Marvelous Company Buenaventura; BSA1B

Required:
a. Credit sales (75%*5,000,000) 3,750,000
Doubtful accounts (2%*3,750,000) 75,000
Entry:
Doubtful accounts 75,000
Allowance for doubtful accounts 75,000

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

Allowance for doubtful accounts 50,000

c. Required allowance 80,000

Less: Credit balance of allowance 20,000
Doubtful accounts expense 60,000
Entry:
Doubtful accounts 60,000
Allowance for doubtful accounts 60,000

d. Required allowance (10%*5,000,000) 50,000

Less: Credit balance of allowance 20,000
Doubtful accounts expense 30,000
Entry:
Doubtful accounts 30,000
Allowance for doubtful accounts 30,000
4pts
Template Company Buenaventura; BSA1B

Requirement A Requirement B
Debit Credit
1) Accounts receivable 7,000,000 Doubtful accounts
Sales 7,000,000

2) Cash 2,450,000
Sales discount 50,000
Accounts receivable (2,450,000/98%) 2,500,000 Allowance for doubtful acco
Less: Allowance before adjus
3) Cash 3,900,000 Doubtful accounts expense
Accounts receivable 3,900,000

4) Allowance for doubtful accounts 30,000 Requirement C

Accounts receivable 30,000
Accounts receivable
5) Accounts receivable 10,000 Less: Allowance for doubtful
Allowance for doubtful accounts 10,000 Net realizable value

Cash 10,000
Accounts receivable 10,000

6) Sales return 70,000

Accounts receivable 70,000
Requirement B

Doubtful accounts 40,000

Allowance for doubtful accounts 40,000

Rate = 40,000/1,000,000 = 4%

Allowance for doubtful accounts 60,000

Less: Allowance before adjustment 20,000
Doubtful accounts expense 40,000

Requirement C

Accounts receivable 1,500,000

Less: Allowance for doubtful accounts 60,000
Net realizable value 1,440,000
8pts
Jocose Company Buenaventura; BSA1B

Requirement A Debit Credit Requirement B

1) Cash 800,000 Accounts receivable

Accounts receivable 7,200,000 Less:
Sales (800,000/10%) 8,000,000
Net realizable value
2) Cash 684,000
Sales discount (5%*720,000) 36,000
Accounts receivable (10%*7,200,000) 720,000

3) Cash 5,940,000
Accounts receivable 5,940,000

4) Sales discount 10,000

Allowance for sales discount 10,000

5) Sales return 80,000

Accounts receivable 80,000

6) Allowance for doubtful accounts 60,000

Accounts receivable 60,000

Accounts receivable 10,000

Allowance for doubtful accounts 10,000

Cash 10,000
Accounts receivable 10,000

7) Doubtful accounts 70,000

Allowance for doubtful accounts 70,000

Required allowance - December31 (5%*2,400,000) 120,000

Less: Allowance before adjustment 50,000
Doubtful accounts 70,000

Rate: 100,000/2,000,000 = 4%
Requirement B

Accounts receivable 2,400,000

Allowance for doubtful accounts 120,000
Allowance for sale discount 10,000 130,000
Net realizable value 2,370,000

10pts
Relentless Company Buenaventura; BSA1B

Requirement A Debit Credit Requirement B

1) Accounts receivable 2,600,000 Doubtful accounts

Sales (3,070,000-470,000) 2,600,000

2) Cash (2,455,000-1,455,000) 1,000,000 Credit sales

Accounts receivable 1,000,000 Less:

3) Cash 1,455,000 Net credit sales

Sales discount 45,000
Accounts receivable (1,455,000/97%) 1,500,000 Doubtful accounts (2,500,000*2%)

4) Allowance for doubtful accounts 20,000

Accounts receivable 20,000 Requirement C

5) Cash 470,000 Accounts receivable

Sales 470,000 Less:
Net realizable value
6) Sales return and allowance 55,000
Acounts receivable 55,000

7) Sales return and allowance 10,000

Cash 10,000

8) Accounts receivable 5,000

Allowance for doubtful accounts 5,000

Cash 5,000
Accounts receivable 5,000
Requirement B

Doubtful accounts 50,000

Allowance for doubtful accounts 50,000

Credit sales 2,600,000

Sales discount 45,000
Sales return and allowances 55,000 100,000
Net credit sales 2,500,000

