cash and cash equivalent intermediate accounting 1 PDF

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Proof of CashProblem 17-Lazer Company had the following bank reconciliation on June 30:Balance per bank statement, June 30 Deposit in transit Total Outstanding checks Balance per book, June 303,000,400,3,400,(900,000)2,500,The bank statement for the month of July showed the following:Deposits, inclu...

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Proof of Cash Problem 17-1 Lazer Company had the following bank reconciliation on June 30: Balance per bank statement, June 30 Deposit in transit Total Outstanding checks Balance per book, June 30

3,000,000 400,000 3,400,000 (900,000) 2,500,000

The bank statement for the month of July showed the following: Deposits, including P200,000 note collected for Lazer Disbursements, including P140,000 NSF customer check and P10,000 service charge

9,000,000 7,000,000

All reconciling items on June 30 cleared through the bank in July. The outstanding checks totaled P600,000 and the deposit in transit amounted to P1,000,000 on July 31. What is the adjusted cash in bank on July 31? What is the cash balance per book on July 31? What is the amount of cash receipts per book in July? What is the amount of cash disbursements per book in July?

Problem 17-2 Chris Company presented the following bank reconciliation for the month of November: Balance per bank statement, November 30 Add: Deposit in transit Less: Outstanding checks Bank credit recorded in error Balance per book, November 30

3,600,000 800,000 4,400,000 1,200,000 200,000

1,400,000 3,000,000

Data per bank statement for the month of December follow: December deposits, including note collected of P1,000,000 for Chris December disbursements, including NSF customer check P350,000 and service charge P50,000

5,500,000 4,400,000

All items that were outstanding on November 30 cleared through the bank in December, including the bank credit. In addition, checks amounting to P500,000 were outstanding and deposits of P700,000 were in transit on December 31. What is the adjusted cash in bank on December 31? What is the cash balance per ledger on December 31? What is the amount of cash receipts per book in December? What is the amount of cash disbursements per book in December?

Problem 17-3 Lira Company prepared the following bank reconciliation on June 30: Balance per bank Deposits in transit Outstanding checks Balance per book

9,800,000 400,000 (1,400,000) 8,800,000

There were total deposits of P6,500,000 and charges for disbursements of P9,000,000 for July per bank statement. All reconciling items on June 30 cleared the bank on July 31. Checks outstanding amounted to P1,000,000 and deposits in transit totaled P1,200,000 on July 31. What is the amount of cash receipts per book in July? What is the amount of cash disbursements per book in July? What is the adjusted cash in bank on July 31? What is the cash balance per ledger on July 31?

Problem 17-4 Oro Company had the following bank reconciliation on March 31: Balance per bank statement, March 31 Add: deposits in transit Total Less: Outstanding checks Balance per book, March 31

4,650,000 1,030,000 5,680,000 1,260,000 4,420,000

Data per bank statement for the month of April: Deposits Disbursements

5,840,000 4,970,000

All reconciliation items on March 31 cleared through the bank in April. Outstanding checks on April 30 totaled P700,000 and there were no deposits in transit on April 30. What is the cash balance per book on April 30?

Problem 17-5 Jam Company provided the following bank reconciliation on May 31: Balance per bank statement Deposits outstanding Checks outstanding Correct cash balance

2,100,000 300,000 ( 30,000) 2,370,000

Balance per book Bank service charge Correct cash balance

2,372,000 ( 2,000) 2,370,000 Bank

Data for the month of June: Checks recorded Deposits recorded Collection by bank, P400,000 note plus interest NSF check returned with June 30 statement Balances

Book

2,300,000 2,360,000 1,620,000 1,800,000 420,000 10,000 1,830,000 1,810,000

What is the amount of checks outstanding on June 30? What is the amount of deposits in transit on June 30? What is the adjusted cash in bank on June 30?

