Question
23 The following information is available for QSN Company: Credit sales during 2019 P 8,000,000 Accounts receivable deemed worthless and written off during 2019 180,000
23 The following information is available for QSN Company: Credit sales during 2019 P 8,000,000 Accounts receivable deemed worthless and written off during 2019 180,000 Allowance for doubtful accounts at December 31, 2018 160,000 As a result of a review and aging of accounts receivable in early January 2020, however, it has been determined that an allowance for doubtful accounts of P110,000 is needed at December 31, 2019. What amount should QSN record as doubtful accounts expense for the year ended December 31, 2019? a. P130,000 c. P90,000 b. P110,000 d. P270,000
24 Pertify Corp, an equipment distributor, sells a piece of machinery with a list price of P800,000 to Hope Company. Per agreement, Hope will pay P850,000 in one year evidenced by a note. Pertify normally sells at cash price equivalent to 90% of list price. The note has a market rate of 12%. How much should be recorded as Sales? (The PV of 1 at 12% for 1 year is 0.89) P756,500 c. P850,000 P720,000 d. P800,000
25 On September 1, 2017, Fanta Company sold a piece of land in exchange for a 5-year note with face value of P4,000,000 and bearing interest at 12%. The note is due on August 31, 2022 and interest is payable every August 31 starting on August 31, 2018. What is the amount of interest income to be reported on the December 31, 2019 income statement? (The PV of 1 at 12% for 5 years is 0.56) P268,800 c. P480,000 P160,000 d. P640,000
26. On December 31, 2018, Joy incorporation sold for P150,000 an old machine having an original cost of P270,000 and a book value of P120,000. The terms of the sale were as follows: P30,000 down payment and P120,000 payable on December 31, 2021. The agreement of sale made no mention of interest; however, 9% would be a fair rate for this type of transaction. What should be the carrying amount of the notes receivable on December 31, 2019 rounded to the nearest peso? (Round PVF to 4 decimals) P115,830 c. P156,255 P92,664 d. P101,004
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