The accounts receivable of DEF Corporation were stated at P1,967,000 in its balance sheet as of...

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The accounts receivable of DEF Corporation were stated at P1,967,000 in its balance sheet as of December 31, 2022. Upon analysis, the unadjusted balance of the account was found to consist of the following items: Due from customers on open account (after deducting accounts with credit balances of P6,000) Due from customers evidenced by written promissory notes Claim for damages acknowledged by court Claim for tax refund with BIR Advances to an affiliated company Loans to officers and employees Deposits for contracts on construction bids Unpaid capital stock subscriptions Advances to creditors for merchandise purchased but not received Cash advanced to employees for traveling expenses Allowance for doubtful accounts P1,325,000 300,000 22,500 30,000 150,000 13,500 67,500 60,000 Sn 24,000 4,500 FOR [30,000) P1,967,000 The following transactions were also noted in 2022: • On December 31, customers' accounts of P200,000 have been pledged to a local bank on a 3-month loan of P150,000, subject to an interest rate of 10%. No collections were made on the accounts to date. The client recorded the transaction by debiting cash and crediting accounts receivable for the proceeds. • On December 31, the company assigned P300,000 of customers' accounts to secure a 17%, P240,000 note due in 6 months. A 1% commission based on the accounts assigned was charged and deducted from the cash received. No collections were made on the accounts to date. The client recorded this transaction by debiting cash and crediting notes payable for the proceeds. On October 1, the company factored P100,000 of customers' accounts to a financial institution on a without recourse basis. The factor charges a 5% factoring fee and requires a 10% holdback. The client recorded the transaction by debiting cash and crediting notes payable for the proceeds. On September 1, the company discounted a P150,000, 6-month note received from a customer on the same date on a recourse basis at 8%. The note bears interest of 12% per annum. The client recorded the transaction by debiting cash and crediting recourse liability for the proceeds. REQUIREMENTS: a. Determine the carrying value of trade receivables to be presented as of December 31, 2022. b. Determine the carrying value of non-trade receivables to be presented as of December 31, 2022. c. Prepare the correcting entries (if any) to the receivable financing transactions noted in 2022. The accounts receivable of DEF Corporation were stated at P1,967,000 in its balance sheet as of December 31, 2022. Upon analysis, the unadjusted balance of the account was found to consist of the following items: Due from customers on open account (after deducting accounts with credit balances of P6,000) Due from customers evidenced by written promissory notes Claim for damages acknowledged by court Claim for tax refund with BIR Advances to an affiliated company Loans to officers and employees Deposits for contracts on construction bids Unpaid capital stock subscriptions Advances to creditors for merchandise purchased but not received Cash advanced to employees for traveling expenses Allowance for doubtful accounts P1,325,000 300,000 22,500 30,000 150,000 13,500 67,500 60,000 Sn 24,000 4,500 FOR [30,000) P1,967,000 The following transactions were also noted in 2022: • On December 31, customers' accounts of P200,000 have been pledged to a local bank on a 3-month loan of P150,000, subject to an interest rate of 10%. No collections were made on the accounts to date. The client recorded the transaction by debiting cash and crediting accounts receivable for the proceeds. • On December 31, the company assigned P300,000 of customers' accounts to secure a 17%, P240,000 note due in 6 months. A 1% commission based on the accounts assigned was charged and deducted from the cash received. No collections were made on the accounts to date. The client recorded this transaction by debiting cash and crediting notes payable for the proceeds. On October 1, the company factored P100,000 of customers' accounts to a financial institution on a without recourse basis. The factor charges a 5% factoring fee and requires a 10% holdback. The client recorded the transaction by debiting cash and crediting notes payable for the proceeds. On September 1, the company discounted a P150,000, 6-month note received from a customer on the same date on a recourse basis at 8%. The note bears interest of 12% per annum. The client recorded the transaction by debiting cash and crediting recourse liability for the proceeds. REQUIREMENTS: a. Determine the carrying value of trade receivables to be presented as of December 31, 2022. b. Determine the carrying value of non-trade receivables to be presented as of December 31, 2022. c. Prepare the correcting entries (if any) to the receivable financing transactions noted in 2022.

Answer rating: 100% (QA)

To determine the carrying value of trade and nontrade receivables as of December 31 2022 we need to ... View the full answer