Solve the following questions
The Cash 1, 764, 000 Credit Card Service Charge 36, 000 evite Accounts Receivable - Citibank Visa 1, 800, 000 Another arrangement for credit card transaction allows the credit card receipts to be deposited directly to the company's current account. This arrangement is, in effect, a cash sale. The credit card sales are the responsibility of the credit card- issuing bank and the customers pay directly to them. Any uncollectible accounts from these transactions are considered as losses of the credit card- issuing bank. Activities/Assessments: Exercise 4-1: Aye-Ahr sold goods with a list price of P50, 000 under credit terms 10% 2/10, n/45. Required: Provide journal entries under Gross Method and Net Method using the following assumptions: 1. The customers pay within the discount period. 2. The customers pay beyond the discount period. Exercise 4-2: Aye-Ahr sold goods with a list price of P50, 000 under credit terms 10% 2/10, n/45. Aye-Ahr estimates that 75% of the available cash discount will be taken by the customer. Assume further that the estimate coincides with actual result. Required: In accordance with IFRS15, provide journal entries to record the above transactions based on the following assumptions: 1. Aye-Ahr does not use a sales discount account. 2. Aye-Ahr uses a sales discount account. Exercise 4-3: Ressie Bubbles Co. uses the aging method of estimating credit losses on its accounts receivable. Ressie prepared the following schedule for aging of accounts receivables: No. of Days Outstanding Amount % of Uncollectible 0-30 days P800, 000 1% 31-60 days 500, 000 3% 61-90 days 300, 000 5% 91-120 days 200, 000 7% Over 120 days 100, 000 10% Additional Information: . Allowance for bad debts, Jan. 1, 2020 P15, 000 Accounts written-off during the period 8, 000 Recovery of accounts previously written-off 5, 000 Required: 1. Compute for the required balance of allowance for bad debts and net realizable value of accounts receivables 2. Provide journal entries to recognize bad debt expense. LESSON 5 - ACCOUNTING FOR NOTES RECEIVABLES