Honduras Company revealed a balance of P8,200,000 in the accounts receivable control account at year-end. An analysis of the accounts receivable showed the following: Accounts known to be worthless 100,000 Advance payments to creditors on purchase orders 400,000 Advances to affiliated entities 1,000,000 Customers' accounts reporting credit balances arising from sales returns -600,000 Interest recivable on bonds 400,000 Trade accounts receivable-unassigned 2,000,000 Subscription receivable due in 30 days 2,200,000 Trade accounts receivable-assigned (Finance Company's equity asigned accounts is P500,000) 1,500,000 Trade installments receivable due in 1-18 months, including unearned finance charge of P50,000 850,000 Trade accounts receivable from officers, due currently 150,000 Trade accounts on which postdated checks are held and no entries were made on receipt of checks 200,000 Total 8,200,000 What amounted should be reported as trade accounts receivable at year end? a. 4,650,000 b. 4,700,000 c. 4,150,000 d. 4,050,000
Honduras Company revealed a balance of P8,200,000 in the accounts receivable control account at year-end. An analysis of the accounts receivable showed the following: Accounts known to be worthless 100,000 Advance payments to creditors on purchase orders 400,000 Advances to affiliated entities 1,000,000 Customers' accounts reporting credit balances arising from sales returns -600,000 Interest recivable on bonds 400,000 Trade accounts receivable-unassigned 2,000,000 Subscription receivable due in 30 days 2,200,000 Trade accounts receivable-assigned (Finance Company's equity asigned accounts is P500,000) 1,500,000 Trade installments receivable due in 1-18 months, including unearned finance charge of P50,000 850,000 Trade accounts receivable from officers, due currently 150,000 Trade accounts on which postdated checks are held and no entries were made on receipt of checks 200,000 Total 8,200,000 What amounted should be reported as trade accounts receivable at year end? a. 4,650,000 b. 4,700,000 c. 4,150,000 d. 4,050,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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Honduras Company revealed a balance of P8,200,000 in the
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||||
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An analysis of the accounts receivable showed the following:
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||||
|
Accounts known to be worthless
|
100,000 | |||
|
Advance payments to creditors on purchase orders
|
400,000 | |||
|
Advances to affiliated entities
|
1,000,000 | |||
|
Customers' accounts reporting credit balances arising
|
||||
| from sales returns | -600,000 | |||
|
Interest recivable on bonds
|
400,000 | |||
|
Trade accounts receivable-unassigned
|
2,000,000 | |||
|
Subscription receivable due in 30 days
|
2,200,000 | |||
|
Trade accounts receivable-assigned (Finance
|
||||
| Company's equity asigned accounts is P500,000) | 1,500,000 | |||
|
Trade installments receivable due in 1-18 months,
|
||||
| including unearned finance charge of P50,000 | 850,000 | |||
|
Trade accounts receivable from officers, due currently
|
150,000 | |||
|
Trade accounts on which postdated checks are held
|
||||
| and no entries were made on receipt of checks | 200,000 | |||
| Total | 8,200,000 | |||
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What amounted should be reported as trade accounts receivable at year end?
|
||||
| a. 4,650,000 | ||||
| b. 4,700,000 | ||||
| c. 4,150,000 | ||||
| d. 4,050,000 |
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