Receivables

Accounts Receivable and Doubtful Accounts Estimation P300,000. An analysis of Aura's trade accounts receivable at that
date revealed the following:
PROBLEM 1: Based on aging of its accounts receivable at December Age Amount Estimated uncollectible
31, 2004, Anthony Company determined that the net realizable value 0-30 days 8,000,000 3%
of the accounts receivable at that date is P595,000 Additional 31-60 days 2,000,000 15%
information is as follows: Over 60 days 500,000 P400,000
Accounts receivable at 12/31/2004 610,000
Allowance for doubtful accounts at 1/1/04 credit balance 16,000
What amount should Aura report as doubtful accounts expense for
Accounts written off as uncollectible at 9/30/2004 12,000
2004?
A. 400,000 C. 740,000
Doubtful accounts expense for the year ended December 31, 2004
B. 640,000 D. 940,000
was
A. 11,000 C. 15,000
PROBLEM 5: Arwin Company revealed the following information for
B. 13,000 D. 19,000
2014:
Accounts receivable on January 650,000
Credit sales 2,700,000
PROBLEM 2: Mary Joyce is a leading educational institution with
Sales returns 75,000
student population of more than 50,000. Mary Joyce continuously
Collections from customers 2,150,000
maintains good quality education and a roster of qualified
Accounts written off 40,000
instructors. As s result, Mary Joyce continuously produces top
Estimated future sales returns at year-end 50,000
graduates at several fields. As at December 31, 2004. Mary Joyce has
Estimated uncollectible accounts receivable at
an outstanding accounts receivable balance of P100,000,000 broken
year-end per aging 110,000
down into : 0-60 days outstanding, P50,000,000; 61-120 days
outstanding, P30,000,000; and over 120 days outstanding,
On December 31, 2014, what is the balance of accounts receivable
P20,000,000. Estimated uncollectible accounts are 2%, 5% and 10%
before allowance for doubtful accounts and allowance for sales
respectively. Mary Joyce wrote off P2,500,000 of its accounts
returns?
receivable and recovered P500,000 from accounts previously written
A. 925,000 C. 1,125,000
off in prior years. As at December 31, 2003, Mary Joyce has an
B. 1,085,000 D. 1,200,000
allowance for uncollectible accounts of P3,000,000. Based on the
aging analysis, Mary Joyce should report an allowance for doubtful
PROBLEM 6: Inge Company determined the net value of accounts
accounts as at December 31, 2004 at
receivable on December 31, 2014 based on an aging of accounts
A. 3,000,000 C. 4,000,000
receivable was P325,000.
B. 3,600,000 D. 4,500,000
Allowance for uncollectible accounts – 1/1/2014 30,000
Uncollectible accounts written-off during 2014 18,000
PROBLEM 3: Dahlgren Company began operation on January 1, 2004.
Uncollectible accounts recovered during 2014 2,000
On December 31, 2004, Dahlgren provided for uncollectible accounts
Accounts receivable on 12/31/2014 350,000
based on 5% of annual credit sales. On January 1, 2005, Dahlgren
changed its method of determining its allowance for uncollectible
What is the uncollectible accounts expense for the current year?
accounts to the percentage of accounts receivable. The rate of
A. 5,000 C. 15,000
uncollectible accounts was determined to be 15% of the ending
B. 11,000 D. 21,000
accounts receivable balance. In addition, Dahlgren wrote off all
accounts receivable that were over 1 year old. The following
PROBLEM 7: On January 1, 2014, Jamin Company had a credit
additional information relates to the years ended December 31,
balance of P260,000 in the allowance for uncollectible accounts.
2004 and 2005.
Based on past experience, 2% of credit sales would be uncollectible.
2005 2004
During the year, the entity wrote off P325,000 of uncollectible
Credit sales 8,000,000 6,000,000 accounts. Credit sales for the year were P9,000,000. On December
Collections (including collections on recovery) 6,950,000 4,500,000 31, 2014, what amount should be reported as allowance for
Accounts written off 70,000 None uncollectible accounts?
