You are on page 1of 2

Ateneo de Zamboanga University

School of Management and Accountancy


Financial Accounting, Part I

Assignment 2: Accounts receivable


Instructor: Kelvin Jaluag Culajara, BSA, CPA

Case 1: Terms of sale


ABC Co. received a sale order for a credit sale of goods with selling price of P1,000.
The goods were shipped by ABC on December 31, 2016 and were received by the buyer on
January 2, 2017. The related shipping costs amounted to P10. ABC Co. collected the
receivable on January 5, 2017. Prepare the pertinent entries in the books of ABC Co.
under the different terms of sale:
FOB shipping point, freight collect
FOB destination, freight prepaid
FOB shipping point, freight prepaid
FOB destination, freight collect

Case 2: Accounting for discounts


BBC Company sells inventory with a list price of P10,000 on account under credit terms
of 20%, 10%, 2/10, n/30.

Journalize the transactions using the gross and net methods, assuming:
Collection is made within the discount period
Collection is made beyond the discount period

Case 3: Percentage of credit sales method


ABC Co. has the following information on December 31, 2016 before any year-end
adjustments.
Allowance for doubtful accounts, Jan. 1, P8,000
Write-offs, P5,000
Recoveries, P1,000
Sales (including cash sales of P100,000), P600,000
Sales returns and discounts (including P1,000 sales returns on cash sales),
P6,000
Accounts receivable, Dec. 31
Percentage of credit sales, 2%

Requirements: Journalize the bad debts expense, and compute for the following:
1. Bad debt expense
2. Allowance for doubtful accounts on December 31
3. Net realizable value of accounts receivable

Case 4: Percentage of receivable method


ABC Co. has the following information on December 31, 2016 before any year-end
adjustments.
Accounts receivable, Jan. 1, P80,000
Net credit sales, P270,000
Collections from customers (excluding recoveries), P140,000
Allowance for doubtful accounts, Jan. 1, P10,000
Write-offs, P5,000
Recoveries, P1,000
Percentage of receivables, 5%

Requirements: Journalize the bad debts expense, and compute for the following:
1. Bad debt expense
2. Allowance for doubtful accounts on December 31
3. Net realizable value of accounts receivable
Case 5: Aging of receivables
Calachuchi Corporations accounts receivable subsidiary ledger shows the following
information:

Account Balance Invoice


Customer Dec. 31, 2016 Date Amount
Aruy, Inc. 35,180 12/06/2016 14,000
11/29/2016 21,180
Naku Co. 20,920 9/27/2016 12,000
8/20/2016 8,920
Syak Co. 30,600 12/08/2016 20,000
10/25/2016 10,600
Trip Co. 45,140 11/17/2016 23,140
10/09/2016 22,000
Uy Co. 31,600 12/12/2016 19,200
12/02/2016 12,400
Xak Co. 17,400 09/12/2016 17,400

The estimated bad debt rates below are based on Calachuchi Corp.s receivable
collection experience.

Age of accounts Rate


0 30 days 1%
31 60 days 1.50%
61 90 days 3%
91 120 days 10%
Over 120 days 50%

Requirements: Journalize the bad debts expense, and compute for the following:
1. Bad debt expense
2. Allowance for doubtful accounts on December 31
3. Net realizable value of accounts receivable

You might also like