Aging of Accounts ReceivablePresented below is the Accounts Receivable Subsidiary Ledger of Martian Corporation, a customer of PlanetariumCompany, from January 1to June 5, 2021:Martian CorporationP 20,000CustomerCredit LimitTerms2/10, n/30-ReferenceDateParticularsDoc.No.DebitCreditBalance202101 Balance forwarded07 Sales12 CashJan.9,200INV7675,00014,200OR13075,0009,20020 SalesINV8001,20010,40028 Sales- CashINV9651,06011,460OR15189,2002,260-Feb.15 SalesINV9701,2203,48018 SalesINV10011,4004,88022 DM for INV No. 80005 CashDM217724,952OR16892,3322,62027 SalesINV11138363,456FreightDM2231203,57628 CashOR17181,4002,1763,7362,516Mar.02 SalesINV12061,56015 CashOR17901,22028 SalesINV14912,5945,11029 CashOR18689564,154 Accounts ReceivableDebitCreditBeginningCredit SaleXXXXXXCollectionsXXXXXXSales DiscountsXXXReturns and AllowancesXXXWrite-offsTotal balanXXXTotal balancesXXXAccount balXXXSalesDebitCreditXXXCash SalesXXXCredit SalesXXXAccount balance Apr.03 SalesINV16271,6365,79014 CashOR18801,4704,32019 SalesINV17981,4225,74223 CM for INV No. 120626 CashCM121905,652OR19051,4224,23030 SalesINV20014204,650May15 SalesINV20106425,29217 SalesINV21779926,28420 CashOR20961,0625,222Jun.05 CashOR21071,6363,586Required:Determine the age of accounts receivable of Customer Martian Corporation as of May 31, 2021using the following basis:A. First-in, first-out basisB. Specifio invoice basis

It is a method used to determine the amount of receivables those are uncollectable. In order to…

Aging of Accounts Receivable Presented below is the Accounts Receivable Subsidiary Ledger of Martian Corporation, a customer of Planetarium Company, from January 1to June 5, 2021: Customer Credit Limit Terms Martian Corporation P 20,000 - 2/10,n/30

Aging of Accounts Receivable Presented below is the Accounts Receivable Subsidiary Ledger of Martian Corporation, a customer of Planetarium Company, from January 1to June 5, 2021: Customer Credit Limit Terms Martian Corporation P 20,000 - 2/10,n/30

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Question

Aging of Accounts Receivable
Presented below is the Accounts Receivable Subsidiary Ledger of Martian Corporation, a customer of Planetarium
Company, from January 1to June 5, 2021:
Martian Corporation
P 20,000
Customer
Credit Limit
Terms
2/10, n/30
-
Reference
Date
Particulars
Doc.
No.
Debit
Credit
Balance
2021
01 Balance forwarded
07 Sales
12 Cash
Jan.
9,200
INV
767
5,000
14,200
OR
1307
5,000
9,200
20 Sales
INV
800
1,200
10,400
28 Sales
- Cash
INV
965
1,060
11,460
OR
1518
9,200
2,260
-
Feb.
15 Sales
INV
970
1,220
3,480
18 Sales
INV
1001
1,400
4,880
22 DM for INV No. 800
05 Cash
DM
217
72
4,952
OR
1689
2,332
2,620
27 Sales
INV
1113
836
3,456
Freight
DM
223
120
3,576
28 Cash
OR
1718
1,400
2,176
3,736
2,516
Mar.
02 Sales
INV
1206
1,560
15 Cash
OR
1790
1,220
28 Sales
INV
1491
2,594
5,110
29 Cash
OR
1868
956
4,154

Accounts Receivable
Debit
Credit
Beginning
Credit Sale
XXX
XXX
Collections
XXX
XXX
Sales Discounts
XXX
Returns and Allowances
XXX
Write-offs
Total balan
XXX
Total balances
XXX
Account bal
XXX
Sales
Debit
Credit
XXX
Cash Sales
XXX
Credit Sales
XXX
Account balance

Apr.
03 Sales
INV
1627
1,636
5,790
14 Cash
OR
1880
1,470
4,320
19 Sales
INV
1798
1,422
5,742
23 CM for INV No. 1206
26 Cash
CM
121
90
5,652
OR
1905
1,422
4,230
30 Sales
INV
2001
420
4,650
May
15 Sales
INV
2010
642
5,292
17 Sales
INV
2177
992
6,284
20 Cash
OR
2096
1,062
5,222
Jun.
05 Cash
OR
2107
1,636
3,586
Required:
Determine the age of accounts receivable of Customer Martian Corporation as of May 31, 2021using the following basis:
A. First-in, first-out basis
B. Specifio invoice basis

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Step 1: Aging method:

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Step 2: (A) Determine the age of accounts receivable - FIFO Basis:

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Step 3: (B) Determine the age of accounts receivable - Specific Invoice Basis:

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