443728971 Receivables Quiz ARNR AK pdf PDF

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Problem 1. For the year ended 2018, the following selected items are included the trial balance of Black Bulls Company.Accounts receivable 5,000,000 trade Advances to shareholders, collectible w/ in 3 months 500,000 non-trade CA Customer’s account credit balance 50,000 current liab Allowance for dou...

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Problem 1. For the year ended 2018, the following selected items are included the trial balance of Black Bulls Company. Accounts receivable Advances to shareholders, collectible w/ in 3 months Customer’s account credit balance Allowance for doubtful accounts Receivables from officers, collectible w/ in 5 months Claims for rebates and tax refunds Dividends receivable Accrued interest on bond investments Advances to affiliates Notes receivable Creditor’s account debit balance Advances to directors, due in 15 months Subscription receivable, collectible w/in 7months Advances from suppliers Accrued interest on notes receivable Accrued rent income

5,000,000 500,000 50,000 200,000 200,000 50,000 100,000 20,000 50,000 1,000,000 10,000 100,000 50,000 800,000 50,000 10,000

trade non-trade CA current liab trade, deduct non-trade, CA non-trade, CA non-trade, CA non-trade, CA non-trade, NCA trade non-trade, CA non-trade, NCA non-trade, CA current liab trade non-trade, CA

Based on the information provided above, compute for the following: 1. Trade Receivables under current asset – 5,850,000 2. Non-Trade Receivables under current asset – 940,000 3. Trade and other receivables – 6,790,000 Problem 2. Provided below are the receivable accounts and basis of measurement of each account of “Asta Company”: Face Value Present Value Current Cost Realizable value Short-term receivables 1,000,000 1,100,000 1,200,000 900,000 Accounts Receivable 500,000 600,000 700,000 400,000 Interest bearing long-term receivables 2,000,000 2,100,000 2,200,000 2,100,000 Non-interest-bearing long-term receivables 3,000,000 2,800,000 3,100,000 2,900,000 Initially, at what should the following items be measured? 4. Short-term receivables – 1,000,000 5. Accounts Receivable – 500,000 6. Interest-bearing long-term receivables – 2,000,000 7. Non-interest-bearing long-term receivables – 2,800,000

Problem 3. Prepare the journal entries for each transaction using the two methods in accounting doubtful accounts expense Transaction Allowance Method Direct Write-off Method 8. Accounts of 30,000 DAE 30,000 No entry are considered ADA. 30,000 doubtful of collection

9.

10

The accounts subsequently discovered to worthless uncollectible

are

ADA 30,000 AR. 30,000

DAE 30,000 AR. 30,000

AR

AR

be or

The same accounts that are previously written off are unexpectedly recovered or collected

30,000 ADA 30,000

Cash 30,000 AR. 30,000

30,000 DAE 30,000

Cash 30,000 AR 30,000

Problem 4. F Company provided the following information relating to current operations: Accounts receivable, January 1 Accounts receivable collected Cash sales Inventory, January 1 Inventory, December 31 Purchases Gross margin on sales

4,000,000 8,400,000 2,000,000 4,800,000 4,400,000 8,000,000 4,200,000

11. What is the balance of accounts receivable on December 31? 6,200,000

Problem 5. Katherine Company provided the following information for the current year:

Accounts receivable Allowance for doubtful accounts Sales Cash collected from customers

January 1 1,200,000 60,000

December 31

8,000,000 7,000,000

The cash collections included recovery of P10,000 from a customer whose account had been written off as worthless in prior year. During the year, it was necessary to recognize doubtful accounts expense of P100,000 and write off worthless customers’ accounts of P30,000. At year-end, a customer settled an account by issuing a 12%, six month note for P400,000. 12. What is the net realizable value of accounts receivable on December 31? 1,640,000 Problem 6. M Company provided the following accounts abstracted from the unadjusted trial balance at yearend:

Accounts Receivable Allowance for doubtful accounts Net credit sales

Debit 5,000,000 40,000

Credit

20,000,000

The entity estimated that 3% of the gross accounts receivable will become uncollectible. 13. What amount should be recognized as doubtful accounts expense for the current year? 190,000 Problem 7. L Company provided the following data for the current year: Allowance for doubtful accounts – January 1 Sales Sales returns and allowances Sales discounts Accounts written off as uncollectible

180,000 9,500,000 800,000 200,000 200,000

The entity provided for doubtful accounts expense at the rate of 3% of net sales. 14. What is the allowance for doubtful accounts at year-end? 235,000 Problem 8. On January 1, 2015 E company reported accounts receivable P2,070,000 and allowance for doubtful accounts P80,000. The entity provided the following data:

