6-4:

a.
Accounts Receivable
775,000
Notes Receivable
100,000
Instalment Receivable
300,000
Advances to suppliers
150,000
Advances to subsidiary
400,000
Claim receivable
15,000
Subscription receivable
300,000
Accrued interest receivable
10,000
Customers credit balances
30,000
Advances from customer 20,000
Receivables
2,000,000
b.
Accounts Receivable
775,000
Allowance for doubtful accounts (50,000)
Notes Receivable
100,000
Instalment Receivable
300,000
Advances to suppliers
150,000
Claim receivable
15,000
Subscription receivable
300,000
Accrued interest receivable
10,000
Total
1,600,000
c. Advances to subsidiary noncurrent; longterm investment.
Customers credit balances and advances from
customers are current liabilities.
6-5
a.
Accounts receivable January 1
600,000
Charge sales
6,000,000
Total
6,600,000
Less: Collection from customers
5,300,000
Writeof
35,000
Merchandise returns
40,000
Allowances to customers 25,000
5,400,000
Accounts receivable December 31
1,200,000
b.
Subscription receivable
150,000
Deposit in contract
120,000
Claim receivable
60,000
Advances to employees
10,000
Advances to affiliates
100,000
Advances to supplier
50,000
Accounts receivable
490,000
c.
Accounts receivable
1,200,000
Claim receivable
Advances to employees
Advances to suppliers

60,000
10,000
50,000

Total trade and other receivables

1,320,000
d. Subscription receivable deduct from
subscribed share capital.
Deposit on contract other noncurrent asset
Advance to affiliates noncurrent; long-term
investment

6-6
1. Accounts receivable
Sales

3,600,000
3,600,000

2. Notes receivable
400,000
Accounts receivable
400,000
3. Doubtful accounts
90,000
Allowance for doubtful accounts 90,000
4. Allowance for doubtful accounts
Accounts receivable
20,000

20,000

5. Sales return
Accounts receivable

15,000
15,000

6. Cash
Accounts receivable
2,450,000

2,450,000

7. Sales discount
45,000
Accounts receivable
8. Cash
Notes receivable

45,000

150,000
150,000

Account receivable
670,000
Less: Allowance for doubtful accounts
70,000
Net realizable value
600,000
6-7
FOB destination and freight collect
1. Accounts receivable
500,000
Freight Out
10,000
Sales
500,000
Allowance for freight charges
10,000
2. Cash
475,000
Sales discount
15,000
Allowance for freight charges
10,000
Accounts receivable
500,000
FOB destination and freight prepaid
1. Accounts receivable
500,000
Freight out
10,000

Sales
500,000
Cash
2. Cash
485,000
Sales discount
Accounts receivable
500,000

1
10,000

15,000

12
30

FOB shipping point and freight prepaid

1. Accounts receivable
510,000
Sales
500,000
Cash
10,000
2. Cash
495,000
Sales discount
Accounts receivable
510,000
6-8
1. Accounts receivable
Sales
2. Cash
1,470,000
Sales discount
Accounts receivable
1,500,000

15,000

4,000,000
4,000,000

30,000

Doubtful accounts
75,000
Allowance for doubtful accounts 75,000

c. Required allowance
80,000
Less: Credit balance of allowance
20,000
Doubtful account expense
60,000

d. Required allowance (10% x 500,000)

50,000
Less: Credit balance of allowance
20,000
Doubtful accounts expense
30,000
40,000
40,000

50,000
50,000

Accounts receivable
200,000
sales
200,000

12

Cash
196,000
Sales discount
4,000
Account receivable
200,000

30

Cash

50,000
Account receivable
50,000

Net Method
July

75,000

Doubtful accounts
60,000
Allowance for doubtful accounts 60,000

4. Sales return
100,000
Accounts receivable
100,000

6-9
Gross Method
July
1
Accounts receivable
Sales

6-10
a. Credit sales (75% x 5,000,000)
3,750,000
Doubtful accounts (2% x 3,750,000)

b. Doubtful accounts (1% x 5,000,000) 50,000

Allowance for doubtful accounts 50,000

3. Cash
1,000,000
Accounts receivable
1,000,000

5. Sales return
Allowance for sales return

Accounts receivable
49,000
Sales
49,000
Accounts receivable
196,000
sales
196,000
Cash
196,000
Account receivable
200,000
Cash
50,000
Account receivable
49,000
Sales discount forfeited
1,000

Doubtful accounts
30,000
Allowance for doubtful accounts 30,000
6-11
a.
Required allowance (5% x 600,000)
30,000
Add: debit balance in allowance account
10,000
Doubtful accounts expense
40,000
Doubtful accounts
40,000
Allowance for doubtful accounts 40,000
b. Required allowance
50,000
Add: debit balance in allowance account
10,000
Doubtful accounts expense
60,000
Doubtful accounts
60,000
Allowance for doubtful accounts 60,000

c. Doubtful accounts (2% x 1,900,000) 38,000

Allowance for doubtful accounts 38,000
6-12
a. Doubtful accounts (3% x 8,000,000)
240,000
Allowance for doubtful accounts
240,000
b. Doubtful accounts
170,000
Allowance for doubtful accounts
170,000
Allowance January 1
100,000
Doubtful accounts (squeeze)
210,000
Recovery
Total
Accounts written of
130,000
Allowance December 31
6-13
1. Accounts receivable
7,000,000
Sales
7,000,000
2. Cash
2,450,000
Sales discount
Accounts receivable
2,500,000

20,000
330,000
200,000

50,000

3. Cash
3,900,000
Accounts receivable
3,900,000
4. Allowance for doubtful accounts
30,000
Accounts receivable
30,000
5. Accounts receivable
10,000
Allowance for doubtful accounts 10,000
Cash
10,000
Accounts receivable
10,000
6. Sales return
70,000
Accounts receivable
70,000
Doubtful accounts
40,000
Allowance for doubtful accounts 40,000
Rate = 40,000/1,000,000 = 4%
Allowance for doubtful accounts, end
(4% x 1,500,000)
Less: allowance before adjustment
20,000
Doubtful accounts expense
40,000
Accounts receivable, end
1,500,000
Allowance for doubtful accounts
(60,000)
Net realizable value
1,440,000

60,000