Accounts Receivable Problem 18-1 Roxy Company provided the following information relating to accounts receivable for the current year: Accounts receivable on January 1 Credit sales Collections from customers, excluding recovery Accounts written off Collection of accounts written off in prior year (customer credit was not established) Estimated uncollectible receivables per aging of receivables at December 3

1,300,000 5,400,000 4,750,000 125,000 25,000 165,000

What is the balance of accounts receivable, before allowance for doubtful accounts On December 31?

Problem 18-2 Jay Company provided the following data relating to accounts receivable for the current year: Accounts receivable, January 1 Credit sales Sales return Accounts written off Collections from customers Estimated future sales return at December 31 Estimated uncollectible accounts at 12/31 per aging

650,000 2,700,000 75,000 40,000 2,150,000 50,000 110,000

What is the amortized cost of accounts receivable on December 31?

Problem 18-3 At year-end, Miami Company reported that the current receivables consisted of the following: Trade accounts receivable Allowance for uncollectible accounts Claim against shipper of goods lost in transit in November Selling price of unsold goods sent by Miami on consignment at 130% of cost and not included in Miami’s ending inventory Security deposit on lease of warehouse used for storing some inventories

930,000 (20,000) 30,000

260,000 300,000 1,500,000

What total amount should be reported as trade and other receivables under current assets at year-end?

Problem 18-4 Faith 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

What is the balance of accounts receivable on December 31?

Problem 18-5 Steven Company provided the following information during the first year of operations: Total merchandise purchases for the year Merchandise inventory on December 31 Collections from customers

7,000,000 1,400,000 4,000,000

All merchandise was marked to sell at 40% above cost. All sales are on a credit basis and all receivables are collectible What is the balance of accounts receivable on December 31?

Problem 18-6 Honduras Company revealed a balance of P8,200,000 in the accounts receivable control account at year-end. An analysis of the accounts receivable showed the following: Accounts known to be worthless Advance payments to creditors on purchase orders Advances to affiliated entities Customers’ accounts reporting credit balances arising from sales returns Interest receivable on bonds Trade accounts receivable – unassigned Subscription receivable due in 30 days Trade accounts receivable assigned (Finance Company’s equity in assigned accounts is P500,000) Trade installments receivable due 1-18 months, including unearned finance charge of P50,000 Trade accounts receivable from officers, due currently Trade accounts on which postdated checks are held and no entries were made on receipt on checks Total

100,000 400,000 1,000,000 (600,000) 400,000 2,000,000 2,200,000 1,500,000 850,000 150,000 200,000 8,200,000

What amount should be reported as trade accounts receivable at yearend?

Problem 18-7 Von Company provided the following data for the current year in relation to accounts receivable: Debits January 1 balance after deducting credit balance of P30,000 Charge sales Charge for goods out on consignment Shareholders’ subscriptions Accounts written off but recovered Cash paid to customer for January 1 credit balance Goods shipped to cover January 1 credit balance Deposit on long-term contract Claim against common carrier Advances to supplier

530,000 5,250,000 50,000 1,000,000 10,000 25,000 5,000 500,000 400,000 300,000

Credits Collections from customers, including overpayment of P50,000 Write-off Merchandise returns Allowances to customers for shipping damages Collection on carrier claim Collection on subscription

5,200,000 35,000 25,000 15,000 50,000 200,000

What is the balance of accounts receivable on December 31? What total amount of trade and other receivables should be reported under current assets? What total amount of other receivables should be reported under noncurrent assets?

Problem 18-8 Wonder Company provided the following transactions affecting accounts receivable during the current year: Sales – cash and credit Cash received from credit customers, all of whom took advantage of the discount feature of the credit terms 4/10, n/30 Cash received from cash customers Accounts receivable written off as worthless Credit memorandum issued to credit customers for sales returns and allowances Cash refunds given to cash customers for sales returns and allowances Recoveries on accounts receivable written off as uncollectible in prior periods not included in cash received from customers stated above Balances on January 1 Accounts receivable Allowance for doubtful accounts

5,900,000

3,024,000 2,100,000 50,000 250,000 20,000

80,000

950,000 100,000

The entity provided for uncollectible account losses by crediting allowance for doubtful accounts in the amount of P70,000 for the current year. What is the balance of accounts receivable on December 31? What is the balance of allowance for doubtful accounts on December 31?

