An examination of the accounting records of LAN Co. indicates that all receivables are being recorded in a single account entitled Receivables. An analysis of the account discloses the following: Accounts receivable (trade) P 77,500 Accounts receivable (officers) 18,000 Ordinary shares subscription receivable (current) 60,000 Advances to employees 9,000 Notes receivable (trade), due in 3 years 30,000 Deposit to guarantee contract performance 25,000 Utility deposit 2,500 Total P222,000 Required: a. Prepare a journal entry to separate the preceding items into their proper accounts.
An examination of the accounting records of LAN Co. indicates that all receivables are being recorded in a single account entitled Receivables. An analysis of the account discloses the following: Accounts receivable (trade) P 77,500 Accounts receivable (officers) 18,000 Ordinary shares subscription receivable (current) 60,000 Advances to employees 9,000 Notes receivable (trade), due in 3 years 30,000 Deposit to guarantee contract performance 25,000 Utility deposit 2,500 Total P222,000 Required: a. Prepare a journal entry to separate the preceding items into their proper accounts.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:An examination of the accounting records of LAN Co. indicates that all receivables are being
recorded in a single account entitled Receivables. An analysis of the account discloses the
following:
Accounts receivable (trade)
P 77,500
Accounts receivable (officers)
18,000
Ordinary shares subscription receivable (current)
60,000
Advances to employees
9,000
Notes receivable (trade), due in 3 years
30,000
Deposit to guarantee contract performance
25,000
Utility deposit
2,500
Total
P222,000
Required:
a. Prepare a journal entry to separate the preceding items into their proper accounts.
b. How would each of the foregoing items normally be reflected on the statement of
financial position?
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