3 Vol 1 Answers

CHAPTER 3 - RECEIVABLES
Question no. 7
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
Accounts Receivable
Receivables from Employees (part of non-trade receivables) current assets
Advances to Suppliers Current assets or deduction from Accounts Payable to the same
supplier
Accounts Receivable
Customers Accounts with Credit Balances Current Liabilities
Cost of merchandise must be included in inventories
Accounts Receivable
Subscriptions Receivable current asset if collectible within 12 months; otherwise, noncurrent asset or deduction from Shareholders Equity
Other Non-Trade Receivables Current asset or non-current asset depending on terms of
payment
Advances to Suppliers Current Assets
Suppliers Accounts with Debit Balances or Advances to Suppliers Current assets
Accounts Receivable
Claims for Income Tax Refund Current Assets
Accounts Receivable, amount of loan presented separately as part of liabilities
Accounts Receivable
Not recognized anymore (for write off)
PROBLEMS
3-1
(Ginoo Company)
Gross Method
Dec.
10
19
26
31
Jan. 5
Accounts Receivable-First Lady

Sales
80,000 x 90% x 95%
68,400
Accounts Receivable-Mens World

Sales
50,000
Cash
Sales Discounts
67,032
1,368
Accounts Receivable-Teens Kingdom

Sales
40,000
Sales Discounts
Allowance for Sales Discounts
Cash
Allowance for Sales Discounts
68,400
50,000
68,400
40,000
800
800
39,200
800
40,000
Chapter 3 Receivables
Cash
Net Method
Dec. 9 Accounts Receivable-First Lady
Sales
68,400 x .0.98
10
19
26
31
50,000
50,000
67,032
67,032

Sales
49,000
Cash
67,032

Sales
39,200

Sales Discount Forfeited
49,000
67,032
39,200
1,000
1,000
2013
Jan. 5
9
Cash
Accounts Receivable Teens Kingdom
39,200
Cash
50,000
Allowance Method
Dec. 9 Accounts Receivable-First Lady
Allowance for Sales Discount
Sales
10
Dec. 19
26
31
Jan. 5
39,200
50,000
68,400
1,368
67,032

Sales
50,000
Cash
67,032
1,368

Sales
40,000

Sales Discount Forfeited
1,000
49,000
68,400
800
39,200
1,000
1,000
Cash
39,200
800
Cash
50,000
14
40,000
50,000
3-2.
(Colleco Supermarket)
June 1- Accounts Receivable Citibank
30 Accounts Receivable - BDO
Accounts Receivable Metrobank
Credit Card Service Charges
Sales
Cash
2,450,000
1,764,000
1,470,000
116,000
5,800,000
3,234,000
Accounts Receivable - Citibank

Accounts Receivable - Metrobank
3-3
(Colayco Company)
(1)
July 14 Allowance for Doubtful Accounts
Accounts Receivable-Moret Co.
31
Aug. 15
Nov.
Nov. 4
5
Nov. 9
Nov. 15
15
Dec. 13
2,156,000
1,078,000
10,000
10,000
Notes Receivable
Sales
12,000
Cash
Notes Receivable
Sales
20,000
15,000
Cash
Credit Card Service Charge
Sales
4% x 20,000 = 800
19,200
800
Accounts Receivable-P. Noval

Notes Receivable
Interest Revenue
12,000 x .10 x 90/360 = 300
12,300
12,000
35,000
20,000
12,000
300
Accounts Receivable-Credit Card

Sales
9,000
Cash
Credit Card Service Charge
Accounts Receivable-Credit Card
5% x 9,000 = 450
8,550
450
9,000
9,000

Allowance for Bad Debts
10,000
Cash
10,000
Cash
Notes Receivable
Interest Income
15,000 x 12% x 120/360 = 600
15,600
10,000
15
10,000
15,000
600
3-4.
(Format Company)
a.
b.
Carrying value of the note on January 1, 2012

P6,000,000 x 0.6575
Prevailing interest rate
Interest revenue for 2012
P3,945,000
15%
P 591,750
Carrying value, January 1, 2012