Problem 18-9 Germany Company started business at the beginning of current year. The entity established an allowance for doubtful accounts estimated at 5% of credit sales. During the year, the entity wrote off P50,000 of uncollectible accounts. Further analysis showed that merchandise purchased amounted to P9,000,000 and ending merchandise inventory was P1,500,000. Goods were sold at 40% above cost. The total sales comprised 80% sales on account and 20% cash sales. Total collections from customers, excluding cash sales, amounted to P6,000,000. What is the cost of goods sold? What is the amount of sales on account? What is the net realizable value of accounts receivable at year-end?

Accounts Receivable Problem 19-1 Orr Company prepared an aging of accounts receivable on December 31 and determined that the net realizable value of the accounts receivable was P2,500,000. Allowance for doubtful accounts on January 1 Accounts written off as uncollectible Accounts receivable on December 31 Uncollectible accounts recovery

280,000 230,000 2,700,000 50,000

What amount should be recognized as doubtful accounts expense for current year?

Problem 19-2 Roanne Company used the allowance method of accounting for uncollectible accounts. During the current year, the entity had charged P800,000 to bad debt expense and wrote off accounts receivable of P900,000 as uncollectible. What was the decrease in working capital?

Problem 19-3 Mill Company’s allowance for doubtful accounts was P1,000,000 at the end of 2018 and P900,000 at the end of 2017. For the year ended December 31, 2018, the entity reported doubtful accounts expense of P160,000 in the income statement. What amount was debited to the appropriate account to write off uncollectible accounts in 2018?

Problem 19-4 Tara Company provided the following information pertaining accounts receivable at year-end: Days Outstanding 0 – 60 61 – 120 Over 120

Estimated Amount 1,200,000 900,000 1,000,000 3,100,000

Estimated Uncollectible 1% 2% 60,000

During the current year, the entity wrote off P70,000 in account receivable and recovered P40,000 that had been written off in prior years. At the beginning of current year, the allowance for uncollectible account was P100,000. Under the aging method, what amount of allowance for uncollectible accounts should be reported at year-end?

Problem 19-5 Marian Company used the allowance method of accounting for doubtful accounts. The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31: Number of days outstanding 0 – 30 days 31 – 60 days Over 60 days

Amount 5,000,000 2,000,000 1,000,000

Probability of collection 98% 90% 80%

The following additional information is available for the current year: Net credit sales for the year Allowance for doubtful accounts: Balance, January 1 Balance before adjustment, December 31

40,000,000 (cr) 450,000 (dr) 20,000

The entity based the estimate of doubtful accounts on the aging of accounts receivable. What amount should be recognized as doubtful accounts expense for the current year?

Problem 19-6 Delta Company sold goods to wholesalers on terms 2/15, net 30. The entity had no cash sales but 50% of the customers took advantage of the discount. The entity used the gross method of recording sales and accounts receivable. An analysis of the trade accounts receivable at year-end revealed the following: Age 0 – 15 days 16 – 30 days 31 – 60 days Over 60 days

Amount 2,000,000 1,400,000 400,000 200,000 4,000,0000

Collectible 100% 95% 90% 50%

What amount should be reported as allowance for sales discount at year-end? What amount should be reported as allowance for doubtful accounts at year-end? What is the net realizable value of accounts receivable at year-end?

Problem 19-7 Manchester Company provided the following accounts abstracted from the unadjusted trial balance at year-end:

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. What amount should be recognized as doubtful accounts expense for the current year?

Problem 19-8 At the beginning of current year, Jasmin Company had a credit balance of P260,000 in the allowance for uncollectible accounts. Based on past experience, 2% of credit sales would be uncollectible. During the current year, the entity wrote off P325,000 of uncollectible accounts. Credit sales for the year totaled P9,000,000. What is the uncollectible accounts expense for the year? What amount should be reported as allowance for uncollectible accounts at year-end?

