Professional Documents
Culture Documents
2. C
7. B
3. C
8. B
4. B
9. A
Cost of Sales
Inventory
20,000
b.
Cost of Sales
Inventory
18,000
18,000
c.
No adjustment
d.
Sales
20,000
40,000
Accounts Receivable
e.
40,000
Sales
60,000
Accounts Receivable
60,000
Inventory
33,600
Cost of Sales
f.
33,600
Sales
120,000
Accounts Receivable
g.
120,000
Accounts Receivable
Sales
60,000
60,000
h.
No adjustment
i.
Accounts Receivable
Sales
80,000
Cost of Sales
Inventory
55,000
Accounts Receivable
Sales
90,000
j.
80,000
55,000
90,000
Accounts Payable B
Accounts Receivable - B
74,000
Accounts Receivable L
Accounts Receivable C
16,200
3.
4.
Sales
74,000
16,200
24,000
Accounts Receivable E
24,000
38
5. D
10. D
Chapter 4
Receivables and Related Revenues
5.
Inventory
16,500
Cost of Sales
6.
16,500
Sales
60,000
Accounts Receivable - F
Advances from Customers
7.
Sales
15,000
45,000
85,000
Accounts Receivable G
Inventory
85,000
59,000
Cost of Sales
8.
Sales
9.
Sales
59,000
2,500
Accounts Receivable H
10,000 / 200 x (200 150) = 2,500
180,000
Accounts Receivable I
10.
180,000
Inventory
120,000
Cost of Sales
11.
2,500
120,000
5,000
5,000
Per client
12,000
22,000
97,600
20,000
55,000
7,500
215,300
Adjustment
Per audit
(98,800)
(98,800)
Age Classification
Not due
1-60 days past due
61-120 days past due
Over 120 days past due
Total
Notes Receivable
Interest Income
Accounts Receivable
Not due
12,000
22,000
0
20,000
55,000
7,500
116,000
1-60 days
Past due
3,000
22,000
8,000
2,220
52,780
7,500
68,280
27,220
1%
2%
5%
50%
2,400
97,600
Interest Receivable
Interest Income
500
500
39
Over 120
days past
due
1,000
% Uncollectible
100,000
(customer 3)
61-120 days
pastdue
10,000
10,000
11,000
10,000
Required Allowance
272.20
1,365.60
550.00
5,000.00
P7,187.80
Chapter 4
Receivables and Related Revenues
Uncollectible Accounts Expense
Allowance for Doubtful Accounts
7,188 5,000 = 2,188
2,188
2,188
Per Client
175,000
80,000
42,000
24,000
P321,000
Adjustment
Per Audit
% Uncollectible
175,000
84,800
39,260
19,800
318,860
4,800
(2,740)
(4,200)
(2,100)
1%
3%
6%
25%
Required Allowance
Balance of allowance before final adjustment
22,060 4,200
Adjustment
P11,599
17,860
P 6,261
(a)
Adjusting entries:
1.
2,740
2.
4,200
4,800
6,261
3.
4.
Required
Allowance
1,750.00
2,544.00
2,355.60
4,950.00
11,599.00
2,740
4,200
4,800
6,261
(b)
P318,860
(c)
P13,310
2,740
(6,261)
P 9,789
(168,000)
P4,374,900
40
Subsidiary Ledger
P 5,635,700
(1,092,800)
(168,000)
P4,374,900
Chapter 4
Receivables and Related Revenues
(b) Correct balance of Allowance for Uncollectible Accounts
Age
Before
Adjustment
Adjustments
Current
P 4,067,320
(1,092,800)
31-60 days
402,440
61-90 days
267,320
898,620
(168,000)
> 90 days
Per Audit
% Uncollectible
2,974,520
402,440
267,320
730,620
2%
5%
10%
30%
P281,255
( 168,000)
212,275*
P325,530
P3,425,625
212,275
P3,637,900
Required
Allowance
P 59,490
20,122
26,732
219,186
P 325,530
Audit Adjustments:
Sales
2,732,900
Accounts Receivable
Sales
2,732,900
3,260,700
Accounts Receivable
168,000
212,275
3,260,700
168,000
212,275
Due Date
Avon Co.
Sara Lee
Triumph
President
Mondragon
Elizabeth
Total
3/30/13
1/30/13
7/2//12
4/04/12
1/12/13
8/31/13
(b)
Per Client
Adjusting Entries:
Liability on Discounted Notes
Trade Notes Receivable
Gain on Sale of Notes Receivable
Interest Rate
8%
6%
P 3,333.