Add amortization of discount during 2010
Carrying value, December 31, 2010
P3,945,000
591,750
P4,536,750
(or simply P3,945,000 x 1.15 = P4,536,750)

3-5
(Formatted Company)
a.
b.
3-6.
Carrying value of the note on January 1, 2012 (P2 M x 2.2832)

Interest rate
P4,566,400
15%
P 684,960

4,566,400 + 684,960 2,000,000
Interest rate
P3,251,360
15%
P 487,704
Carrying value, January 1, 2012

Add amortization of discount during 2012
Less first payment of principal
P4,566,400
684,960
(2,000,000)
P3,251,360
(HRV Company)
Accrued interest at June 30, 2012 (3,000,000 1,000,000) x 12%
3-7.
P 240,000
(FX Corporation)
a.
2012
Jan. 1
Notes Receivable
Accumulated Depreciation
Loss on Sale of Equipment
Equipment
Discount on Notes Receivable
100,000
420,000
8,820
500,000
28,820
100,000 x 0.7118 = 71,180

80,000 71,180 = 8,820 Loss on Sale
100,000 71,180 = 28,820 Discount
b.
2012
Dec. 31
2013
Dec. 31

Interest Revenue
12% x 71,180
8,542

Interest Revenue
12% x (71,180 + 8,542)
9,567
8,542
9,567
16
2014
Dec. 31
Dec. 31
3- 8

Interest Revenue
12% x (71,180 +8,542 + 9,567)
(or 28,820 8,542 9,567)
10,711
10,711
Cash
Notes Receivable
100,000
100,000
(Pinky Pop Company)

The note is interest-bearing, but the rate of interest of the note is unreasonably lower than the
prevailing rate for similar obligation.
Thus, the present value of the note is determined as
follows:
2.5 M + (5% x 7.5 M) = 2,875,000
x
0.8929
P2,567,088
2.5 M + (5% x 5.0 M) = 2,750,000
x
0.7972
2,192,300
2.5 M + (5% x 2.5 M) = 2,625,000
x
0.7118
1,868,475
Total
P6,627,863
or
a.
2.5 M x 2.4018
(5% x 7.5 M) x
(5% x 5.0 M) x
(5% x 2.5 M) x
Total
Amortization Table
Date
01/01/12
12/31/12
12/31/13
12/31/14
P6,004,500
334,838
199,300
88,975
P6,627,613
0.8929
0.7972
0.7118
Payment of
Principal
Interest
Paid
2,500,000
2,500,000
2,500,000
375,000
250,000
125,000
Interest
Revenue
795,344
545,785
281,008*
Amortization
of Discount
420,344
295,785
156,008*
Carrying
Value
6,627,863
4,548,207
2,343,992
------------
*rounded off
b.
Journal entries
2012
Jan. 1
Notes Receivable
Gain on Sale of Land
Land
7,500,000 6,627,863 = 872,137 Discount
6,627,863 6,000,000 = 627,863 Gain
7,500,000
Cash
Interest Revenue
Notes Receivable
2,875,000
420,344
Cash
Interest Revenue
Notes Receivable
2,750,000
295,785
872,137
627,863
6,000,000
2012
Dec. 31
795,344
2,500,000
2013
Dec. 31
545,785
2,500,000
17
2014
Dec. 31
3-9
Cash
Interest Revenue
Notes Receivable
2,625,000
156,008
281,008
2,500,000
Pinky Pip Company

The note is interest-bearing, but the rate of interest of the note is unreasonably higher than the
prevailing rate for similar obligation.
Thus, the present value of the note is determined as
follows:
2.5 M + (18% x 7.5 M) = 3,850,000
2.5 M + (18% x 5.0 M) = 3,400,000
2.5 M + (18% x 2.5 M) = 2,950,000
Total
or
2.5 M
(18%
(18%
(18%
Total
x 2.4018
x 7.5 M) x
x 5.0 M) x
x 2.5 M) x
x
x
x
0.8929
0.7972
0.7118
P3,437,665
2,710,480
2,099,810
P8,247,955
P6,004,500
1,205,415
717,480
320,310
P8,247,705*
0.8929
0.7972
0.7118
*Difference in the computations is due to rounding off