Problem 19-9 Ladd 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 5% of net sales. What amount should be reported as doubtful accounts expense? What is the allowance for doubtful accounts on December 31?

Problem 19-10 Effective with the current year, Hall Company adopted a new accounting method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging of accounts receivable. Allowance for doubtful accounts, January 1 Provision for doubtful accounts during the current year at 2% of credit sales of P10,000,000 Accounts written off Estimated uncollectible accounts per aging on December 31

250,000 200,000 205,000 220,000

After year-end adjustment, what is the doubtful accounts expense for current year?

Problem 20-1 From inception of operations, Axis Company carried no allowance for doubtful accounts. Uncollectible accounts were expensed as written off and recoveries were credited to income as collected. During 2019, management recognized that the accounting policy with respect to doubtful accounts was not correct and determined that an allowance for doubtful accounts was necessary. A policy was established to maintain an allowance for doubtful accounts based on historical bad debt loss percentage applied to yearend accounts receivable. The historical bad debt loss percentage is to be recomputed each year based on all available past years up to a maximum of five years. Year 2015 2016 2017 2018 2019

Credit sales 1,500,000 2,250,000 2,950,000 3,300,000 4,000,000

Write-offs 15,000 38,000 52,000 65,000 83,000

Recoveries 0 2,700 2,500 4,800 5,000

The entity reported accounts receivable of P1,250,000 on December 31, 2018 and P2,000,000 on December 31, 2019. What is the allowance for doubtful accounts on December 31, 2018? What is the allowance for doubtful accounts on December 31, 2019? What is the doubtful accounts expense for 2019?

Problem 20-2

From inception of operations, Murr Company provided for uncollectible accounts expense under the allowance method. Provisions were made monthly at 2% of credit sales, bad debts written off were charged to the allowance account and recoveries of bad debts previously written off were credited to the allowance account. No year-end adjustments to the allowance account were made. The allowance for doubtful accounts was P120,000 on January 1, 2018. During the current year, credit sales totaled P9,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, P90,000 of bad debts were written off, and recoveries of accounts previously written off amounted to P15,000. The entity prepared an aging of accounts receivable for the first time on December 31, 2018. Classification November – December July – October January – June Prior to January 1, 2018

Balance Uncollectible 2,000,000 2% 600,000 10% 400,000 25% 200,000 75% 3,200,000 Based on the review of collectability of the account balances in the “prior to January 1, 2018” aging category, additional accounts totaling P60,000 are to be written off on December 31, 2018. Effective with the year ended December 31, 2018, the entity adopted a new accounting method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable. What is the required allowance for doubtful accounts on December 31, 2018? What amount was recorded as doubtful accounts expense for 2018? What amount should be reported as doubtful accounts expense in the income statement for 2018? What is the year-end adjustment to the allowance for doubtful accounts on December 31, 2018?

Problem 20-3 Horus Company provided for doubtful accounts expense monthly at 3% of credit sales. The balance in the allowance for doubtful accounts was P1,000,000 on January 1, 2018. During 2018, credit sales totaled P20,000,000, interim provisions for doubtful accounts were made at 3% of credit sales, P200,000 accounts were written off, and recoveries of accounts previously written off amounted to P50,000. An aging of accounts receivable was made on December 31, 2018. 1 – 60 days 61 – 180 days 181 – 360 days More than one year

6,000,000 2,000,000 1,500,000 500,000 10,000,000

10% uncollectible 20% uncollectible 30% uncollectible 50% uncollectible

Based on the review of the “more than one year” category, additional accounts of P100,000 are to be written off on December 31, 2018. What amount should be reported as doubtful accounts expense for the current year? What is the year-end adjustment to the allowance for doubtful accounts on December 31, 2018? What is the net realizable value of accounts receivable on December 31, 2018?

Problem 20-4 Flappable Company began operations on January 1, 2015. The entity provided for doubtful accounts based on 5% of annual credit sales in prior years. On January 1, 2018, the entity changed the method of determining the allowance for doubtful accounts using an aging schedule.

Credit sales Collections excluding recovery Accounts written off during year Recovery of accounts written off
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