assignment 1 (AR)

Free Company gathered the following information from its accounting records for the year ended December 31, 2019:

• Net Credit Sales for the year - P680,000
• Accounts Receivable at December 31 - 92,000
• Allowance for doubtful accounts at December 31 - 1,850

REQUIREMENTS:

Provide the needed information based per independent scenario. Show solutions.

Scenario 1:

Assuming the company uses credit sales in estimating doubtful accounts at 1%. Moreover, the allowance for doubtful account is a credit.

a. How much is the bad debts expense for 2019? (5point)

b. How much is the adjusted balance of the allowance for doubtful accounts at December 31? (5points)

c. How much is the net realizable value of the accounts receivable? (5 points)

Scenario 2:

Assuming the company uses accounts receivable in estimating doubtful accounts at 4%. Moreover, the allowance for doubtful account is a credit.

d. How much is the bad debts expense for 2019? (5point)

e. How much is the adjusted balance of the allowance for doubtful accounts at December 31? (5points)

f. How much is the net realizable value of the accounts receivable? (5 points)

Scenario 3:

Assuming the company uses accounts receivable in estimating doubtful accounts at 4%. Moreover, the allowance for doubtful accounts is a debit.

g. How much is the bad debts expense for 2019? (5point)

h. How much is the adjusted balance of the allowance for doubtful accounts at December 31? (5points)

i. How much is the net realizable value of the accounts receivable? (5 points)