EXERCISES
PROBLEM 1
Questions:
1. The accounts receivable as of December 31, 2022 is
a) P15,000 c) P122,200
b) P16,667 d) P150,000
2. The allowance for doubtful accounts as of December 31, 2022 is
a) P1,000 c) P7,332
b) P6,000 d) P9,000
3. The net realizable value of accounts receivable as of December 31, 2022 is
a) P15,367 c) P140,700
b) P114,568 d) P143,700
4. The doubtful accounts expense for 2022 is
a) P1,050 c) P7,382
b) P6,050 d) P9,050
PROBLEM 2
The balance sheet for the DON’T THROW IT ALL AWAY Corporation on December 31,
2022, included the following receivables balances:
Notes Receivables P365,000
Less notes discounted 155,000 P210,000
Accounts Receivable P856,000
Less allowance for doubtful 41,500 814,500
accounts
Interest Receivable 5,250
Transactions during 2023 included the following:
a. Sales on account were P7,670,000.
b. Cash collected on accounts totaled P5,765,000, which included accounts
of P930,000 on which cash discounts of 2% were allowed.
c. Notes received in settlement of accounts totaled P825,000.
d. Notes receivable discounted as of December 31, 2022, were paid at maturity
with the exception of one P30,000 note on which the company had to pay the
bank P30,900, which included interest and protest fees. It is expected that
recovery will be made on this note early 2024.
e. Customer’s notes of P600,000 were discounted with recourse during the year,
proceeds from their transfer being P585,000. Of this total, P480,000 matured
during the year without notice of protest.
f. Customers’ accounts P87,200 were written off during the year as worthless.
g. Recoveries of doubtful accounts written off in prior years were P20,200.
h. Notes receivable collected during the year totaled P270,000 and interest collected
was P24,500.
i. On December 31, accrued interest on notes receivable was P6,300.
j. Uncollectible accounts are estimated to be 5% of the December 31, 2023
Accounts Receivable balance.
k. Cash of P350,000 was borrowed from the bank, accounts receivable of P400,000
being pledged on the loan. Collections of P195,000 had been made on these
receivables (included in the total given in transaction (b) and this amount was
applied on December 31,2023, to payment of accrued interest on the loan of
P6,000, and the balance to partial payment of the loan.
Determine the adjusted balances of the following accounts as of December 31, 2023:
1. Notes Receivable
a. P320,000 c. P165,000
b. P365,000 d. P285,000
2. Notes Receivable Discounted
a. P155,000 c. P120,000
b. P600,000 d. P105,000
3. Interest Receivable
a. P5,250 c. P11,550
b. P6,300 d. P1,050
4. Accounts Receivable
A. P1,861,100 C. P1,860,720
B. P1,830,200 D. P1,461,100
5. Allowance for Doubtful Accounts
a. P93,055 c. P93,036
b. P118,555 d. P67,636
6. Bank Loan or Notes Payable – Bank
a. P350,000 c. P161,000
b. P155,000 d. P211,000
7. Doubtful Accounts Expense for the year ended December 31, 2023.
a. P93,055
b. P118,555
c. P93,036
d. P67,536