b.
Amortization Table
Date
01/01/10
12/31/10
12/31/11
12/31/12
Payment of
Principal
2,500,000
2,500,000
2,500,000
Interest
Paid
1,350,000
900,000
450,000
Interest
Revenue
989,755
646,525
315,765*
Amortization
of Premium
360,245
253,475
134,235*
Carrying
Value
8,247,955
5,387,710
2,634,235
------------
*Difference is due to rounding off

b.
Journal entries
2012
Jan. 1
Notes Receivable
Premium on Notes Receivable
Gain on Sale of Land
Land
8,247,955 7,500,000 = 747,955 Premium
8,247,955 6,000,000 = 2,247,955 Gain
7,500,000
747,955
Cash
Interest Revenue
Notes Receivable
3,850,000
Cash
Interest Revenue
Notes Receivable
3,400,000
2,247,955
6,000,000
2012
Dec. 31
360,245
989,755
2,500,000
2013
Dec. 31
18
253,475
646,525
2,500,000
2014
Dec. 31
3-10
Cash
Interest Revenue
Notes Receivable
2,950,000
134,235
315,765
2,500,000
(Word Company)
Bad Debts Expense
Allowance for Bad Debts
P52,000
50,000
Required balance in allowance account:

(2% x 500,000) + (10% x 200,000) + (20% x 100,000)
Reported balance in allowance before adjustments (debit)
Required adjustment charged to bad debts expense
3-11
(Edit Company)
3-12
Allowance for Uncollectible Accounts, beg

Recovery of accounts previously written off
Uncollectible accounts expense for 2012
Allowance for Uncollectible Accounts, end
Accounts written off during 2012
(Toyota Products, Inc.)
a.
b.
c.
d.
e.
f.
g.
P50,000
2,000
P52,000
P 6,000
3,000
48,000
(12,000)
P45,000
Accounts receivable
Sales
4,800,000
Cash
Sales discounts
Accounts receivable
3,920,000
80,000
4,800,000
4,000,000
Allowance for uncollectible accounts

Accounts receivable
20,000
20,000
Accounts receivable
Allowance for uncollectible accounts
5,000
Cash
Accounts receivable
5,000
Notes receivable
Accounts receivable
25,000
Cash
Notes payable-bank
400,000
Cash
Accounts receivable
150,000
Notes payable-bank
Cash
150,000
5,000
5,000
25,000
400,000
150,000
150,000
Uncollectible Accounts Expense

Allowance for Uncollectible Accounts
19
65,000
65,000
9,000 20,000 + 5,000 = 6,000 debit

59,000 + 6,000 = 65,000
h.
Interest receivable
Interest revenue
250
250
25,000 x 12% x 30/360
Accounts receivable
(450,000+4,800,0004,000,00020,00025,000150,000)
Less Allowance for uncollectible accounts
Net realizable value/Net amortized cost
3-13
P1,055,000
59,000
P 996,000
(Rav, Inc.)
Accounts Receivable, December 31, 2011
Sales on account during 2012
Cash received from customers
Cash discounts allowed: (882,000 98%) x 2%
(495,000 99%) x 1%
Recovery of accounts written off
Accounts written off as worthless
Credit memoranda for sales returns
P 337,000
1,500,000
(1,600,000)
P18,000
5,000
Allowance for Uncollectible Accounts, December 31, 2011

Recovery of accounts written off
Impairment loss on receivables
23,000)
3,000
( 11,000)
(
6,000)
P 200,000
P 12,000
3,000
( 11,000)
15,000
P 19,000
The computation may also be conveniently done through T-accounts, as follows:

Accounts Receivable
Balance, beg
Sales on account
Recovery
337,000
1,500,000
3,000
Total
Balance, end
1,840,000
200,000
Collections
Cash discounts
Write off
Sales returns
Total
1,600,000
23,000
11,000
6,000
1,640,000