300
9^
1,620
P5,253
100,577
100,000
577
41
Accrued
Interest
Chapter 4
Receivables and Related Revenues
Principal
Interest for the entire term
Discount (103,333 x 8% x 4/12)
Proceeds from discounting
Carrying value, date of discounting
Gain on sale of notes
P100,000
3,333
( 2,756)
P 100,577
100,000
P
577
250,000
Accounts Receivable
Trade Notes Receivable
Interest Income
30,000
30,000
300
800,000
66,055
800,000
66,055
60,550
26,667
186,667
200,000
53,893
Face
PV = 200,000 x .7972
Discount
250,000
60,550
26,667
40,560
200,000
200,000
P200,000
159,440
P 40,560
6,378
6,378
Interest Receivable
4,953
Interest Income
(5,253 300 interest income recorded in audit adj. no. 3)
4,953
42
P 500,000
4,000,000
P1,000,000
178,894
821,106
11,236,748
P16,557,854
Chapter 4
Receivables and Related Revenues
(b)
(c)
P560,000
3,509,919
P4,069,919
P90,000
30,000
P120,000
On NR from Officer
P4,000,000 x 9%
P360,000
P 23,916
P746,667
P1,250,583
P 5,000,000
Periodic Payment
09/01/12
09/01/13
09/01/14
P797,190
P800,000
(90,000)
P5,003,252
5,003,252
P 2,240,000
1,797,880
710,000
P 87,190
Balance of Principal, end
P 2,763,252
3,205,372
P2,253,900
Face
Less: Discount on Notes Receivable
Initial discount P3,000,000 P2,253,900 =
Interest earned P2,253,900 x 10% x 8/12
Carrying value, 12/31/12
P3,000,000
P746,100
= 150,260
595,840
P2,404,160
P1,000,000
25,000
P1,025,000
43
P 14,000,000
11,236,748
8,031,376
Chapter 4
Receivables and Related Revenues
(a)
Audit Adjustments:
Interest Receivable
Interest Income
200,000
200,000
456,555
1,743,445
200,000
2,000,000
400,000
346,100
746,100
150,260
Interest Receivable
Interest Income
(b)
150,260
25,000
25,000
P119,345
325,000
P444,345
Non-current Assets:
Note Receivable from Company A (P1,743,445 P119,345)
Note Receivable from Company B
Total Non-current Receivables
(d) Impairment Loss
Notes Receivable from Company A
Face
Interest Receivable (still unrecorded) P2,000,000 x 10%
Carrying value of note
PV of future cash flows
P550,000 x 3.1699
Impairment loss
P1,624,100
2,404,160
P4,028,260
P2,000,000
200,000
P2,200,000
1,743,445
P 456,555
Interest Income:
From Company A
From Company B
From Company C
Total
P200,000
150,260
25,000
P375,260
MULTIPLE CHOICE - PROBLEMS
1.
2.
3.
4.
C
B
B
A
5.
6.
7.
8.
C
A
C
A
9. D
10. B
11. A
12. A
13. D
14. B
15. B
16. B
44
17.
18.
19.
20.
C
A
A
D
21.
22.
23.
24.
P780,800
P13,600
B
P23,680
Chapter 4
Receivables and Related Revenues
Computations
1.
2-5
4. Sales
P1,320,000
(8,680)
(14,200)
(10,000)
5. Cost of Sales
P842,000
(7,240)
(12,500)
6,100
(14,000)
21,000
P1,294,120
18,200
P846,560
6.
Classification
Balance per audit
Nov-Dec 2012
P1,080,000
July October 2012
650,000
January June 2012
420,000
Prior to 1/01/12
90,000*
Total
P2,240,000
Existing allowance = 154,000 95,000 + 15,000 + 180,000 60,000
Additional uncollectible accounts expense
% Uncollectible
2%
10%
25%
70%
Required Allowance
P21,600
65,000
105,000
63,000
P254,600
194,000
P 60,600
7.
P240,600
8.
9.
10.
No impairment loss shall be recognized, the loss vent is a non-adjusting vent, which prsents condition different
from that as of the end of the reporting period.
11.
No impairment loss shall be recognized on Company Ys note. The interest to be collected during the extended term
equals the original interest rate of the loan ; the prsent value of future cash inflow shall be equal to the loans carrying
value.
12.
13.
The non-adjusting vent requires disclosure, because even when taken alone, the loss would have a material effect on
the financial condition of 5-6.
14.
P2,325,000
(1,830,000)
(
7,000)
P 488,000
15.
P 320,000
170,000
P 150,000
16.
P1,985,400
45
P4,480,000
3,401,776
P1,078,224
P1,120,000
1,102,190
P 17,810
Chapter 4
Receivables and Related Revenues
+ 20,000 cost of unsold goods =
P496,370
17.
18.
19.
P 20,475
20.
P 28,475
21.
P780,800
22.
(780,800 100,800) x 2% =
P13, 600
23.
P12,000
24.
P 23,680
P1,365,000
MEEMEE, Inc.
Adjusting Entries:
1.
Miscellaneous Expenses
Receivables from Officers and Employees
Cash Petty Cash Fund
1,260
500
1,760
2.
3.
4.
12,800
5,500
5,000
5.
6.
400,625
394
Miscellaneous Expenses
Cash in Bank BPI CA
8.
394
12,800
5,500
5,000
7.
400,000
625
15,600
15,600
150
Payroll
150
45,200
45,200
46
Chapter 4
Receivables and Related Revenues
9.
10.
Accounts Payable
Miscellaneous Expenses
Cash in Bank _ BPI CA General
900
150
1,050
9,000
4,800
2,000
5,000
15,250
14.
6,800
15.
Interest Receivable
Interest Income
Creative: P10,000 x 24% x 64/360 = 427
President: P 6,800 x 25% x 19/360 = 90
Total
517
517
4,543
11.
12.
13.
16.
Age Class
Per Client
Current
P362,412
13,800
2,000
5,000
15,000
250
6,800
517
4,543
ANALYSIS OF ACCOUNTS RECEIVABLE
Adjustment
Per Audit % Uncollectible
9,000
(2,000)
4,550
369,412
Required
Allowance
1,847
207.445
1%
2,074
148,080
3%
4,442
17,500
12,800
4,800
--
17,500
10%
1,750
11,387
(5,000)
6,387
50%
3,194
--
5,500
15,250
20,750
20%
4,150
202,895
130,480
P17,457
22,000
(4,543)
P8,240
257,794
76,250
214,150
400,625
47
Chapter 4
Receivables and Related Revenues
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
Cash
Accounts Receivable (Gross)
Allowance for Bad Debts
Bad Debts Expense
Notes Receivable
Liability on Discounted Notes
Interest Receivable
Interest Income
Receivables from Officers and Employees
Customer Credit Balances
556,434
769,574
17,457
19,457
18,000
8,000
517
4,586
9,700
13,800
48