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Name: Date:
Program/Major/Yr.: Score:
DIRECTION: Read and solve the following items. Write your answer on the space provided
before each number.
PROBLEM 1. Sunflower Company sells a variety of imported goods. By selling on credit, Sunflower
cannot expect to collect 100% of its accounts receivable. At December 31, 2015, Sunflower reported
the following on its statement of financial position:
During the year ended December 31,2016, Sunflower earned sales revenue of P537,702,500 and
collected cash of P528,070,500 from customers. Assume bad debt expense for the year was 1% of
sales revenue and that Sunflower wrote off uncollectible accounts totaling P5,439,500.
PROBLEM 2.The following amounts are shown on the 2016 and 2015 financial Statements of San
Francisco Co.:
2016 2015
Accounts receivable ? P 470,000
Allowance for bad debts 20,000 10,000
Net sales 2,600,000 2,400,000
Cost of goods sold 1,900,000 1,752,000
San Francisco Co.’s accounts receivable turnover for 2016 is 6.5 times.
PROBLEM 3.In your audit of LidliddaPlastic Products Co., you noted that the company’s statement
of financial position shows the accounts receivable at December 31,2015 as follows:
Page 1 of 5
A member of the
Unified La Consolacion College
La Consolacion College Tanauan – South Luzon
e. The company decided to provide P184,000 for doubtful accounts by journal entry at the end of the
year.
f. Accounts receivable of P5,600,000 have been pledged to a local bank on loan of P3,200,000.
Collections of P1,200,000 were made on these receivables (not included in the collections previously
given) and applied as partial payment to the loan.
PROBLEM 4.Calachuchi Corp’s account receivable subsidiary ledger shows the following
information:
The estimated bad debt rates below are based on Calachuchi Corp’s receivable collection
experience.
The allowance for bad debts account had a debit balance of P5,500 on December 31,2016, before
adjustment.
____________ The company’s accounts receivable under “61-90 days” category should be
____________ The company’s accounts receivable under “91-120 days” category should be
____________ The allowance for bad debts to be reported on the statement of financial position at
December 31,2016, is
PROBLEM 5.The following selected transactions during the year ended December 31,2016:
At year-end, the company provides for estimated bad debt losses by crediting the Allowance for Bad
Debts account for 2% of its net credit sales for the year.
PROBLEM 6.Coconut Co. estimates its bad debt expense to be 3% of net sales. The company’s
unadjusted trial balance at December 31,2016, included the following accounts:
Debit Credit
Allowance for bad debts P 8,000
Sales 2,600,000
Sales returns and allowances P45,000
PROBLEM 7.The notes receivable account of Caimito, Inc. consisted of the following:
1. 60-day note of P10,000 dated May 15 with a 9% interest rate, discounted at the bank on June 8 at
12%.
2. 120-day note of 100,000 (face amount) dated October 1 with no stated interest rate and a market
rate of 9% interest, discounted at the bank on November 30 at 12%. The note was received from the
sale of equipment.
PROBLEM 8.Your audit disclosed that on DECEMBER 31,2016, the accountsreceivable control
account of Alilem Company had a balance of P2,865,000. An analysis of the accounts receivable
balance account showed the following:
Page 3 of 5
A member of the
Unified La Consolacion College
La Consolacion College Tanauan – South Luzon
PROBLEM 9.An analysis and aging of Burgos Corp. accounts receivable at December 31,2016,
disclosed the following:
___________ What is the net realizable value of Burgos’ receivables at December 31,2016?
PROBLEM 10.The following accounts were taken from Cervantes Inc.’s statement of financial
position at December 31,2016
Debit Credit
Accounts receivable P4,100,000
Allowance for doubtful accounts 100,000
Net credit sales P7,500,000
____________If the doubtful accounts are 3% of accounts receivable, determine the bad debts
expense to be reported
PROBLEM 11. You were able to obtain the following information from your audit of Magsingal
Corporations’s accounts receivable and allowance for doubtful accounts:
From the general ledger you noted that the accounts receivable has a balance of P848,000 as of
December 31,2016. Below is a transcript of the allowance for doubtful accounts:
The summary of the subsidiary ledger as of December 31,2016 was totaled as follows:
Debit balance
Under one month P360,000
One to six months 368,000
Over six months 152,000
P880,000
Credit balance
Alien P8,000 OK ; Additional billing in Jan 2017
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A member of the
Unified La Consolacion College
La Consolacion College Tanauan – South Luzon
It is agreed that 1 percent is adequate for accounts under one month. Accounts one to six months
are analyzed as follows:
____________The present value of the expected future cash flows as of December 31,2016
____________The loam impairment loss
____________ Interest income for the year 2017
____________Carrying amount of the loan as of December 31,2018
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