Write off
11,000
Total
11,000
20
Balance, beg
Recovery
Impairment
Total
Balance, end
12,000
3,000
15,000
30,000
19,000
3-14
(Revo Company)
Allowance for Uncollectible Accounts, January 1, 2012
Accounts written off
Additional accounts written off
before adjustments (debit balance)
Required balance in Allowance account based on aging:
(5% x 240,000) + (25% x 20,000) + (50% x 30,000) + (90% x 24,000)
Required adjustment/Doubtful Accounts Expense for 2012
Less Allowance for Uncollectible Accounts
Net amortized cost
3-15
3-16
P 34,000
( 47,000)
7,000
( 6,000)
(P 12,000)
53,600
P65,600
P654,000
53,600
P600,400
(Adventure Company)
a.
Accounts Receivable, January 1
Sales during 2012
Cash collected from customers
Note received in settlement of an account
Accounts Receivable, December 31
P 1,200,000
10,000,000
(8,720,000)
20,000
( 400,000)
( 100,000)
P 2,000,000
Accounts Receivable, December 31

Past due accounts
Current accounts/Not yet past due
P 2,000,000
600,000
P 1,400,000
Required balance in Allowance for Uncollectible Accounts:

20% x 600,000 past due accounts
5% x 1,400,000 current accounts
Total
P 120,000
70,000
P 190,000
b.
Allowance for Uncollectible Accounts, end

Accounts written off during the year as worthless
Allowance for Uncollectible Accounts, beg
Uncollectible Accounts Expense for year 2012
P 190,000
100,000
(
20,000)
(
60,000)
P 210,000
c.
Accounts Receivable
Less Allowance for Uncollectible Accounts
Net amortized cost
P 2,000,000
190,000
P1,810,000
(Maynilad Company)
Alternative 1
Carrying value (10 M + 1.2 M)
Present value of future cash inflows:
Principal due on 12/31/14
9M x 0.7972
Interest for 2 years
9M x 8% = 720,000; 720,000 x 1.6901
Impairment loss
21
11,200,000
P7,174,800
1,216,872
8,391,672
P2,808,328
Entry: Restructured Notes Receivable

Impairment Loss Receivables
Notes Receivable
Interest Receivable
Alternative 2
Carrying value (10 M + 1.2 M)
2M + (8% x 10M) = 2,800,000 x 0.8929
2M + (8% x 8M) = 2,640,000 x 0.7972
2M + (8% x 6M) = 2,480,000 x 0.7118
2M + (8% x 4M) = 2,320,000 x 0.6355
2M + (8% x 2M) = 2,160,000 x 0.5674
Impairment loss
Notes Receivable
Interest Receivable
8,391,672
2,808,328
10,000,000
1,200,000
11,200,000
2,500,120
2,104,608
1,765,264
1,474,360
1,225,584
9,069,936
2,130,064
9,069,936
2,130,064
10,000,000
1,200,000
Alternative 3
Carrying value
10M x 0.7972
7,972,000
Interest due on 12/31/13 and 12/31/14
10M x 9% = 900,000; 720,000 x 1.6901 1,521,090
Impairment loss
Notes Receivable
9,493,090
506,910
Cash
Interest Receivable
1,200,000
10,000,000
9,493,090
506,910
10,000,000
1,200,000
Alternative 4
Carrying value
11.2M x 0.797193876
Interest due on 12/31/11 and 12/31/12
11.2M x 12% = 1,344,000;
1,344,000 x 1.6900510
Impairment loss
11,200,000
8,928,572
2,271,428
11,200,000
---------
No entry for the restructuring

3-17
(Kate Company)
(a)
Cash
Notes Payable National Bank
750,000
750,000
22
(b)
Current assets:
Trade and other receivables (including P900,000 of accounts
pledged as collateral for a loan with National Bank)
P2,000,000
Current liabilities:
Notes Payable National Bank
Interest Payable
3-18
P 750,000
7,500
(Lexus Company)
Amount of the loan
Less service charge (2% x 750,000)
Net proceeds from the assignment of accounts receivable
Sept. 1
Sept 1-30
P625,000
15,000
P610,000
Accounts Receivable Assigned

