In December 2018, the Accounts Receivable controlling account on the books of Stag Co. showed one debit posting and two credit postings. The debit represents receivables from December saIes of P260,000. One credit was for P156,800, made as a result of cash collections on November and December receivables; the second credit was an adjustment for estimated uncollectibles of P30,000. The December 31 balance was P90,000.
When receivables were collected, the bookkeeper credited Accounts Receivable for the cash collected. All customers who paid accounts during December took advantage of the 2% cash discount.
As of December 1, debit balances in customers’ subsidiary accounts totaled P59,000. An adjustment for estimated doubtful accounts of P6,000 had been posted to the Accounts Receivable controlling account at the end of 2017, and no write-offs were recorded during 2018. In addition, a number of customers had overpaid their accounts, and as a result, some of the Customers’ subsidiary accounts had credit balances on December 1. No overpayments were made during December.
Additional data relating December sales follow:
a. Sales of P10,000 for customer with credit balances in customers’ accounts beginning of December were shipped December 24, terms FOB shipping point. The company recorded this transaction by a debit to Accounts receivable and credit to Sales.
b. A P10,000 shipment of goods to a customer on December 29, 2018, terms FOB shipping points 2/10, n/30, was not recorded as a sale in 2018. The goods were excluded in the ending inventory in 2018. The freight of P1,000 was prepaid by Stag Co. The company recorded the freight by a debit to freight out and credit to Cash.
c. A P15,000 shipment of goods to a customer on December 31, 2018, terms FOB destination, 2/10, n/30, was recorded as a sale in 2018. The goods were included the ending inventory in 2018. The freight of P1,000 was prepaid by stag Co. The company recorded the freight by a debit to Freight out and credit to Cash.
Based on the above data, compute for the following:
1. Customer’s credit balances at the beginning of December
2. Credit to accounts receivable as a result of collection in December.
3. Customer’s credit balances at December 31.
4. Adjusted Net Sales for month of December.
5. Adjusted Accounts receivable, December 31