2012 2013 2014 2015

Credit Sales 11,100,000 12,250,000 14,650,000 15,000,000

Writeoffs 260,000 295,000 300,000 310,000

Recoveries 22,000 37,000 36,000 40,000

The collections from customers during the year totaled P14,000,000 excluding recoveries. Doubtful accounts are provided for as a percentage of credit sales. The entity calculated the percentage annually by using the experience of the three years prior to current year. 15. What is the net realizable value of accounts receivable on December 31, 2015? 2,650,000 16. What amount should be reported as doubtful accounts expense for 2015? 300,000 17. What amount should be reported as allowance for doubtful accounts on December 31, 2015? 110,000 Problem 9. “Di Na Muli” Company reported the following data at year-end: Sales 8,000,000 Accounts Receivable 2,000,000 Allowance for doubtful accounts – January 1 100,000 Accounts Written off 130,000 Recovery of accounts previously written off 20,000 The company uses the following method in estimating doubtful accounts: a. Percentage of sales – the estimate is 3% b. Percentage of accounts receivable – The estimate is 8% c. Aging – The estimate is P200,000 18. Using Percentage of sales method, how much is Net Realizable Value of Accounts receivable? a. 1,760,000 b. 1,770,000 c. 1,950,000 d. 2,000,000 19. Using Percentage of AR method, how much is the doubtful accounts expense? a. 160,000 b. 210,000 c. 270,000 d. 170,000

20. Using Aging method, how much is the ending balance of Allowance for Doubtful Accounts? a. 200,000 b. 190,000 c. 210,000 d. 90,000

Problem 10. Kriz Company is a leading educational institution with student population of more than 50,000. Kriz continuously maintains good quality education and a roster of qualified instructors. As a result, Kriz continuously produces top graduates in several fields. As of December 31, 2010, Kriz has an outstanding receivable balance of P23,250,000 broken down into: 0-60 days outstanding, P9,000,000; 61-120 days outstanding, P6,750,000; and over 120 days outstanding, P7,500,000. Estimated percent uncollectible of these accounts is 2%, 4% and 10%, respectively. Kriz wrote off P525,000 of its receivables and recovered P300,000 from accounts previously written off in prior year. As of December 31, 2009, Kriz has an allowance for uncollectible accounts of P650,000. 21. Base on the aging analysis, Kriz should report an allowance for doubtful accounts as of December 31, 2010 at 1,200,000 Problem 11. On December 31, 2015, Jet Company received two P1,000,000 notes receivable from customers in exchange for services rendered. On both notes, interest is calculated on the outstanding principal balance at the annual rate of 3% and payable at maturity. The note from Maxx Company, made under customary trade terms, is due in nine months and note from Hart Company is due in five years. The market interest rate for similar notes on December 31, 2015 was 8%. The compound interest factors to convert future value into present value at 8% follow: Present value of 1 due in nine months .944 Present value of 1 due in five years .680 22. What is the carrying amount of notes receivable from Hart Company on December 31, 2015? 782,000 The 1,000,000 notes received from HART Company will mature in 5 years. Therefore, it is a Long-term noninterest bearing note receivable to be measured initially at PRESENT VALUE. The Principal of 1,000,000 will be collected at the end of 5 years or at maturity date, also the interest of 3% for 5 years will be collected at the date of maturity (lump sum). Thus, the principal and interest are discounted to compute for the PRESENT VALUE. Principal 1,000,000. X .680 = Interest (1,000,000 x 3% x 5yrs) x .680 = PRESENT VALUE

680,000 102,000 782,000

23. What is the carrying amount of notes receivable from Maxx Company on December 31, 2015? 1,000,000 The 1,000,000 notes received from MAXX Company will mature in 9 months. Therefore, the note is classified as short term note receivable and measured initially at FACE AMOUNT/VALUE.

Problem 12. Feasible Company sold to another entity a tract of land costing 5,000,000 for 7,000,000 on January 1, 2019. The buyer paid P1,000,000 down and signed a two-year promissory note for the remainder of the purchase price plus 12% interest compounded annually. The note matures on January 1, 2021. 24. What amount should be reported as interest income for 2021? 0 25. What amount should be reported as Accrued Interest Receivable as of December 31, 2020? 1,526,400 2019 January 1 Cash 1,000,000 Notes Receivable 6,000,000 Land Gain on sale of land December 31

5,000,000 2,000,000

Accrued Interest Receivable 720,000 Interest Income (6,000,000 x 12%)

720,000

2020 December 31

Accrued Interest receivable 806,400 Interest Income (6,000,000 + 720,000) x 12%

806,400

2021 January 1

Cash

7,526,400 Notes Receivable Accrued Interest Receivable

6,000,000 1,526,400

Problem 13. Gullible Company is a dealer in equipment. On December 31, 2019, the entity sold an equipment in exchange for a noninterest bearing note requiring five annual payments of 500,000. The first payment was...