The beginning balances of the accounts receivable and allowance for bad debts accounts of Goodness Co. are
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Question:
The beginning balances of the accounts receivable and allowance for bad debts accounts of Goodness Co. are P3,000,000 and P30,000, respectively. On your audit of the financial statements for the period ended and as of December 31, 2016, you have gathered the following information:
Credit sales; terms 2/10, 1/15, n/30 | 10,000,000 |
Total Collections | 7,430,000 |
Accounts written-off | 20,000 |
Recoveries | 5,000 |
Sales returns | 15,000 |
Additional information:
- 50% of the credit sales were collected within the 10-day discount period and 20% were collected within the 15-day discount period
- Recoveries were immediately collected upon setting back the receivable
- The entity follows the percentage of accounts receivable to determine the balance of allowance for bad debts
Requirements:
1. What is the adjusted balance of the Accounts Receivable account as of December 31, 2016?
2. How much is the bad debts expense for 2016?
3. What is the adjusted balance of the Allowance for Bad Debts account as of December 31, 2016?
4. What is the carrying value of accounts receivable as of December 31, 2016?
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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