Accounts Receivable
800,000
Cash
Finance Charges
Notes Payable Pacific Bank
634,000
16,000
Cash
300,000
800,000
650,000

Sept. 30

Interest Expense (650,000 x 12% x 1/12)
Cash
Oct. 1-31

Cash
300,000
300,000
6,500
306,500
10,000
10,000
400,000

Oct.
31
31
400,000

Interest Expense (325,000 x 12% x 1/12)
Cash
350,000
3,500
Accounts Receivable
100,000
353,500
100,000
3-19. Accord Company)

July 1
1
21

Accounts Receivable
4,000,000
Cash
Finance Charges
Notes Payable Bank
5% x 3,200,000 = 160,000
3,040,000
160,000
Sales Returns and Allowances

23
4,000,000
3,200,000
150,000
150,000
July
31
Aug 1
15
Cash
Sales Discounts
2% x 2,500,000 = 50,000
2,450,000
50,000
Notes Payable Bank

Interest Expense
Cash
3,200,000 x 0.18 x 1/12 = 48,000
2,500,000
48,000

Aug 31
Cash
Sept 1
2,500,000
2,548,000
50,000
50,000
1,000,000
1,000,000
Notes Payable Bank

Interest Expense
Cash
700,000 x 0.18 x 1/12 = 10,500
700,000
10,500
Accounts Receivable
300,000
710,500
300,000
4,000,000 150,000 2,500,000 - 50,000 1,000,000 = 300,000
3 20 (Fortune Company)
Oct. 1
1
31
Nov. 30
3-21

Accounts Receivable
2,000,000
Cash
Finance Charges
Notes Payable
1,440,000
90,000
2,000,000
1,500,000
Interest Expense
Notes Payable
15,000
985,000
Notes Payable
Interest Expense
Cash
515,000
5,150
279,850
(Highlander Company)
a.
Sept. 1
Cash
Receivable from Factor
Loss from Factoring
Accounts Receivable
800,000 x 10% =80,000 Loss;
720,000 x 5% = 36,000 withheld
Nov. 1
Cash
Finance Charges
Notes Payable-Bank
1,000,000
800,000
684,000
36,000
80,000
800,000
582,000
18,000
600,000
24
3% x 600,000 = 18,000
b.
Dec. 31
3-22
10,400
(a)
Selling price of Accounts Receivable 90% x P1,200,000=

Factors holdback (6% x 1,080,000)
Cash received from factoring
P1,080,000
( 64,800)
P1,015,200
(b)
Accounts receivable assigned balance (500,000 350,000)

Balance of notes payable to the bank
400,000 (350,000 4,000)
Equity on assigned accounts
P 150,000
P
( 54,000)
96,000
Face value of note discounted

Interest for the full term April 30 August 28
(50,000 x 9% x 120/360)
Maturity value
Discount 51,500 x 10% x 88/360
Proceeds
50,000
P
P
1,500
51,500
(1,259)
50,241
( Edsamail Company)
(a)
Maturity value = 500,000 + (500,000 x .08) = 540,000

Proceeds = 540,000 (540,000 x .10 x 5/12) = 517,500
(b)
Interest Receivable
Interest Revenue
500,000 x 8% x 7/12
Cash
Loss on Sale of Notes Receivable
Notes Receivable
Interest Receivable
3-24
10,400
(Hiku Company)
(c)
3-23

(190,000 + 1,000,000) x 2% = 23,800 13,400
a.
23,333
23,333
517,500
5,833
500,000
23,333
Proceeds 90,000 (90,000 x 0.15 x 20/365)

Cash
= P89,260
89,260
Liability on Discounted Notes Receivable

b.
Maturity value 75,000 + (75,000 x 0.15 x 90/365)

Proceeds 77,774 (77,774 x 0.15 x 50/365)
Interest Receivable
Interest Revenue
89,260
= P77,774
= P76,176
1,233
1,233
Cash
76,176
25
76,176
c.
Maturity value 60,000 + (60,000 x 0.16 x 120/365)