Doubtful accounts (2,500,000*2%) 50,000

Requirement C

Accounts receivable 625,000

Allowance for doubtful accounts 60,000
Net realizable value 565,000
11pts
Nostalgia Company Buenaventura; BSA1B

Requirement A Requirement B

1) Acounts receivable 7,935,000 Required allowance (4%*1,250

Sales 7,935,000 Allowance before adjusment (6
Increase in allowance
2) Cash 4,410,,000
Sales discount 90,000 Rate (60,000/1,500,000 = 4%)
Accounts receivable (4,410,000*98%) 4,500,000
Requirement C
3) Cash 2,475,000
Sales discount 25,000 Accounts receivable - Decembe
Accounts receivable (2,475,000*99%) 2,500,000 Allowance for doubtfull accoun
Net realizable value
4) Accounts receivable 15,000
Allowance for doubtfull accounts 15,000

Cash 15,000
Accounts receivable 15,000

5) Cash 1,100,000
Accounts receivable 1,100,000
(8,000,000-4,410,000-2,475,000-15,000)

6) Allowance for doubtfull accounts 55,000

Accounts receivable 55,000

7) Sales return 30,000

Accounts receivable 30,000
Requirement B

Required allowance (4%*1,250,000) 50,000

Allowance before adjusment (60,000+15,000-55,000) 20,000
Increase in allowance 30,000

Rate (60,000/1,500,000 = 4%)

Requirement C

Accounts receivable - December 31 1,250,000

Allowance for doubtfull accounts -50,000
Net realizable value 1,200,000
Rampant Company Buenaventura; BSA1B

Requirement
Amount Percent of Required
Uncollectible Allowance
1) Not yet due 1,700,000 - -
1-30 days past due 1,200,000 5% 60,000
31-60 days past due 100,000 25% 25,000
61-90 days past due 150,000 50% 75,000
Over 90 days past due 120,000 100% 120,000
3,270,000 280,000

2) Allowance - Jan1 170,000

Recoveries 30,000
Doubtful accounts (squeeze) 345,000
Total 545,000
Less: Writeoff (235k+30k)) 265,000
Required allowance - Dec31 280,000

3) Doubtfull accounts expense 345,000

Allowance for doubtful accounts 345,000

4) Accounts receivable 3,270,000

Less: Allowance for doubtful accounts 280,000
Net realizable value 2,990,000
4pts
Savvy Company Buenaventura; BSA1B

Requirement:

Rate in 2019 = 170,000 - 10,000/10,000,000 = .016

Rate in 2020 = 258,000 - 20,000/14,000,000 = .017

1) Retained earnings (.016*1,250,000) 20,000

Allowance for doubtful accounts 20,000

2) Allowance - Jan1, 2020 20,000

Recoveries 2020 10,000
Doubtful accounts 92,000
Total 122,000
Less: Writeoff - 2020 88,000
Allowance - Dec. 31, 2020 (.017*2,000,000) 34,000

3) Accounts receivable - Dec 31, 2020 2,000,000

Less: Allowance for doubtful accounts 34,000
Net realizable value 1,966,000 3pts
Paramount Company Buenaventura; BSA1B

Requirement

1) Allowance - Jan 1, 2020 500,000

Doubtful accounts recorded (2%*20,000,000) 400,000
Recovery 50,000
Total 950,000
Less: Writeoff (300,000-100,000) 400,000
Allowance before adjustment 550,000

2) 5,000,000*5% 250,000
2,000,000*10% 200,000
1,000,000*25% 250,000
500,000-100,000*75% 300,000
Required allowance - Dec31,2020 1,000,000

3) Doubtful accounts 450,000

Allowance for doubtful accounts 450,000
(1,000,000 - 550,000) 3pts
Scion Company Buenaventura; BSA1B

Requirement:

1) Allowance - Jan 1, 2020 (1%*2,800,000) 28,000

2) Allowance - Jan 1, 2020 (1%*2,800,000) 28,000

Doubtful accounts recorded in 2020 (1%*3m) 30,000
Recovery 7,000
Total 65,000
Writeoff -25,000
Allowance before adjustment - Dec 31, 2020 38,000

3) 300k*1% 3,000
80k*5% 4,000
60k*20% 12,000
25k*80% 20,000
Required allowance - Dec 31, 2020 39,000

4) Doubtful accounts 1,000

Allowance for doubtful aacounts 1,000
(39,000-38,000)
4pts