1. Ulysses started business on January 1, 2019. His book on December 31, 2019 among others showed:

     Accounts Receivable 125,650

     Sales 367,280

     Sales Returns and Allowances 3,180

     Bad debts provided for 2019 was 3% of net sales. During 2020, sales amounted P460,700 out of which P3,700 were returned by the customers. Cash received from customers amounted to P235,112.50, of which P132,112.50, after 2-1/2 percent discount, pertains to 2020 sales.

     Of the 2019 accounts, P1,500 are worthless.

     Bad debts provision for 2020 is 2% of net sales.

Required: All entries should have explanation (e.g. To record sales allowance for bad debts as follows:)

1. Entries to record sales in 2019, including its subsequent collection.

2. Entry to record the allowance for bad debts on December 31, 2019.

3. Entries to record sales in 2020, including collection of previous and current receivables.

4. Entry to record the write-off of worthless accounts.

5. Entry to record the allowance for bad debts on December 31, 2020.

6. How much is net sales for the year 2020?

7. How much is net realizable value of the accounts receivable on December 31, 2020?

2. Missy received from a customer a one-year, P375,000 note bearing annual interest of 8%. After holding the note for six months, Missy discounted the note at Platinum Bank at an effective rate of 10%. If the discounting is treated as a sale, what amount of loss on discounting should Missy recognize?

3. On December 1, 2019, Chris Company assigned on a non-notification basis accounts receivable of P3,000,000 to a bank in consideration for a loan of 80% of the receivables less a 5% service fee on the accounts assigned. The interest rate of the loan is 12% per annum. The company collected assigned accounts of P2,000,000 and remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The interest rate is 1% per month on the outstanding balance of the loan.

In its December 31, 2019 balance sheet, what amount of note payable should Chris report as current liability?

4. Matthew Corporation had a specific receivable from a customer in the amount of P600,000 as of December 31, 2019. During 2020, the customer informed Matthew Corporation that servicing of its payable will be made once there is significant improvement in their financial capabilities. Since there are no available historical data relating to similar borrowers, Matthew Corporation uses its experienced judgment to estimate the amount of impairment loss. Reasonable estimate revealed that the fair value of the receivable as of December 31, 2020 represents 40% of the outstanding receivable.

What amount of impairment loss on its receivable should Matthew report for 2020?