PROBLEMS: ACCOUNTS RECEIVABLES 5. Melissa Company operates in an industry that has a high rate of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
PROBLEMS: ACCOUNTS RECEIVABLES 5. Melissa Company operates in an industry that has a high rate of bad debts. On December 31, 2023, before the preparation of an aging schedule and any year-end adjustments, the balance of Melissa's Accounts Receivable account was P6,000,000 and the Allowance for Doubtful Accounts had a balance of P500,000 on January 1, 2023. There were P200,000 write-offs during the year, while P50,000 were recovered. The year-end balance reported in the statement of financial position for the Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account Outstanding Less than 16 days Between 16 and 50 days Between 51 and 100 days Between 101 and 200 days Between 201 and 365 days Over 365 days Amount 2,000,000 1,500,000 1,200,000 600,000 400,000 300,000 Age 0 - 15 days 16-30 days Over 30 days What is the doubtful accounts expense of Melissa Company for the year ended December 31, 2023? Probability of Collection 95% 90% 85% 80% 70% 60% 6. Beatrice Company sells to wholesalers on terms of 5/15, net 30. Beatrice has no cash sales but 50% of customers take advantage of the discount. Beatrice uses the gross method of recording sales. An analysis of accounts receivable on December 31, 2023, revealed the following: Amount 6,000,000 3,000,000 1,000,000 Collectible 100% 90% 50% In the December 31, 2023, statement of financial position, what amount should be reported as net realizable value of the accounts receivable? PROBLEMS: ACCOUNTS RECEIVABLES 1. The following data were taken from the records of Jerome Company for the year ended December 31, 2023, its first year of operations: Sales on account Collections from customers (excluding collections from recoveries) Doubtful accounts expense returns Discounts taken by customers Collections on accounts written off 120,000 Sales allowance 300,000 Accounts written off 30,000 What is the balance of accounts receivable on December 31, 2023? What is the net realizable value of this account receivable on December 31, 2023? 2020 2021 2022 2023 Credit Sales 10,000,000 14,000,000 16,000,000 25,000,000 2. Hanz Company uses the gross method of accounting for cash discounts. In one of its transactions on December 28, 2023, Hanz sold merchandise with a list price of P5,000,000 to a client who was given a trade discount of 20% and 10%. Credit terms given by Hanz were 5/10, n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the client was P50,000. On December 30, 2023, the client returned damaged goods originally billed at P300,000. Hanz estimates that the client will take advantage and avail of the cash discount before the end of the 10-day discount period. Writeoffs 250,000 400,000 650,000 1,100,000 15,000,000 3. On January 1, 2023, the balance of accounts receivable of Cathy Company was P5,000,000 and the allowance for doubtful accounts was P800,000. The following data were gathered: Total accounts receivable Less: Allowance for doubtful accounts Net realizable value 12,200,000 100,000 Sales 12/31/2023 P10,500,000 20,000 600,000 9.900,000 80,000 How much accounts receivable was written off by Macdonald during the 2023? Doubtful accounts are provided for as percentage of credit sales. The accountant calculates the percentage annually by using the experience of the three years prior to the current year. How much is the allowance for doubtful accounts on December 31, 2023? 4. Macdonald Company reported the following balances (after adjustment) at the end of 2023 and 2022. Recoveries 20,000 30,000 50,000 150,000 12/31/2022 P9,600,000 150,000 9.450.000 During 2023, Macdonald recognized doubtful accounts expense of 500,000 and collected 50,000 on accounts written off in previous years. PROBLEMS: ACCOUNTS RECEIVABLES 7. Effective with the year ended December 31, 2023, Vega Company adopted the aging of accounts receivable method instead of the old percentage of sales method. Vega has practiced providing interim provisions during the year by applying a certain percentage to credit sales. The following data are available: Allowance for doubtful accounts, January 1, Provisions for doubtful accounts (5% of credit sales) Accounts written off Estimated uncollectible accounts per aging 12/31/2023 Accounts written off but recovered What is the 2023 year-end adjustment to doubtful accounts expense? No. of Days Outstanding 0-30 days 31-60 days Over 60 days The following additional information is available for the current year: Net credit sales for the year 8. Explore Company uses the allowance method of accounting for bad debts. The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the current year. Amount P5,000,000 2,000,000 1,000,000 Allowance for Doubtful Accounts: Balance, January 1 Balance before adjustment, December 31 4,500,000 1,000,000 3,000,000 300,000 100,000 P50,000,000 Probability of Collection .98 .90 .80 450,000 (cr) 20,000 (dr) If Explore determines bad debt