PROBLEM 1 WRITE YOUR ANSWERS HERRE

Requirement 1

Accounts Receivable
To Sales
being sales on account mad

Cash
Discount Expense
To Accounts Receivable
being cash realized within 1

Cash
Discount Expense
Accounts Receivable

To Accounts Receivable
Allowance for doubtful accou
being reversal of earlier w

Cash
To Accounts Receivable
being cash recovered on ac

Cash
To Accounts Receivable
being cash received after di

Allowance for doubtful

To Accounts Receivable
Being accounts receivable w

Sales return
To Accounts Receivable
being sales return recorded
OUR ANSWERS HERRE

Requirement 1 Requirement 2

Accounts Receivable 7,935,000 Percentage of doubtful debts

To Sales 7,935,000 equals : 60,000/15,000,000 x
being sales on account made 4%

4,410,000 Accounts receivable closing b

Discount Expense 90,000 equal : 1,500,000 + 7,935,000
To Accounts Receivable 4,500,000 1,350,000
being cash realized within 10 days discount period

2,475,000 Requirement 3
Discount Expense 25,000
Accounts Receivable 2,500,000 Net realisable value of accou
(closing balance of accounts
To Accounts Receivable 15,000
Allowance for doubtful accounts 15,000
being reversal of earlier write off entry

15,000
To Accounts Receivable 15,000
being cash recovered on accounts written off

1,100,000
To Accounts Receivable 1,100,000
being cash received after disc. Period

Allowance for doubtful 55,000

To Accounts Receivable 55,000
Being accounts receivable written off

Sales return 30,000

To Accounts Receivable 30,000
being sales return recorded
Requirement 2

Percentage of doubtful debts based on accounts receivable

equals : 60,000/15,000,000 x 100

Accounts receivable closing balance

equal : 1,500,000 + 7,935,000 - 8,000,000-55,000-30,000

Requirement 3

Net realisable value of accounts receivable

(closing balance of accounts receivable - Allowance for doubtful debts)
1,350,000
-54,000
1,296,000
PROBLEM 2 WRITE YOUR ANSWERS HERRE

Requirement 1

Cash
To Sales

Discount Allowed
To Accounts Receivable
(5,940,000*(10/90)*5%

Cash Discount
To Accounts Receivables

Sales
To Accounts Receivables

Bad debts written-off

To Allowance for doubtful de

Accounts Receivable
To Allowance for doubtful de

Cash
Accounts Receivable
OUR ANSWERS HERRE

ent 1 Requirement 2

800,000 Balance in Accounts of Accounts Receivable

To Sales 800,000 Beg. Bal
Add: during year sales/adjustments
Discount Allowed 33,000 Less : collection/writeoffs/adjustments
To Accounts Receivable 33,000
(5,940,000*(10/90)*5%)

Cash Discount 10,000

To Accounts Receivables 10,000

80,000
To Accounts Receivables 80,000

Bad debts written-off 60,000

To Allowance for doubtful debts 60,000

Accounts Receivable 10,000

To Allowance for doubtful debts 10,000

10,000
Accounts Receivable 10,000
s Receivable
2,000,000
10,000
-133,000
1,877,000
PROBLEM 3 WRITE YOUR ANSWERS HERRE

REQUIRED:
1. What is the balance of allowance for doubtful accounts on December 31, 2020 before adjustment?
2. What is the required allowance for doubtful accounts on December 31, 2020?
3. What amount should be reported as doubtful accounts expense for the current year?
4. What is the year-end adjustment to the allowance for doubtful accounts on December 31, 2020?
5. What is the net realizable value of accounts receivable on December 31, 2020?
WRITE YOUR ANSWERS HERRE

Requirement 1
1,000,000.00
Allowance for doubtful 20000000 x 2% =  400,000.00
Bad debt provision - 200,000.00
(Written-off) 50,000.00
Recovery 1,250,000.00
Allowance for doubtful account 12/31/2020 before adjustment
Requirement 2

Adjustment Balance Uncollectible % Uncollectible

0-60 6,000,000.00 6,000,000.00 0.10 600,000.00
61-180 2,000,000.00 2,000,000.00 0.20 400,000.00
181-360 1,500,000.00 1,500,000.00 0.30 450,000.00
Over 360 500,000.00 - 100,000.00 400,000.00 0.50 200,000.00
Required Allowance for Doubtful Accounts 1,650,000.00
Requirement 3

Required Allowance for Doubtful Accounts 1,650,000.00

(Allowance for doubtful account 12/31/2020 before adjustment) - 1,250,000.00
Additional write off 100,000.00
Additional bad debt expense 500,000.00
Bad debt provision 400,000.00
Doubtful account expense 900,000.00
Requirement 4

Required Allowance for Doubtful Accounts 1,650,000.00

(Allowance for doubtful account 12/31/2020 before adjustment) - 1,250,000.00
Additional write off 100,000.00
Adjustment to allowance account 500,000.00

Requirement 5

AR balance
0-60 6,000,000.00
61-180 2,000,000.00
181-360 1,500,000.00
Over 360 400,000.00 9,900,000.00
Less: Allowance for doubtful account 12/31/2020 after adjustment - 1,650,000.00
Net realizable value of accounts receivable 8,250,000.00
PROBLEM 4 WRITE YOUR ANSWERS HER
WRITE YOUR ANSWERS HERRE

Requirement 1
Amount Percent uncollectible Required allowance
NIL
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

Requirement 2
Required Allowance 280,000
Less: Allowance for doubtful allowance -170,000
Doubtful accounts 110,000

Requirement 3
Required Allowance 280,000
Less: Allowance for doubtful allowance -170,000
Doubtful accounts 110,000

Requirement 4
Accounts Receivable 3,270,000
Allowance for doubtful accounts 280,000
Net realizable value 2,990,000
PROBLEM 5 WRITE YOUR ANSWERS HERRE

Requirement 1

Sales on account 2/30, n/30

Accounts receivable
Sales

Collections from customers wit

Cash
Sales Discount
Accounts Receivable

Collections from customers bey

Cash
Accounts Receivable

Accounts receivable written off

Allowance for doubtful account
Accounts Receivable

Recovery of accounts previous

Accounts receivable
Allowance for doubtful acc
Cash
Accounts Receivable

Credit memo for sales return

Sales returns
Accounts Receivable
OUR ANSWERS HERRE

Requirement 1

Sales on account 2/30, n/30

Accounts receivable 7,000,000
7,000,000

Collections from customers within the discount period .

