Question
The CVM Corporation was organized in 20x1. In the same year, CVM had a total revenue of P250,000. Records showed P200,000 of this was collected
-
The CVM Corporation was organized in 20x1. In the same year, CVM had a total revenue of P250,000. Records showed P200,000 of this was collected during the year. Based on the percentage of collections in the past, the CVM estimates 10% of the accounts may prove uncollectible. The balance of the Allowance for credit losses account before making adjustments is P2,000. (5pts)
The CVM Corporation was organized in 20x1. In the same year, CVM had a total revenue of P250,000. Records showed P200,000 of this was collected during the year. Based on the percentage of collections in the past, the CVM estimates 10% of the accounts may prove uncollectible. The balance of the Allowance for credit losses account before making adjustments is P2,000. (5pts)
Required:
What is the Accounts receivable balance at the end of 20x1?
What should be the balance of the allowance for credit losses account at the end of 20x1?
What is the credit loss that should be recognized in 20x1?
What is the adjusting entry to record the estimated credit loss on December 31, 20x1?
What is the net realizable value of the Accounts receivable at December 31, 20x1?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing Cases An Interactive Learning Approach
Authors: Steven M Glover, Douglas F Prawitt
4th Edition
0132423502, 978-0132423502
