Bayabas Company started operations on January 1, 2021. Following data are available as of June 30, 2021: Purchase of merchandise - P9,000,000; Inventory, June 30, 2021 – P1,500,000; Goods were sold at 50% above cost; 75% of sales were on credit; Estimated bad debts – 1% of credit sales; Collections from charge customers – P6,300,000; Allowance for doubtful accounts, June 30, 2021, after write-off of uncollectible accounts – P78,075. What is the outstanding accounts receivable on June 30, 2021? A.P2,200,000 B.P2,137,500
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.
1. Bayabas Company started operations on January 1, 2021. Following data are available as of June 30, 2021: Purchase of merchandise - P9,000,000; Inventory, June 30, 2021 – P1,500,000; Goods were sold at 50% above cost; 75% of sales were on credit; Estimated
A.P2,200,000
B.P2,137,500
C.P2,131,200
D.Answer not given
2.Mr. Wonder purchased a machine amounting to P7,000,000 on January 1, 2013 providing the newest kind of technology to improve their operations.It has a useful life of 20 years and a salvage value of P500,000. However, on June 30, 2018, they decided to dispose it to liquidate some of its debts. Therefore, they classified it as held for sale. The fair value of the machine on that date P5,100,000 and the cost of disposal is P100,000. On November 30, 2019, the company decided again to continue to use it since they were able to obtain funding from their investors through follow-on offering of additional shares to pay their currently maturing obligations. On this date, the fair value of the machine is P4,900,000 and the cost of disposal is P50,000. How much is the gain or loss in the reclassification in 2019?
A. P150,000
B. P362,500
C. P247,916.67
D. P460,416.67
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