2,450,000
Sales Discount 50,000
Accounts Receivable 2,500,000

Collections from customers beyond the discount period

3,900,000
Accounts Receivable 3,900,000

Accounts receivable written off as worthless

Allowance for doubtful accounts 30,000
Accounts Receivable 30,000

Recovery of accounts previously written off not included in the above collections .
Accounts receivable 10,000
Allowance for doubtful accounts 10,000
10,000
Accounts Receivable 10,000

Credit memo for sales return

Sales returns 70,000
Accounts Receivable 70,000
Requirement 2

Doubtful accounts 40,000

Allowance for doubtful accounts 40,000

Rate= 40,000/1,000,000= 4%
Allowance for doubtful accounts (1,500,000x4%) 60,000
Less : Allowance before adjustment 20,000
Doubtful accounts expense 40,000

Requirement 3

Accounts receivable 1,500,000

Allowance for doubtful accounts -60,000
Net realizable value 1,440,000
PROBLEM 6 WRITE YOUR ANSWERS HERRE

Requirement 1
a. Past experience indica
of credit sales may prov
Credit sales : 5,000,000
Uncollectible : 3,750,000

 Doubtful accounts expe

Allowance for doubtf

Requirement 2
b. One percent of gross
Uncollectible: 5,000,000

Doubtful accounts expe

Allowance for doubtf

Requirement 3
Doubtful Accounts Expe
To Allowance for Do

Requirement 4
Accounts receivable
Required : 500,000 x 10
Doubtful account expen
Allowance for doubtf
OUR ANSWERS HERRE

a. Past experience indicates that 75% of all sales are credit sales and that an average
of credit sales may prove uncollectible
Credit sales : 5,000,000 x 75 % = 3,750,000
Uncollectible : 3,750,000 x 2 % = 75,000 Doubtful

 Doubtful accounts expense  75,000

Allowance for doubtful accounts 75,000

b. One percent of gross sales may prove uncollectible

Uncollectible: 5,000,000 x 1% = 50,00

Doubtful accounts expense 50,000

Allowance for doubtful accounts 50,000

Doubtful Accounts Expense (Bad Debt Expense)  60,000

To Allowance for Doubtful Accounts 60,000

Accounts receivable 500,000

Required : 500,000 x 10% = 50,000
Doubtful account expense 50,000
Allowance for doubtful accounts 50,000
PROBLEM 7 WRITE YOUR ANSWERS HERRE
WRITE YOUR ANSWERS HERRE

Requirement 1

Allowance - Jan 1, 2014 (1%*2,800,000) 28,000

Requirement 2
Allowance - Jan 1, 2014 (1%*2,800,000) 28,000
Doubtful accounts recorded in 2015 (1%*3m) 30,000
Recovery 7,000
Total 65,000
Write off -27,000
Allowance before adjustment - Dec 31, 2015 38,000

Requirement 3
300,000x 1% 3,000

80,000x 5% 4,000

60,000x 20% 12,000

25,000x 80% 20,000

Ending bal. for DA after adjustments 39,000

Requirement 4
Doubtful Account Expense 1,000
Allownce for Doubtful Accounts 1,000
PROBLEM 8

REQUIRED:
1. What amount should be reported as allowance for doubtful accounts on December 31, 2020?
2. What amount should be reported as doubtful accounts expense for the current year?
3. What is the net realizable value of accounts receivable on December 31, 2020?
WRITE YOUR ANSWERS HERRE

Requirement 1

Days Account Amount

Outstanding

(A) (B)
30 days or less 3,000,000
Between 31 and 60 days 1,500,000
Between 61 and 180 days 1,200,000
Between 181 and one year 1,200,000
Over one year - to be written off 100,000
Total 7,000,000

Requirement 2
Provision for Allowance for doubtful account made from 2017 to 2019 1,175,000
[(6000000 + 8000000 + 9500000) * 5%]
Less: amount written off during 2017 to 2020 - 400,000
(0 + 80000 + 120000 + 200000)
Add: Recovery of Account written off during 2017 to 2020 175,000
(0 + 35000 + 40000 + 100000)
Unadjusted balance of allowances for doubtful account in 2020 950,000

Adjusted balance of allowances for doubtful account in 2020 1,450,000

Amount should be reported as doubtful accounts expense for current year 500,000
(1450000 - 950000)

Requirement 3
Balance of Accounts receivable on December 31, 2020 7,000,000
Less: Balance of allowances for doubtful account in 2020 -1,450,000
Net realizable value of Accounts receivable on December 31, 2020 5,550,000
 Estimated
Perecentage Estimated Uncollectible
Probablity of Collection Uncollectible Amount 2020

(C) (D)=(100%-C) (B)*(D)

95% 5% 150,000
80% 20% 300,000
75% 25% 300,000
50% 50% 600,000
0% 100% 100,000
$3.00 1,450,000