exerted extra effort. PROBLEM 6: FOR CLASSROOM DISCUSSION Trade and Non-trade receivables 1. The records of Wee Co. on Dec. 31, 20x1 show the following: Accounts receivable, net of P15,000 credit balance in customers' accts. 158,000 Allowance for uncollectible accounts (8,000) Notes receivable (non-trade) - due on Dec. 31, 20x5 180,000 Claim for tax refund (approved by BIR and due on demand) 12,000 Advances to affiliates (payment due date not yet agreed upon) 900,000 Advances to officers (due in 6 months) 180,000 Dividends receivable 220,000 Selling price of unsold goods sent out on consignment 28,000 at 140% of cost Security deposit on a long-term lease 30,000 Total 1,700,000 Requirement: Compute for the correct amount of total receivables, with sub-classifications for the following: trade receivables, non- trade receivables, current receivable and non-current receivables. Recognition of trade receivables 2. On December 27, 20x1, Bye-bye Duck Co. received a sale order for a credit sale of goods with selling price of P1,600. The goods were shipped by Bye-bye Duck Co. on December 31, 20x1 and were received by the buyer on January 2, 20x2. The971 related shipping costs amounted to P50. Bye-bye Duck Co. 90% collected the receivable on January 5, 20x2. 85 65 Requirement: Provide the entries under each the following ated on the table) shipment terms: (a) FOB shipping point, freight collect; (b) FOB destination, freight prepaid; (c) FOB shipping point, freight prepaid; and ination! @!) (d) FOB destination, freight collect er for grading nt who exerts. Trade and Cash discounts 3. Farmer Dell Co. sold goods with a list price of P100,000 on a credit term of 10%, 3/10, n/45. Requirement (a): Traditional GAAP Provide the journal entries under the (1) Gross method and (2) Net method, respectively. Use the following assumptions: the he following consideration is collected: accts. 158,00 a. within the discount period; and (8,010 b. beyond the discount period. 180,00 12,010 Requirement (b): PFRS 15 900,0 180,00 Additional information: In accordance with PFRS 15, Farmer Dell Co. estimates that 80% of 220,00 the available cash discount will be taken by the customer. Provide 28,00 the journal entries. Assume (1) Farmer Dell Co. does not use a 30,02 sales discount account; and (2) Farmer Dell Co. uses a sales discount account. Assume further that the estimate coincides with 1,700,0 actual result. tal receivable Accounting for bad debts ceivables, not 4. The balances of Boom Co.'s accounts receivable and allowance it receivables for bad debts at the beginning of the period were P120,000 and P9,000, respectively. The following transactions occurred during the period: ved a sale orde a. Sales on account, P250,000 of P1,600. Tre b. Collections of sales on account, P220,000 December 31 ry 2, 20x2. TheChapter 4 Total 222 C. The collectability of P30,000 accounts receivable was found The allowance for bad 210,100. Lakland wro be doubtful d. P15,000 accounts receivable were deemed worthless. accounts during the pe e. P8,000 previously written off accounts receivable w subsequently collected (not included in the collections above) Requirements: Compute balance of allowance Requirements: a) Prepare the journal entries (use the 'allowance method'). amount of accounts rec b) Determine the ending balances of accounts receivable and allowance for bad debts using T-accounts. c) Determine the carrying amount of the accounts receivable at year-end. Estimating doubtful accounts 5. The records of Ship Co. show the following information: Accounts receivable, Jan. 1 180,000 Allowance for bad debts, Jan. 1 (Cr.) 12,600 Sales on account 900,000 Sales returns on credit sales 90,000 Write-offs 15,800 Recoveries 2,600 Collections, excluding recoveries 781,000 Requirements: Compute for the (1) bad debts expense, (2) ending balance of allowance for bad debts, and (3) carrying amount of accounts receivable on Dec. 31 under each of the following scenarios: a. Percentage of net credit sales (2%) b. Percentage of ending receivable (8%) 6. The following pertains to Lakland Co.'s accounts receivable: Days outstanding 0 -60 Amount % uncollectible 61 -90 190,000 1% 91 - 120 240,000 3% Over 120 30,000 7% 10,000 10%Accounts Receivable 223 Total 470,000 The allowance for bad debts account has a beginning balance of P10,100. Lakland wrote-off P4,600 accounts and recovered P200 accounts during the period. Requirements: Compute for the (1) bad debts expense, (2) ending balance of allowance for bad debts, and (3) ending carrying amount of accounts receivable