Geoffrey Co. maintains an allowance for doubtful accounts equal to 4 % of accounts receivable. On...

 

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Geoffrey Co. maintains an allowance for doubtful accounts equal to 4 % of accounts receivable. On December 31, 2013, the accounts receivable and allowance for doubtful accounts had balances of P500,000 and P20,000, respectively. A summary of receivable transactions for 2014 is provided below. A. Sales on account, all on terms of 2/10, n/30, B. Collection of accounts receivable: P4,000,000 Within the discount period (net of discount) Beyond the discount period Note: Prepare one compound journal entry. P1,470,000 1,000,000 C. Promissory notes received from customers in settlement of accounts: Effective Rate 10% N/A Date of Note 04-01-2014 06-01-2014 Note: Prepare two separate journal entries. The P600,000 note was subsequently discounted with the bank on July 1, 2014 at 14%. Maturity Date 03-31-2015 07-31-2014 Interest Rate Non-interest bearing 12% Face Amount P400,000 600,000 D. Accounts receivable assigned on notification basis on December 1, 2014, P500,000 Terms: 1. Cash advance of 90% 2. 5% Service charge on gross accounts assigned. 3. 2% interest per month based on outstanding balance of loan. On December 31, 2014, Geoffrey received information that P400,000 of assigned accounts receivable was collected less a 2% discount. E. P100,000 accounts receivable, invoice dated August 1, 2014 was factored August 12, 2014. A cash advance of 80%, less a 5% service fee based on the total accounts factored was received. The accounts receivable was collected by the factor on August 31, 2014. F. Accounts written off during the year, P25,000 G.Collection of A/R previously written off, P12,000. (Included in item B above.) REQUIRED: B1. Give the joumal entry to record sales on account, P4,000,000 B2. Give the journmal entry to record collection of accounts receivable. B3. Give the journal entry to record receipt of the P400,000 non-interest bearing note. B4. Give the joumal entry to record receipt of 12%, P600,000 face value note. B5. Give the journal entry to record discounting of P600,000 note. B6. Give the journal entry to record assignment of P500,000 accounts receivable. B7. Give the journal entry to record notes payable - bank. B8. Give the journal entry to record collection by the bank of P400,000 assigned accounts less 2% discount. B9. Give the jourmal entry to record accounts receivabie factored. B10. Give the joumal entry to record collection of the factor's holdback. B11. Give the joumal entry to record accounts written off. B12. Give the joumal entry to record recoveries. B13. Give the adjusting entry on December 31, 2014 to record doubtful accounts expense. The company uses percentage of accounts receivable. B14. Give the adjusting entry on December 31, 2014 to record removal of contingent liability. B15. Give the adjusting entry on December 31, 2014 to record amortization of uneamed interest income. For items B16 to B24, supply the missing figures in the December 31, 2014 partial balance sheet Current Assets: Trade and Other Receivables Accounts Receivable Accounts Receivable - Assigned Total Less: Allowance for Doubtful Accounts Notes Receivable Less: Unearned Interest Income Current Liability: Notes Payable - Bank [816] B171 (818] [B19] (B21] [B22] (820] (B23] [824] Geoffrey Co. maintains an allowance for doubtful accounts equal to 4 % of accounts receivable. On December 31, 2013, the accounts receivable and allowance for doubtful accounts had balances of P500,000 and P20,000, respectively. A summary of receivable transactions for 2014 is provided below. A. Sales on account, all on terms of 2/10, n/30, B. Collection of accounts receivable: P4,000,000 Within the discount period (net of discount) Beyond the discount period Note: Prepare one compound journal entry. P1,470,000 1,000,000 C. Promissory notes received from customers in settlement of accounts: Effective Rate 10% N/A Date of Note 04-01-2014 06-01-2014 Note: Prepare two separate journal entries. The P600,000 note was subsequently discounted with the bank on July 1, 2014 at 14%. Maturity Date 03-31-2015 07-31-2014 Interest Rate Non-interest bearing 12% Face Amount P400,000 600,000 D. Accounts receivable assigned on notification basis on December 1, 2014, P500,000 Terms: 1. Cash advance of 90% 2. 5% Service charge on gross accounts assigned. 3. 2% interest per month based on outstanding balance of loan. On December 31, 2014, Geoffrey received information that P400,000 of assigned accounts receivable was collected less a 2% discount. E. P100,000 accounts receivable, invoice dated August 1, 2014 was factored August 12, 2014. A cash advance of 80%, less a 5% service fee based on the total accounts factored was received. The accounts receivable was collected by the factor on August 31, 2014. F. Accounts written off during the year, P25,000 G.Collection of A/R previously written off, P12,000. (Included in item B above.) REQUIRED: B1. Give the joumal entry to record sales on account, P4,000,000 B2. Give the journmal entry to record collection of accounts receivable. B3. Give the journal entry to record receipt of the P400,000 non-interest bearing note. B4. Give the joumal entry to record receipt of 12%, P600,000 face value note. B5. Give the journal entry to record discounting of P600,000 note. B6. Give the journal entry to record assignment of P500,000 accounts receivable. B7. Give the journal entry to record notes payable - bank. B8. Give the journal entry to record collection by the bank of P400,000 assigned accounts less 2% discount. B9. Give the jourmal entry to record accounts receivabie factored. B10. Give the joumal entry to record collection of the factor's holdback. B11. Give the joumal entry to record accounts written off. B12. Give the joumal entry to record recoveries. B13. Give the adjusting entry on December 31, 2014 to record doubtful accounts expense. The company uses percentage of accounts receivable. B14. Give the adjusting entry on December 31, 2014 to record removal of contingent liability. B15. Give the adjusting entry on December 31, 2014 to record amortization of uneamed interest income. For items B16 to B24, supply the missing figures in the December 31, 2014 partial balance sheet Current Assets: Trade and Other Receivables Accounts Receivable Accounts Receivable - Assigned Total Less: Allowance for Doubtful Accounts Notes Receivable Less: Unearned Interest Income Current Liability: Notes Payable - Bank [816] B171 (818] [B19] (B21] [B22] (820] (B23] [824]

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Answer No Account Title Debit P Credit P B1 Account receivable 4000000 Sales revenue 4000000 B2 Cash ... View the full answer