1. PARIS Corp.’s accounts payable at December 31, 20x9, totaled P1,700,000 before any necessary year-end adjustments relating to the following transactions: On December 27, 20x9, Belgium wrote and recorded checks to creditors totaling P400,000. The checks were mailed out on January 10, 20x10. On December 21, 20x9, Belgium purchased and received goods for P300,000, terms 2/10, n/30. The invoice was recorded on January 2, 20x10. The company is using the gross method. Goods shipped FOB destination on December 20, 20x9 from a vendor to Belgium were lost in transit. The invoice cost of P35,000 was not recorded as of the balance sheet date. Goods shipped FOB destination on December 26, 20x9 from a vendor were received December 29, 20x9. The invoice cost of P150,000 was recorded on December 30, 20x9. Goods shipped FOB supplier on December 22, 20x9, from a supplier, were still in transit on December 31, 20x9. The invoice cost of P47,500 was not recorded as of balance sheet date. At December 31, 20x9, what amount should Belgium report as total accounts payable?
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
1. PARIS Corp.’s accounts payable at December 31, 20x9, totaled P1,700,000 before any necessary year-end adjustments relating to the following transactions:
- On December 27, 20x9, Belgium wrote and recorded checks to creditors totaling P400,000. The checks were mailed out on January 10, 20x10.
- On December 21, 20x9, Belgium purchased and received goods for P300,000, terms 2/10, n/30. The invoice was recorded on January 2, 20x10. The company is using the gross method.
- Goods shipped FOB destination on December 20, 20x9 from a vendor to Belgium were lost in transit. The invoice cost of P35,000 was not recorded as of the
balance sheet date. - Goods shipped FOB destination on December 26, 20x9 from a vendor were received December 29, 20x9. The invoice cost of P150,000 was recorded on December 30, 20x9.
- Goods shipped FOB supplier on December 22, 20x9, from a supplier, were still in transit on December 31, 20x9. The invoice cost of P47,500 was not recorded as of balance sheet date.
At December 31, 20x9, what amount should Belgium report as total accounts payable?
2. Super-9 Company, places a coupon in each box of its product. Customers may send in ten coupons and P3 and the company will send them a romantic pillow. Sufficient pillows were purchased at P5.40 a piece. During 20x9, 1,260,000 boxes were sold. It was estimated that a total of 5% of the coupons will be redeemed. How much is the liability for premiums outstanding as of December 31, 20x9?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