Proceeds 63,156 (63,156 x 0.15 x 45/365)
Interest Receivable
Interest Revenue
= P63,156
= P61,988
1,973
1,973
Cash
61,988
3-25
61,988
(Crosswind Corporation)
2012
Feb. 1
Notes Receivable
Accounts Receivable
April 1
60,000
Interest Receivable
Interest Revenue
60,000 x 16% x 2/12
Nov. 2
30
3-26
60,000
1,600
1,600
Cash
60,000 + (60,000 x .16 x 9/12) = 67,200
67,200 (67,200 x .15 x 7/12) = 61,320
61,320

Interest Expense
Notes Receivable
Interest Receivable
61,320
280
Accounts Receivable (67,200 + 1,500)

Cash
68,700
61,320
60,000
1,600
68,700
(Explorer Company)
(a)
Accounts receivable factored
Purchase price
Purchase price of accounts receivable factored
Less amount withheld as protection against returns and allowances
5% x 1,700,000
Net cash received from the factored accounts
(b)
Cash
Loss on Factoring
Accounts Receivable
P2,000,000
85%__
P 1,700,000
85,000_
P1,615,000
1,615,000
85,000
300,000
Sales Returns
30,000
Cash
55,000
26
2,000,000
30,000
30,000
3-27. (Nature Company)

(a)
1/1/12
(a)
(b)
(c)
(d)
Interest Revenue
Interest Receivable
2,800
2,800
Accounts Receivable
Sales
2,800,000
Cash
Sales Discounts
Accounts Receivable (2,218,000 180,000)*
Accounts Receivable Assigned *
2,200,000
18,000
2,800,000
Notes Receivable
Accounts Receivable
250,000
Cash
Notes Receivable
Interest Revenue
216,000
Interest Receivable
Interest Revenue
2,800
250,000
200,000
16,000
2,800
Cash
(e)
(f)
(g)
(h)
(i)
2,038,000
180,000
41,400
41,400

Accounts Receivable
300,000
Cash
Finance Charges
Notes Payable
222,000
18,000
300,000
240,000
Accounts Receivable
Notes Receivable
Interest Revenue
15,900

Accounts Receivable
12,000
15,000
900
Notes Payable
Interest Expense
Cash
12,000
180,000
3,000
183,000

20,000 (12,000 12,000 )
(j)
Interest Receivable
Interest Revenue
*See item (h)
20,000
20,000
3,200
3,200
27
(b)
Trade and Other Receivables
P876,900
Trade and Other Receivables include the following:

Notes Receivable
Accounts Receivable Unassigned
Accounts Receivable - Assigned
Interest Receivable
Total
MULTIPLE CHOICE QUESTIONS
P135,000
815,900
120,000
6,000
( 20,000)
P876,900
Theory
MC1
MC2
MC3
MC4
MC5
A
A
C
A
A
MC6
MC7
MC8
MC9
MC10
A
C
C
C
A
MC11
MC12
MC13
MC14
MC15
C
A
D
A
C
Problems
MC16
MC17
MC18
MC19
MC20
B
A
MC21
MC22
MC23
MC24
D
D
C
D
MC25
MC26
B
B
MC27
MC28
MC29
MC30
A
B
D
MC31
MC32
MC33
C
C
450,000 x 1.4 = 630,000

