PROBLEM 13: On January 1, 2011, the balance of accounts receivable

of Asmara Company was P5,000,000 and the allowance for doubtful

accounts on same date was P800,000. The following data were gathered:

Credit Recoverie

Year sales Writeoffs s

P

10,000,00 P P

2008 0 250,000 20,000

14,000,00

2009 0 400,000 30,000

16,000,00

2010 0 650,000 50,000

25,000,00

2011 0 1,100,000 145,000

Doubtful accounts are provided for as percentage of credit sales. The

accountant calculates the percentage annually using the experience of 3

years prior to the current year.

1. How much should be reported as 2011 doubtful accounts expense?

PROBLEM 14: Astana Corporation has the following data relating to

accounts receivable for the year ended December 31, 2011:

Accounts receivable, 1/1/2011 P

 480,000
Allowance for doubtful

accounts, 1/1/2011 19,200

Sales during the year, all on 2,400,00

account, terms 2/10, 1/15, n/60 0

Cash received from customers 2,560,00

during the year 0

Accounts written off during the

year 17,600

An analysis of cash received from customers during the year revealed that

P1,411,200 was received from customers availing the 10 day discount

period, P792,000 from customers availing the 15 day discount period,

P4,800 represented recovery of accounts written off and the balance was

received from customers paying beyond the discount period. The

allowance for doubtful accounts is adjusted so that it represents certain

percentage of the outstanding accounts receivable at year end. The

required percentage at December 31, 2011 is 125% of the rate used

during December 31, 2010.

2. The doubtful accounts expense for the year ended December 31,

2011 is:
PROBLEM 15: Asuncion, Inc. reported the following balances after

adjustments at the end of 2011 and 2010:

12/31/20 12/31/20

11 10
Total accounts P P

receivable 105,000 96,000

Net accounts

receivable 102,000 94,500

During 2011, Asuncion wrote off customer accounts totaling P3,200 and

collected P800 on accounts written off in previous years.

3. Asuncion’s doubtful accounts expense for the year ending December

31, 2011 is:

PROBLEM 16: Athens, Inc. sells to wholesalers on terms of 2/15, net

30. Athens, Inc. has no cash sales but 50% of its customers take

advantage of the discount. Athens Inc. uses the gross method of

recording sales and trade receivable. An analysis of Athens, Inc.’s trade

receivables balances at December 31, 2011 revealed the following:

Uncollectibl
Age Amount
e
0-15 days P 100,000 None
16-30 days 60,000 5%
31-60 days 5,000 10%
 Over 60 days 2,500 P 2,000

4. In its December 31, 2011 balance sheet, what amount should Athens,

Inc. report as allowance for discounts?