In connection with your audit of the Cebu Co. for the year 20x1, you were able to gather the following accounts from the unadjusted trial balance of the company on December 31, 20x1: Cash P340,000 Trading securities 1,050,000 Accounts Receivable 8,000 Allowance for doubtful accounts 360,000 Notes receivable 20,000 Prepaid rent 300,000 Merchandise inventory 900,000 Accounts payable 485,000 Notes payable 200,000 Accrued expenses 44,000 Bonds payable (due semiannually in June and December at P60,000) 600,000 Income tax payable 60,000 SSS and HDMF premiums payable 24,000 Withholding tax payable 18,000 Mortgage payable, due July 31, 20x3 400,000 Contingent liability 160,000 Additional information: Cash consists of: Cash in bank per bank statement (outstanding checks P24,000) P334,000 Petty cash, including unreplenished petty cash expense vouchers of P300) 1,000 Customer's advance deposit in check dated January 15, 20x2 5,000 P340,000 Accounts receivable include P250,000 selling price of goods sent on consignment at 125% of the cost and not included in the ending Notes receivable include notes discounted by P160,000. Accounts payable includes P80,000 cost of purchases in transit FOB destination but not included in the It also includes the customer’s advance deposit in a check dated January 15, 20x2 of P5,000. The note payable is a promissory note dated October 1, 20x1, due March 31, 20x2, with 18% interest per annum. This is in connection with a loan from Chibi bank. Accrued expenses exclude the interest payable on the Based on the above and the result of your audit, determine the amounts to be presented in Cebu Co.’s statement of financial position as of December 31, 20x1 for the following: I NEED 1-3 Cash balance Trade and other receivables Total current assets Trade and other payables Total current liabilities
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.
In connection with your audit of the Cebu Co. for the year 20x1, you were able to gather the following accounts from the unadjusted
|
Cash |
P340,000 |
|
Trading securities |
1,050,000 |
|
|
8,000 |
|
Allowance for doubtful accounts |
360,000 |
|
Notes receivable |
20,000 |
|
Prepaid rent |
300,000 |
|
Merchandise inventory |
900,000 |
|
Accounts payable |
485,000 |
|
Notes payable |
200,000 |
|
Accrued expenses |
44,000 |
|
Bonds payable (due semiannually in June and December at P60,000) |
600,000 |
|
Income tax payable |
60,000 |
|
SSS and HDMF premiums payable |
24,000 |
|
Withholding tax payable |
18,000 |
|
Mortgage payable, due July 31, 20x3 |
400,000 |
|
|
160,000 |
Additional information:
- Cash consists of:
|
Cash in bank per bank statement (outstanding checks P24,000) |
P334,000 |
|
Petty cash, including unreplenished petty cash expense vouchers of P300) |
1,000 |
|
Customer's advance deposit in check dated January 15, 20x2 |
5,000 |
|
|
P340,000 |
- Accounts receivable include P250,000 selling price of goods sent on consignment at 125% of the cost and not included in the ending
- Notes receivable include notes discounted by P160,000.
- Accounts payable includes P80,000 cost of purchases in transit FOB destination but not included in the It also includes the customer’s advance deposit in a check dated January 15, 20x2 of P5,000.
- The note payable is a promissory note dated October 1, 20x1, due March 31, 20x2, with 18% interest per annum. This is in connection with a loan from Chibi bank. Accrued expenses exclude the interest payable on the
Based on the above and the result of your audit, determine the amounts to be presented in Cebu Co.’s statement of financial position as of December 31, 20x1 for the following:
I NEED 1-3
- Cash balance
- Trade and other receivables
- Total current assets
- Trade and other payables
- Total current liabilities
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