PROBLEM 1

Credible Co. provided the following T-account summarizing the transactions affecting the accounts receivable for the current y

ACCOUNTS RECEIVABLE
Jan. 1 balance 600,000
Charge sales 6,000,000
shareholders' subscription 200,000
Deposit on contract 120,000
Claims against common carrier for damages 100,000
IOUs from employees 10,000
Cash advance to affiliates 100,000
Advances to a supplier 50,000

REQUIRED:
A.Compute the correct amount of accounts receivable
B. Prepare one compound entry to adjust the accounts receivable
C. Compute the amount to be presented as "Trade and other receivables" under current asset
D. Indicate the classification and presentation of the other items
 WRITE YOUR ANSWERS HERRE

he transactions affecting the accounts receivable for the current year REQUIREMENT A

Accounts Receivable, Jan. 1

CCOUNTS RECEIVABLE Charge Sales
Collections from customers 5,300,000 Total
Writeoff 35,000 Less:
Merchandise returns 40,000
Allowance to customer for shipping damages 25,000
Collections on carrier claims 40,000
Collections on subscriptions 50,000 Accounts Receivable, Dec. 31

r receivables" under current asset

YOUR ANSWERS HERRE

REQUIREMENT A REQUIREMENT B
Debit
Accounts Receivable, Jan. 1 600,000 Subscription Receivable 150,000
Charge Sales 6,000,000 Deposit on contract 120,000
6,600,000 Claim Receivable 60,000
Collection from customers 5,300,000 Advances to employees 10,000
Writeoff 35,000 Advances to affiliates 100,000
Merchandise Returns 40,000 Advances to supplier 50,000
Allowance to customers 25,000 -5,400,000 Accounts Receivable
Accounts Receivable, Dec. 31 1,200,000
 REQUIREMENT C
Credit
Trade and Other Receivables
Accounts Receivable 1,200,000
Claim Receivable 60,000
Advances to employees 10,000
Advances to suppliers 50,000
Total Trade and Other Receivables 1,320,000
490,000
REQUIREMENT D
Classification Presentation
Subscription Receivable deducted from subscribed shared capital
Deposit on contract Noncurrent Assets other noncurrent asset
Advances to affiliates Noncurrent Assets long-term investment
PROBLEM 2 WRITE YOUR ANSWERS HERRE

On June 15, 2021, Romela Co. sold 100 air conditioning units. The sale REQUIREMENT
price for each unit is P45,000. All sales are subject to terms 2/10, n/30.
The entity used the gross method of accounting for accounts receivable. 1

REQUIRED:
1. Prepare the journal entry to record the sale. 2
2. Prepare the journal entry to record the receipt of payment assuming the
correct amount was received on June 25, 2021.
3. Prepare the journal entry to record the receipt of payment assuming the
correct amount was received on July 10, 2021.

3
NSWERS HERRE

Debit Credit
Accounts Receivable 4,500,000
Sales 4,500,000

Cash 4,410,000

Sales Discount 90,000

Accounts Receivable 4,500,000

Cash 4,500,000
Accounts Receivable 4,500,000
PROBLEM 3 WRITE YOUR ANSWERS HERRE

On February 14, 2021, Prime Co. sold 50 air conditioning units. The sale
price for each unit is P50,000. All sales are subject to terms 2/10, n/30.
The entity used the net method of accounting for accounts receivable.

REQUIRED:
1. Prepare the journal entry to record the sale.
2. Prepare the journal entry to record the receipt of payment assuming the correct
amount was received on February 24, 2021.
3. Prepare the journal entry to record the receipt of payment assuming the correct
amount was received on March 10, 2021.
WRITE YOUR ANSWERS HERRE

REQUIREMENT
Debit Credit
1 Accounts Receivable 2,450,000
Sales 2,450,000

2 Cash 2,450,000

Accounts Receivable 2,450,000

3 Cash 2,500,000
Accounts Receivable 2,450,000
Sales discount forfeited 50,000
PROBLEM 4 WRITE YOUR ANSWERS HER

Raven Co, started business in March 2020. Sales for the first year totaled P4,000,000. Journal entry to re
The entity priced its merchandise to yield a 40% gross profit based on sales.
Industry statistics suggest that 10% of the merchandise sold to customers will be
returned.
The entity estimated sales returns based on the industry average. During the year
customers returned goods with sale price of P300,000.
Journal entry to re
REQUIRED
Prepare journal entries to record sales, sales returns and the year-end adjustments
for the estimated sales return.

Computation:
TE YOUR ANSWERS HERRE

Journal entry to record the sales Journal entry to record the sales returns
Debit Credit
Accounts Receivable 4,000,000 Sales return
Sales 4,000,000 Accounts Receivable

Journal entry to record the year-end adjusments for the estimated sales returns
Debit Credit
Sales return 100,000
Allowance for sales return 100,000

Computation:
Estimated sales return (4,000,000 x 0.10) 400,000
Actual returns -300,000
Balance 100,000
ecord the sales returns
Debit Credit
300,000
300,000
PROBLEM 5 WRITE YOUR ANSWERS HE

Valiant Co. reported the following analysis of current receivables at year-end

Trade accounts receivable 2,000,000

Allowance for doubtful accounts (100,000)
Claims against shipper of goods lost in transit in November 300,000
Selling price of unsold goods by Valiant on consignment at 150% of cost 600,000
and not included in the ending inventory
Security deposit of lease of warehourse 200,000
Total 3,000,000