expense using the aging method, how much is the doubtful accounts expense? PROBLEMS: ACCOUNTS RECEIVABLES 5. Melissa Company operates in an industry that has a high rate of bad debts. On December 31, 2023, before the preparation of an aging schedule and any year-end adjustments, the balance of Melissa's Accounts Receivable account was P6,000,000 and the Allowance for Doubtful Accounts had a balance of P500,000 on January 1, 2023. There were P200,000 write-offs during the year, while P50,000 were recovered. The year-end balance reported in the statement of financial position for the Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account Outstanding Less than 16 days Between 16 and 50 days Between 51 and 100 days Between 101 and 200 days Between 201 and 365 days Over 365 days Amount 2,000,000 1,500,000 1,200,000 600,000 400,000 300,000 Age 0 - 15 days 16-30 days Over 30 days What is the doubtful accounts expense of Melissa Company for the year ended December 31, 2023? Probability of Collection 95% 90% 85% 80% 70% 60% 6. Beatrice Company sells to wholesalers on terms of 5/15, net 30. Beatrice has no cash sales but 50% of customers take advantage of the discount. Beatrice uses the gross method of recording sales. An analysis of accounts receivable on December 31, 2023, revealed the following: Amount 6,000,000 3,000,000 1,000,000 Collectible 100% 90% 50% In the December 31, 2023, statement of financial position, what amount should be reported as net realizable value of the accounts receivable? PROBLEMS: ACCOUNTS RECEIVABLES 1. The following data were taken from the records of Jerome Company for the year ended December 31, 2023, its first year of operations: Sales on account Collections from customers (excluding collections from recoveries) Doubtful accounts expense returns Discounts taken by customers Collections on accounts written off 120,000 Sales allowance 300,000 Accounts written off 30,000 What is the balance of accounts receivable on December 31, 2023? What is the net realizable value of this account receivable on December 31, 2023? 2020 2021 2022 2023 Credit Sales 10,000,000 14,000,000 16,000,000 25,000,000 2. Hanz Company uses the gross method of accounting for cash discounts. In one of its transactions on December 28, 2023, Hanz sold merchandise with a list price of P5,000,000 to a client who was given a trade discount of 20% and 10%. Credit terms given by Hanz were 5/10, n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the client was P50,000. On December 30, 2023, the client returned damaged goods originally billed at P300,000. Hanz estimates that the client will take advantage and avail of the cash discount before the end of the 10-day discount period. Writeoffs 250,000 400,000 650,000 1,100,000 15,000,000 3. On January 1, 2023, the balance of accounts receivable of Cathy Company was P5,000,000 and the allowance for doubtful accounts was P800,000. The following data were gathered: Total accounts receivable Less: Allowance for doubtful accounts Net realizable value 12,200,000 100,000 Sales 12/31/2023 P10,500,000 20,000 600,000 9.900,000 80,000 How much accounts receivable was written off by Macdonald during the 2023? Doubtful accounts are provided for as percentage of credit sales. The accountant calculates the percentage annually by using the experience of the three years prior to the current year. How much is the allowance for doubtful accounts on December 31, 2023? 4. Macdonald Company reported the following balances (after adjustment) at the end of 2023 and 2022. Recoveries 20,000 30,000 50,000 150,000 12/31/2022 P9,600,000 150,000 9.450.000 During 2023, Macdonald recognized doubtful accounts expense of 500,000 and collected 50,000 on accounts written off in previous years. PROBLEMS: ACCOUNTS RECEIVABLES 7. Effective with the year ended December 31, 2023, Vega Company adopted the aging of accounts receivable method instead of the old percentage of sales method. Vega has practiced providing interim provisions during the year by applying a certain percentage to credit sales. The following data are available: Allowance for doubtful accounts, January 1, Provisions for doubtful accounts (5% of credit sales) Accounts written off Estimated uncollectible accounts per aging 12/31/2023 Accounts written off but recovered What is the 2023 year-end adjustment to doubtful accounts expense? No. of Days Outstanding 0-30 days 31-60 days Over 60 days The following additional information is available for the current year: Net credit sales for the year 8. Explore Company uses the allowance method of accounting for bad debts. The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the current year. Amount P5,000,000 2,000,000 1,000,000 Allowance for Doubtful Accounts: Balance, January 1 Balance before adjustment, December 31 4,500,000 1,000,000 3,000,000 300,000 100,000 P50,000,000 Probability of Collection .98 .90 .80 450,000 (cr) 20,000 (dr) If Explore determines bad debt expense using the aging method, how much is the doubtful accounts expense?
