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Handout 05 - Notes and Loans Receivable

The document provides financial information and transactions for various companies, including accounts receivable, notes receivable, and bad debt estimates for the years ending December 31, 2014. It outlines specific transactions such as sales on credit, collections, and write-offs, while also posing questions regarding account balances and necessary journal entries. Additionally, it discusses the impact of these transactions on financial statements and the estimation of bad debts based on sales revenue.

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27 views8 pages

Handout 05 - Notes and Loans Receivable

The document provides financial information and transactions for various companies, including accounts receivable, notes receivable, and bad debt estimates for the years ending December 31, 2014. It outlines specific transactions such as sales on credit, collections, and write-offs, while also posing questions regarding account balances and necessary journal entries. Additionally, it discusses the impact of these transactions on financial statements and the estimation of bad debts based on sales revenue.

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pztndf45jw
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© © All Rights Reserved
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‘The December 31, 2013 statement af financial position of the UPAT COMPANY included the following information: ‘Accounts receivable 572,000 Less: Allowance for bad debts £42,300) P829,700 Notes receivable* __ 65,400 Total receivables 695.100 "The company is cortingently ale for dsocurtec nctes cece vad of F1.24,000. During the year ending December 31, 2014, the following transactions, occurred: . 1. Sales on credit 2,623,600 2. Collections of accounts receivable 2,523,000 3. Accounts receivable writen off as uncollectible 41,400 4, Notes receivable collected 87,000 5. Customer notes received in payment of accounts, receivable 216,000 6. Notes receivable discounted that were paid ‘at maturity 208,000 7: Notes receivable discounted thet were defaulted, including interest of P60 and a PIS fee. This amount is expected to be collected during 2015 6,075 8. Proceeds from customer notes discounted with recourse (principal P135,000, accrued interest, 600) 135,225, 9. Collections on accounts previously written off 1,500 10, Sales returns and allowances (on credit sales) 6,009 11. Bad debts were estimated to be 1.5% of credit sales Based on the preceding information, determine the balances of the fol- fowing accounts at December 31, 2014. 1. Accounts receivable A, P515,a75 C. Fa73,71B B. PS13,975 BD. =509,400 2, _Alkemance for doubiful accounts AL P39,357 C P+0,857 8. PAL757 BD. P40,800 3. Notes receivable A. P59,500) c. P329.400 8. P200,400 1B. pi94,400 4. Notes reca!vable discounted c. P129,000 B. P120,000 He 2016 oucit of tne fnancal statements of

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