48. The following accounts and their balances appear in an unadjusted trial balance of Melon Company as of December 31, 2020. • Cash and cash equivalents- P400,000 • Inventory- P500,000 • Trade and other receivables- P2,000,000 • Trade and other payables- P670,000 • Subscription receivable- P375,000 • Income tax payable- P196,500 Additional information: Trade and other receivables include long-term advances to company officers amounting to P430,000. The subscription receivable has the following call dates: June 30, 2021, P200,000; December 31, 2021, P100,000; and June 30, 2022, P75,000. Inventory of P500,000 was determined by physical count. On December 31, 2020, goods costing P125,000 are in transit from a supplier. The terms of purchase of said goods are FOB shipping point. The goods and the related invoice have not been received as of year-end. Trade and other payables include dividends payable amounting to P170,000, of which P70,000 is payable in cash and P100,000 is distributable in Melon’s own shares. The total current assets at December 31, 2020, is a) P2,670,000 b) P2,595,000 c) P2,895,000-answer d) P2,770,000 49. Using the date in no 48, the total current liabilities at December 31, 2020 is a) P731,500 b) P866,500 c) P766,500-answer d) P891,500
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.
only need solution
48. The following accounts and their balances appear in an unadjusted
as of December 31, 2020.
• Cash and cash equivalents- P400,000
• Inventory- P500,000
• Trade and other receivables- P2,000,000
• Trade and other payables- P670,000
• Subscription receivable- P375,000
• Income tax payable- P196,500
Additional information:
Trade and other receivables include long-term advances to company officers amounting to
P430,000.
The subscription receivable has the following call dates: June 30, 2021, P200,000; December 31,
2021, P100,000; and June 30, 2022, P75,000.
Inventory of P500,000 was determined by physical count. On December 31, 2020, goods costing
P125,000 are in transit from a supplier. The terms of purchase of said goods are FOB shipping
point. The goods and the related invoice have not been received as of year-end.
Trade and other payables include dividends payable amounting to P170,000, of which P70,000 is
payable in cash and P100,000 is distributable in Melon’s own shares.
The total current assets at December 31, 2020, is
a) P2,670,000
b) P2,595,000
c) P2,895,000-answer
d) P2,770,000
49. Using the date in no 48, the total current liabilities at December 31, 2020
is
a) P731,500
b) P866,500
c) P766,500-answer
d) P891,500
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