Expert Answer:
Answer rating: 100% (QA)
1 Melissa Company Beginning balance of Allowance for Doubtful Accounts AFDA P500000 Writeoffs during ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 9781119790976
18th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these finance questions
-
Bad-Debt ReportingAging Mani Low Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Mani lows Accounts Receivable account was...
-
Mary Pierce Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Pierce's Accounts Receivable account was $555,000 and the Allowance...
-
Summarize the extract given below? When Paul Farmer graduated from Duke University at 22, he was unsure whether he wanted to be an anthropologist or a doctor. So he went to Haiti. As a student, Paul...
-
The common stock of Leaning Tower of Pita, Inc., a restaurant chain, will generate the following payoffs to investors next year: The company goes out of business if a recession hits. Calculate the...
-
Using the following Data for a "Floor" agreement: XYZ Co. buys a Floor Agreement from Widget Co. The Strike is 6% on the Russell 2000 Stock Index; Notional Amount is 20 Million dollars; Time: 5...
-
Several professionals are listed as being part of compliance efforts with regard to participation in the examination of potential compliance violations. Identify at least three other categories of...
-
Milan Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static...
-
1. A clothes dryer rates at 4000 W runs for 1.50 hours each day. it uses utility power at 240 V. how much current does the dryer use? 2. For the clothes dryer in the previous question, how much does...
-
Mariah Enterprises makes a variety of consumer electronic products. Its camera manufacturing plant is considering choosing between two different processes, named Alpha and Beta, which can be used to...
-
Use the quotient rule to find the derivative of the following x7x+8 X +9
-
Over coffee and croissants at breakfast one day, your friend Juan (an expert chemist) says this: "Metal sulfides roasted with oxygen produce the corresponding oxide and sulfur dioxide gas." Using...
-
4. Ethanol, CH5OH (46.07 g/mol), melts at -114.1C and boils at 78.4C. Calculate the amount of heat required to convert 50.0 g of ethanol vapor at 78.4C to solid ethanol at -125.0C. AHfus (CH5OH) =...
-
1- The following rigid plate has a weight of 1000 kN and it is suspended by 4 cables. The geometric and material properties of the cables are presented in the table below. 2 m 2 4m 2 m a) Check the...
-
If the change in distance between any two points on an object is zero when forces are applied to it, the object is described as: Stationary. O Having a constant mass. O A rigid body. O A deformable...
-
A student proposes the following Lewis structure for the dinitrogen monoxide (NO) molecule. N=0=N Assign a formal charge to each atom in the student's Lewis structure. atom left N ** O right N formal...
-
What reagent(s) would you use to conduct the following transformations? Ph Ph 42. OH CH3 H3C OH Ph Ph 43.
-
The area of a rectangle is 30 cm 2 and its perimeter is 26 cm. Find the length and width of the rectangle.
-
Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2025. 1. Mooney Co. has developed the...
-
On December 21, 2025, Bucky Katt Company provided you with the following information regarding its equity investments. During 2026, Colorado Co. stock was sold for $9,400. The fair value of the stock...
-
Charles Austin of the controllers office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2026. Austin...
-
Identify the most promising areas of research for future researchers in the area of hedge fund systemic risk.
-
Discuss how hedge funds and the potential for shadow banking may contribute to systemic risk and the prospect for contagion.
-
Explain the relation between hedge fund characteristics and risks.
Study smarter with the SolutionInn App