REQUIRED:
1. What is the total amount reported as current trade and other receivables?
2. How are the other items excluded as trade and other receivables treated?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1 REQUIREMENT 2

Trade accounts receivable 2,000,000 Seeling price of unsold goods - excluded because the go
Allowance for uncollectible accounts -100,000 The cost of consigned goods of 400,000 should be in inv
Claim receivable 300,000 Security deposit is a noncurrent receivable
Total trade and other receivables 2,200,000
oods - excluded because the goods are still unsold
ods of 400,000 should be in inventory
current receivable
PROBLEM 6

At year-end, Harem Company reported accounts receivable of P8,200,000 with the following analysis

Accounts known as worthless 100,000

Advance payments on purchase orders 400,000
Advances to subsidiary 1,000,000
Customers' accounts reporting credit balances arising from sales returns (600,000)
Trade accounts receivable 3,500,000
Subscription receivable due in 30 days 2,200,000
Trade installments receivable due 1-18 months including unearned finance charges of
P50,000 850,000
Trade accounts receivable from officers due currently 150,000
Trade accounts on which postdated checks are held and no entries were made on
receipts of checks 200,000

REQUIRED:
1. What is the total amount reported as current trade and other receivables?
2. How are the other items excluded as trade and other receivables treated?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1

Trade accounts receivable 3,500,000

Advances to suppliers 400,000
Subscription receivable 2,200,000
Trade installment receivable 800,000
Trade accounts receivable from officers 150,000
Postdated checks on trade accounts 200,000

Total Trade and Other Receivables 7,250,000

REQUIREMENT 2

Accounts known as worthless No longer part of AR

Advances to subsidiary Separate account: Advances to Subsidiary (NCA)
Customers' accounts reporting credit balances Separate account: Payables (CL)
PROBLEM 7 WRITE YOUR ANSWERS

Von Company provided the following data for the current year in relation to accounts receivable

Debits
Jan. 1 balance after deducting credit balance P30,000 530,000
Charge sales 5,250,000
Charge for goods out on consignment 50,000
Shareholders' subscriptions 1,000,000
Accounts written off but recovered 10,000
Cash paid to customer for January 1, credit balance 25,000
Goods shipped to cover for January 1 credit balance 5,000
Deposit on long-term contract 500,000
Claim against common carrier 400,000
Advances to supplier 300,000

Credits
Collections from customers including overpayment of P50,000 5,200,000
Writeoff 35,000
Merchandise returns 25,000
Allowance to customers for shipping damages 15,000
Collection on carrier claim 50,000
Collection on subscription 200,000

REQUIRED:
1. What is the total amount reported as accounts receivable on December 31?
2. What is the total amount reported as current trade and other receivables?
3. What is the total amount reported as noncurrent other receivables?
4. How are the other items excluded as receivables treated?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1

Accounts Receivable, Jan. 1 560,000

Charge Sales 5,250,000
Accounts written off but recovered 10,000
Total 5,820,000
Less: Collection from customers 5,150,000
Writeoff 35,000
Merchandise returns 25,000
Allowances to customers for shipping damages 15,000 -5,225,000
Accounts Receivable, Dec. 31 595,000

Computations:

Accounts Receivable, Jan. 1 530,000

Credit balance of customer 30,000
Adjusted Accounts Receivable, Jan. 1 560,000

Collections from customers 5,200,000

Less: Overpayment -50,000
Adjusted Collections 5,150,000
REQUIREMENT 2 REQUIREMENT 3

Accounts Receivable 595,000 Subscription receivable (1,000,000 - 200,000)

Claim Receivable (400,000 - 50,000) 350,000 Deposit on contract
Advances to Supplier 300,000 Total Long-term receivables
Total Trade and Other Receivables 1,245,000
 REQUIREMENT 4

800,000 Charge for goods out of consignment

500,000 Cash paid to customer credit balance
1,300,000 Goods shipped credit balance
PROBLEM 8

Wonder Co. provided the following transactions affecting accounts receivable during the current year:

Sales - cash and credit 5,900,000

Cash received from credit customers, all of whom took advantage of the
discount feature of the credit terms 4/10, n/30 3,024,000
Cash received from cash customers 2,100,000
Accounts receivable written off as worthless 50,000

Credit memorandum issued credit customers for sales returns and allowances 250,000
Cash refunds given to cash customers for sales returns and allowances 20,000
Recoveries on accounts receivable written off as uncollectible in prior periods
not included in cash received from credit customers 80,000

Balances on January 1
Accounts Receivable 950,000
Allowances for doubtful accounts 100,000

The entity provided for uncollectible accounts by crediting allowance for doubtful accounts
in the amount of P70,000 for the current year.

REQUIRED:
1. What is the total amount reported as accounts receivable on December 31?
2. What is the total amount reported as allowance for doubtful accounts on December 31?
WRITE YOUR ANSWERS HERRE

REQUIREMENT 1

Accounts receivable, Jan. 1 950,000

Credit Sales 3,800,000

Total 4,750,000
Less: Cash received from credit customers 3,024,000

Sales discounts 126,000

Accounts receivable written off 50,000

Sales returns and allowances 250,000 -3,450,000

Accounts Receivable, Dec .31 1,300,000

Computations:

Total Sales 5,900,000

Cash received from cash customers - cash sales -2,100,000
Credit Sales 3,800,000
REQUIREMENT 2

Allowance for doubtful accounts, Jan. 1 100,000

Recovery of accounts written off 80,000

Doubful accounts expense for current year 70,000
Total 250,000

Accounts written off -50,000

Allowance for doubtful accounts, Dec. 31 200,000