NAME: Valdez, Nica Mae C.

SECTION: BSA42E1
SUBJECT: Review Auditing

PROBLEM NO. 1

A.

Gross Sales 750,000

Cash 150,000
Gross Credit Sales 600,000
Less: Discount 5,000 (245,000/.98 = 250,000 * .02)
Credit memos issued to
credit customers for sales 8,400
returns and allowan
Net Credit Sales 586,600

B.
Net Credit Sales 586,600
Allowance of 2% 2%
Allowance for BD 11,732

PROBLEM NO. 2

A.

Allowance for BD 20,000

Accounts Receivable 20,000

B.

Credit Sales 4,000,000

Cash 400,000
Net Credit Sales 3,600,000
Bad Debt Rate 1.5%
Bad Debt Expense 54,000

C.

Age Accounts Reci. Rate Amount

Less than 60 days 780,000 1% 7,800
61 - 90 days 230,000 5% 11,500
91 - 120 days 420,000 15% 63,000
Over 120 days 50,000 40% 20,000
Required Allowance 102,300
Allowance Balance 34,000
Adjustment 68,300

Allowance Bal.
Bad Debts Expense 54,000
Write-off 20,000
Allowance Bal. 34,000

PROBLEM NO. 3

A.

Accounts Receivable - Assigned 400,000

Cash 300,000
Sales 100,000
Less: Discounts 3,900
Accounts Receivable 96,100

B.

Notes Payable 300,000

Rate 16%
Time 1/12
Interest 4,000

C.

Collateral 300,000
Accounts Receivable 195,000 (191,100/.98)
Notes Payable 105,000
Interest Expense 1,400
Total Payment 106,400

PROBLEM 4

A.

Interest Income 270,000

Notes from Fur & Fixtures 28,692
Notes Reci from Sale of Land 77,000
Total Interest Income 375,692
B.

Notes Receivable from Sales 400,000

of Fur & Fixtures 0.797 318,800
Interest Income 318,800
12%
0.75 28,692
Net Receivable from Sales 347,492

Notes Receivable from Sale 1,400,000

of Land 451,250
Less: Interest 154,000 297,250
Sales 1,102,750

Non-Current Portion of Ar.

Sales from Furni & Fixtures 318,800

Sales from Land 1,102,750
Non-current Portion of Ar 1,421,550

C.

Notes Receivable from Sale

of Land 451,250
Less: Interest 154,000
Current Portion of Ar 297,250