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    Classroom Exercises On Receivables Answers

    Uploaded by

    John Cedfrey Narne
    The document contains sample journal entries for accounting problems related to receivables. Problem 1 shows entries using the gross and net methods of accounting for accounts receivable. Problem 2 calculates an allowance for doubtful accounts based on aging of receivables. Problem 3 records a credit card sale and deposit. Problem 4 records a loan, accrues interest expense, and pays off the loan. Problem 5 provides a template for entries related to factored receivables.

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    Classroom Exercises On Receivables Answers

    Uploaded by

    John Cedfrey Narne
    203 views4 pages
    The document contains sample journal entries for accounting problems related to receivables. Problem 1 shows entries using the gross and net methods of accounting for accounts receivable. Problem 2 calculates an allowance for doubtful accounts based on aging of receivables. Problem 3 records a credit card sale and deposit. Problem 4 records a loan, accrues interest expense, and pays off the loan. Problem 5 provides a template for entries related to factored receivables.

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    The document contains sample journal entries for accounting problems related to receivables. Problem 1 shows entries using the gross and net methods of accounting for accounts receivable. Problem 2 calculates an allowance for doubtful accounts based on aging of receivables. Problem 3 records a credit card sale and deposit. Problem 4 records a loan, accrues interest expense, and pays off the loan. Problem 5 provides a template for entries related to factored receivables.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    203 views4 pages

    Classroom Exercises On Receivables Answers

    Uploaded by

    John Cedfrey Narne
    The document contains sample journal entries for accounting problems related to receivables. Problem 1 shows entries using the gross and net methods of accounting for accounts receivable. Problem 2 calculates an allowance for doubtful accounts based on aging of receivables. Problem 3 records a credit card sale and deposit. Problem 4 records a loan, accrues interest expense, and pays off the loan. Problem 5 provides a template for entries related to factored receivables.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
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    Classroom Exercises on Receivables Answers

    Problem 1

    1) Gross Method
    July 1, 2020 Accounts Receivable 4,275,000
    Sales 4,275,000

    July 3, 2020 Sales Returns and Allowances 500,000


    Accounts Receivable 500,000

    July 11, 2020 Cash 3,699,500


    Sales Discount 75,500
    Accounts Receivable 3,775,000

    2) Net Method
    July 1, 2020 Accounts Receivable 4,189,500
    Sales 4,189,500

    July 3, 2020 Sales Returns and Allowances 490,000


    Accounts Receivable 490,000

    July 11, 2020 Cash 3,699,500


    Accounts Receivable 3,699,500

    3) Gross Method
    July 11, 2020 Cash 3,775,000
    Accounts Receivable 3,775,000

    3) Net Method
    July 1, 2020 Accounts Receivable 3,775,000
    Sales 3,775,000

    July 11, 2020 Cash 3,775,000


    Accounts Receivable 3,775,000
    Problem 2

    Days Outstanding Amount % Uncollectible Allowance for Doubtful Accounts


    Current P 4,000,000 1 P 40,000
    1 to 30 days past due 3,000,000 2.5 75,000
    31 to 60 days past due 1,800,000 4 72,000
    61 to 90 days past due 1,200,000 10 120,000
    91 to 120 days past due 1,000,000 20 200,000
    121 to 180 days past due 600,000 40 240,000
    181 to 360 days past due 400,000 60 240,000
    More than 360 days past due 150,000 - -
    Total P 980,000

    Allowance for Doubtful Accounts 1,037,000


    Accounts Receivable 1,037,000

    Problem 3

    1. Journal entries needed on the books of Amiable.


    August 1, 2020 Accounts Receivable – McAndrew Bank Credit Card 7,500,000
    Sales 7,500,000
    0

    Cash 7,200,000
    Credit card service charge 300,000
    Accounts Receivable – McAndrew Bank Credit Card 7,500,000

    1. Suppose that Amiable deposits the McAndrew Bank credit card receipts to a current account, and
    Amiable’s account is immediately increased by such deposits. Prepare the entries needed on the
    books of Amiable.
    August 1, 2020 Cash 7,200,000
    Credit card service charge 300,000
    Sales 7,500,000
    Problem 4

    1. Entries needed on the books of Bravo to record the loan, to accrue interest expense, and to
    record the payment of the loan
    July 1, 2020 Cash 10,000,000
    Notes Payable 10,000,000
    0

    December 31, Interest Expense 500,000


    2020
    Interest Payable 500,000

    July 30, 2021 Notes Payable 10,000,000


    Interest Expense 500,000
    Interest Payable 500,000
    Cash 11,000,000

    2. Notes on Bravo’s financial statements that should be disclosed in relation to the note and the
    corresponding pledged receivables.
    Notes to Bravo’s Financial Statements
    Note 1 - Cash
    Cash (*Assumption of 0 cash amount prior to loan) (1,000,000)

    Note 2 – Accounts Receivables (assumption of 16,000,000 AR amount prior to loan)


    Accounts Receivable – assigned as security for the loan from 16,000,000
    Croatia Bank

    Note 3 – Accounts Payable


    Interest Payable 500,000

    Note 4 – Notes Payable


    Notes Payable 10,000,000

    Note 5 - Interest Expense


    Interest Expense 500,000
    Problem 5

    Aug 1, 2020 Accounts Receivable – Assigned to Levin Universal Bank


    Accounts Receivable

    Cash
    Finance Charge
    Notes Payable

    Aug 4, 2020 Sales return and allowances


    Accounts receivable – assigned to Levin Universal Bank

    Aug. 9, 2020 Cash


    Sales Discount
    Accounts receivable – assigned to Levin Universal Bank

    Aug 31, 2020

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