[go: up one dir, main page]
Scribd
Upload
214 views3 pages

Accounts Receivable Audit Solutions

The document contains solutions to 5 problems regarding accounts receivable balances. Problem 1 calculates the accounts receivable balance at the end of the company's first year of operations as P275,100. Problem 2 calculates the accounts receivable balance at December 31, 2024 as P1,130,600. Problem 3 calculates the accounts receivable balance at December 31, 2024 as P6,390,000 and the allowance for bad debts account balance as P71,025. Problem 4 calculates the allowance for doubtful accounts balance at December 31, 2024 as P200,750. Problem 5 calculates the net realizable value of receivables at December 31, 2024 as P365,000.

Uploaded by

Genevieve Vargas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
214 views3 pages

Accounts Receivable Audit Solutions

The document contains solutions to 5 problems regarding accounts receivable balances. Problem 1 calculates the accounts receivable balance at the end of the company's first year of operations as P275,100. Problem 2 calculates the accounts receivable balance at December 31, 2024 as P1,130,600. Problem 3 calculates the accounts receivable balance at December 31, 2024 as P6,390,000 and the allowance for bad debts account balance as P71,025. Problem 4 calculates the allowance for doubtful accounts balance at December 31, 2024 as P200,750. Problem 5 calculates the net realizable value of receivables at December 31, 2024 as P365,000.

Uploaded by

Genevieve Vargas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

REV 4 – REVIEW IN AUDITING Prof, Hanna Arriola

Genevieve O. Vargas

Problem 1

Required: What is the accounts receivable balance at the end of the company’s first year of

operations?

Solution:

Purchases P450,000

Less: Merchandise inventory, ending (123,000)

Cost of goods sold 327,000

Multiply by sales ratio x 130%

Sales 425,100

Less: Collections from customers (150,000)

Accounts receivable, ending P275, 100

Problem 2

Required: What is the accounts receivable balance at December 31, 2024?

Solution:

Bad debt expense for 2024 P271,000

Less: Accounts Written Off during 2024 (35,400)

Allowance for bad debt, December 31,2024 235,600

Add: Net Realizable value of the accounts

Receivables, Dec.31,2024 895,000

Accounts receivable, Dec. 31, 2024 P1,130,600


Problem 3

Required: What is the accounts receivable balance at December 31, 2024?

What is the December 31, 2024 balance of the Allowance for Bad Debts account?

Solution:

(1) Accounts receivable, Jan. 1, 2024 P2,197,500


Sales 537,702,500
Collections 528,070,500
Accounts written off (5,439,500)
Accounts receivables, Dec. 31, 2024 P6,390,000

(2) Allowance for bad debt, Jan. 1, 2024 P133,500


Bad debts expense (537,702,500 x 1%) 5,377,025
Accounts written off 5,439,500
Allowance for bad debts, Dec. 31, 2024 P71,025

Problem 4

Required: What is the balance of the allowance for doubtful accounts at December 31, 2024?

Solution:

Allowance for Doubtful Accounts

Accounts written off in 2024 P155,000 Balance, Jan. 1,2024


P191,000 66,750 Bad debt expense for
2024 (4,450,000 x 1 ½ %)
170,000 Recovery of accounts
written off
P200,750 Balance, 12/31/2024
Problem 5

Required: What is the net realizable value of Mahogany’s receivables at December 31, 2024?

Solution:

Accounts receivable P460,000

Less: accounts estimated to be uncollectible 95,000

Net realizable value P365,000

You might also like