A. 115,000 C. 245,000
Recovery in accounts previously written off 20,000 None
B. 180,000 D. 440,000
What is the provision for uncollectible accounts for the year ended
December 31, 2005? PROBLEM 8: Klaire Company provided the following information
A. 72,000 C. 125,000 about accounts receivable on December 31, 2014:
B. 122,000 D. 400,000
0 – 60 days outstanding 6,000,000 5% uncollectible
PROBLEM 4: On December 31, 2004, Aura Company had an 61 – 120 days outstanding 4,500,000 10% uncollectible
unadjusted credit balance In its allowance for doubtful accounts
Over 120 days outstanding 5,000,000 1,250,000 uncollectible
Receivables
A. 250,000 debit C. 750,000 debit
During 2014, the entity wrote off P700,000 in accounts receivable B. 250,000 credit D. 750,000 credit
and recovered P300,000 that had been written off in prior years. On PROBLEM 12: At year-end, Janna Company reported allowance for
January 1, 2014, the allowance for uncollectible accounts was doubtful accounts with a debit balance of P50,000 and net sales of
P500,000. Under the aging method, what amount of uncollectible P9,000,000 before adjustment. The entity estimated uncollectible
accounts expense should be reported for 2014? accounts receivable at 5% of net sales. What is the allowance for
A. 1,900,000 C. 2,100,000 doubtful accounts at year-end?
B. 2,000,000 D. 2,200,000 A. 400,000 C. 500,000
B. 450,000 D. 550,000
PROBLEM 9: Delta Company sells to wholesalers on terms
of 2/15, net 30. The entity has no cash sales but 50% PROBLEM 13: On January 1, 2014, Jamin Company had a credit
of the customers take advantage of the discount. The balance of P260,000 in the allowance for uncollectible accounts.
entity uses the gross method of recoding sales and Based on past experience, 2% of credit sales would be uncollectible.
accounts receivable. An analysis on December 31,
During the year, the entity wrote off P325,000 of uncollectible
2014 revealed the following:
Age Amount Collectible accounts. Credit sales for the year were P9,000,000. On December
31, 2014, what amount should be reported as allowance for
0 – 15 days 100,000 100%
uncollectible accounts?
16 – 30 days 60,000 95% A. 115,000 C. 245,000
31 – 60 days 5,000 90% B. 180,000 D. 440,000
Over 60 days 2,500 500
PROBLEM 14: Meredith Company provided the following
On December 31, 2014, what amount should be information:
reported as allowance for discounts?
A. 1,000 C. 1,675
B. 1,620 D. 2,000 January 1 December 31
Accounts receivable 2,400,000
PROBLEM 10: Veronica Company reported current receivables on Allowance for
December 31, 2014 which consisted of the following: doubtful accounts 120,000
Sales on account 16,000,000
Trade accounts receivable 930,000 Cash collections from customers 14,000,000
Allowance for uncollectible accounts 20,000
Claim against shipper for goods lost in transit The cash collections included recovery of P20,000 from a customer
in November 2014 30,000 whose account had been written off as worthless in 2013. During
Selling price of unsold goods sent by Veronica on 2014, it was necessary to recognize doubtful accounts expense of
consignment at 130% of cost and not P200,000 and write off worthless accounts of P60,000. On
included in the ending inventory 260,000 December 1, 2014, a customer settled an account by issuing a 12%
Security deposit on lease of warehouse used for six-month note for P800,000. What is the net realizable value of
storing inventories 300,000 accounts receivable on December 31, 2014?
A. 3,260,000 C. 3,340,000
What is the correct total current net receivable on December 31, B. 3,280,000 D. 3,560,000
2014?
A. 940,000 C. 1,240,000 PROBLEM 15: Bum Company had no cash sales but 50% of customers
B. 1,200,000 D. 1,500,000 take advantage of the discount based on past experience. The terms
were 5/15, n/30. The entity used the gross method of recoding
PROBLEM 11: Brat Company adopted the aging method of sales. An analysis of the collectability of accounts receivable on
estimating doubtful accounts on December 31, 2014. The following December 31, 2014 revealed the following
data are available for the current year:
0 – 15 days 5,000,000 100%
Allowance for doubtful accounts, January 1 2,500,000 16 – 30 days 2,000,000 90%
Provision for doubtful accounts recorded Over 30 days 1,000,000 700,000
during the year based on credit sales 2,000,000
Recoveries of accounts written off 500,000 What amount should be reported as net realizable value of accounts
Accounts written off 2,050,000 receivable?
Estimated uncollectible accounts per A. 6,975,000 C. 7,500,000
aging on December 31 2,200,000 B. 7,375,000 D. 7,875,000
Estimated future sales return 1,500,000

What is the year-end adjustment to the allowance for doubtful