630,000 585,000 = 45,000
105,000 x .90 = 94,500 (Invoice price/Gross)
94,500 x .98 = 92,610 (net price)
200,000 x .90 x .95 = 171,000 (Invoice price/Gross)
171,000 x .97 = 165,870 (Net)
1,300,000 + 5,400,000 + 25,000 4,750,000 125,000 = 1,850,000
360,000 80% = 450,000
450,000 + 80,000 430,000 = 100,000
75,000 + 45,000 = 120,000
3% x 1,000,000 = 30,000
30,000 + 8,000 = 38,000
270,000 250,000 = 20,000
20,000 + 23,000 28,000 5,000 = 10,000
17,500 30,500 + 8,050 + 200,000 = 15,050
480,000 + 2,400,000 2,560,000 17,600 36,800* + 4,800 = 270,400
*1,411,200 .98 = 1,440,000 x 2% = 28,800
792,000 .99 = 800,000 x 1% = 8,000
28,800 + 8,000 = 36,800
19,200 + 4,800 17,600 = 6,400
5% x 270,400 = 13,520
13,520 6,400 = 7,120
(5% x 600,000) + (10% x 40,000) + 14,000 = 48,000
20,000 + 7,500 12,500 3,700 = 11,300
50,000 + (50,000 x 10%) = 55,000
55,000 (55,000 x .12 x 6/12) = 51,700
400,000 x .75 = 300,000
300,000 x 10% = 30,000
300,000 + 30,000 = 330,000
1,940,000 x 13.4% x 1/12= 21,663
28
MC34
MC35
MC36
B
B
MC37
MC38
MC39
MC40
D
C
A
D
2,000,000 x 12% x 1/12 = 20,000 (Note: The difference between interest income of
P21,333 and interest receivable of 20,000 is debited to Discount on Notes Receivable).
500,000 x 8% x 4/12 = 13,333
1,250,000 - (2% x 1,250,000)} = 1,225,000
1,225,000 + 695,000 = 1,920,000
(500,000 + 2,200,000) x 3% = 81,000; 81,000 32,000 = 49,000
550,000 [(500,000 x 0.8265) + (40,000 x 1.7355)] = 67,380
5,500,000 [(4,000,000 X .83) + (320,000 X 1.74)] = 1,623,200
(4,000,000 X .83) + (320,000 X 1.74) = 3,876,800
29

CH 3 Vol 1 Answers

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

CH 3 Vol 1 Answers

Загружено:

Авторское право:

Доступные форматы

CHAPTER 3 - RECEIVABLES

Accounts Receivable-First Lady

Accounts Receivable-Mens World

Accounts Receivable-Teens Kingdom

Accounts Receivable-Mens World

Accounts Receivable-Teens Kingdom

Accounts Receivable-Mens World

Accounts Receivable-Mens World

Accounts Receivable-Teens Kingdom

Allowance for Sales Discount

Accounts Receivable - Citibank

Accounts Receivable-P. Noval

Accounts Receivable-Credit Card

Accounts Receivable-Moret Co.

Carrying value of the note on January 1, 2012

Carrying value, January 1, 2012

(or simply P3,945,000 x 1.15 = P4,536,750)

Carrying value of the note on January 1, 2012 (P2 M x 2.2832)

Carrying value, December 31, 2012

Carrying value, January 1, 2012

100,000 x 0.7118 = 71,180

Discount on Notes Receivable

Discount on Notes Receivable

Discount on Notes Receivable

(Pinky Pop Company)

Pinky Pip Company

*Difference in the computations is due to rounding off

*Difference is due to rounding off

Required balance in allowance account:

Allowance for Uncollectible Accounts, beg

Allowance for uncollectible accounts

Uncollectible Accounts Expense

9,000 20,000 + 5,000 = 6,000 debit

25,000 x 12% x 30/360

Allowance for Uncollectible Accounts, December 31, 2011

The computation may also be conveniently done through T-accounts, as follows:

Allowance for Uncollectible Accounts

Accounts Receivable, December 31

Required balance in Allowance for Uncollectible Accounts:

Allowance for Uncollectible Accounts, end

Entry: Restructured Notes Receivable

No entry for the restructuring

Accounts Receivable Assigned

Accounts Receivable Assigned

Notes Payable Pacific Bank

Allowance for Uncollectible Accounts

Accounts Receivable Assigned

Notes Payable Pacific Bank

3-19. Accord Company)

Accounts Receivable Assigned

Sales Returns and Allowances

Notes Payable Bank

Allowance for Uncollectible Accounts

Notes Payable Bank

4,000,000 150,000 2,500,000 - 50,000 1,000,000 = 300,000

Accounts Receivable Assigned

Selling price of Accounts Receivable 90% x P1,200,000=

Accounts receivable assigned balance (500,000 350,000)

Face value of note discounted

Maturity value = 500,000 + (500,000 x .08) = 540,000

Uncollectible Accounts Expense

Proceeds 90,000 (90,000 x 0.15 x 20/365)

Liability on Discounted Notes Receivable