Professional Documents
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LONG QUIZ #1
Accounting for Cash and Cash Equivalents, Accounts Receivable,
Notes Receivable and Loans Receivable
Problem 1. TRIOWTRI Company maintains its current account with BAMA Bank.
The bank statement on December 31, 2013 showed a balance of P638,340.
You gathered the following information:
A check for P22,500 received from a customer whose account is current had
been deposited and then returned by the bank on December 28, 2013. No
entry was made for the return of this check. The customer replaced the check
on January 15, 2014.
A check for P5,720 was cleared by the bank as P7,520. The bank made the
correction on January 2, 2014.
A check for P3,500 representing payment of an employee advance was
received and deposited on December 27, 2012, but was not recorded until
January 3, 2014.
Postdated checks totaling P67,300 were included in the deposits in transit.
These represent collections of current receivable from customers. The checks
were actually deposited on January 5, 2014.
Various debit memos for drafts purchased for payment of importation of
equipment totaling P230,000 were not yet recorded. These purchases were
previously set up as accounts payable. Said equipment arrived in December.
Interest earned on the bank balance for the 4 th quarter of 2013, amounting to
P1,950, was not yet recorded.
Bank service charges totaling P1,260 were not recorded.
Deposit in transit and outstanding checks at December 31, 2013 totaled
P136,250 and P276,380, respectively.
Various expenses from the companys imprest petty cash fund dated December
2013 totaled P16,250, while those dated January 2014 amounted to P5,903. Another
disbursement from the fund dated December 2013 was a cash advance to an
employee amounting to P3,500. A replenishment of the petty cash fund was made
on January 8, 2013.
The companys trial balance on December 31, 2013 includes the following accounts:
Cash in bank BAMA Bank
P748,320
Cash in Bank BSA Bank (restricted account for
plant expansion, expected to be
disbursed in 2014)
700,000
Petty cash fund
30,000
Time deposit, placed December 20, 2013
and due March 20, 2014)
1,000,000
Money market placement LPU Bank
4,000,000
Required:
1. What is the adjusted petty cash fund balance on December 31, 2013?
_______________
2. What is the adjusted Cash in bank BAMA Bank balance on December 31,
2013? _______________
Receipts
P1,120,000
37,200
P1,246,000
1,080
P354,000
1,240,000
1,273,000
P249,100
218,340
172,880
211,900
Required:
8. Prepare a Proof of Cash.
Problem 4. ANGINGAY Co. reported the following information at the end of its first
year of operations, December 31, 2013:
Bad Debts Expense
P271,000
Uncollectible accounts written off during 2013
35,400
Net realizable value of accounts receivable
895,000
Required:
9. What is the accounts receivable balance at December 31, 2013?
Problem 5. EPALA Co. sells a variety of imported goods. By selling on credit, the
company cannot expect to collect 100% of its accounts receivable. At December 31,
2012, EPALA Co. reported the following in its statement of financial position:
Accounts Receivable
P2,197,500
Less: Allowance for bad debts
(133,500)
Net Realizable Value
P2,064,000
During the year ended December 31, 2013, EPALA Co. earned sales revenue
of P537,702,500 and collected cash of P528,070,500 from customers. Assume bad
debt expense for the year was 1% of sales revenue and that EPALA Co. wrote off
uncollectible accounts receivable totaling P5,349,500.
Required:
10.What is the accounts receivable balance at December 31, 2013?
11.What is the December 31, 2013 balance of the Allowance for Bad Debts
account?
Problem 6. PAPANS Inc.s accounts receivable subsidiary ledger shows the
following information:
CUSTOMER
ACCOUNT BALANCE
INVOICE
Aruy Inc.
Naku Co.
20,920
Syak Corp.
30,600
Trip Co.
23,140
Uy Co.
Eew Co.
17,400
45,140
31,600
17,400
DATE
AMOUNT
12/06/13
P14,000
11/29/13
21,180
09/27/13
12,000
08/20/13
8,920
12/08/13
20,000
10/25/13
10,600
11/17/13
10/09/13
22,000
12/12/13
19,200
12/02/13
12,400
09/12/13
The estimated bad debt rates below are based on PAPANS Inc.s receivable
collection experience:
Age of Accounts
Rate
0 30 days
1%
31 60 days
1.5%
61 90 days
3%
91 120 days
10%
Over 120 days
50%
The allowance for bad debts account had a debit balance of P5,500 on December
31, 2013, before adjustments.
Required:
12.Prepare an Accounts Receivable Aging Schedule
13.Give the necessary entry to adjust the allowance for bad debts account.
Problem 7. The balances of selected accounts taken from the December 31, 2012
of KAYAKOPA Co. are shown below:
Accounts Receivable
P674,000
Allowance for doubtful accounts
24,000
The following transactions (in summary) affecting accounts receivable occurred
during the year ended December 31, 2013:
Sales (all on account, terms: 2/10, 1/15, n/60)
P3,000,000
Cash received from customers
3,200,000
The cash received includes the following:
Customers paying within the 10-day discount period
P1,764,000
Customers paying within the 15-day discount period
990,000
Recovery of accounts written off
6,000
Customers paying beyond the discount period
?
Accounts receivable written off as worthless
22,000
Credit memo for sales returns
12,000
P1,750,000
2,000,000
1,750,000
P5,500,000