In connection with your examination of the financial statements of Bukel Inc. for the year ended December 31, 2021, you were able to obtain certain information during your audit of the accounts receivable and related accounts The December 31, 2021 balance of Accounts Receivable control accounts is P 788,000 The only entries in the Doubtful Accounts Expense were : A credit for P1,296 on December 2, 2021 because Company A remitted in full for the accounts charged off on October 31, 2021; and A debit on December 31 for the amount of the credit to Allowance for Doubtful Accounts The Allowance for Doubtful Accounts schedule is presented below: DEBIT CREDIT BALANCE January 1, 2021 P 14,632 October 31, 2021 Uncollectible Accounts Company A – P 1,296 Company B – P 3,280 Company C – P 2,256 P 6,032 8,600 December 31, 2021 P 39,400 P 48,000 An aging schedule of the accounts receivable as of December 31, 2021 is presented below AGE Net Debit Balance Amount to which the Allowance is to be Adjusted after Adjustments and Corrections have been made 0 to 1 month P 372,960 1 percent 1 to 3 months 307,280 2 percent 3 to 6 months 88,720 3 percent Over 6 months 24,000 Definitely uncollectible, P 4,000 ; P8,000 is considered 50% uncollectible ; the remainder is estimated to be 80% collectible There is a credit balance in one account receivable (0 to 1 month) of P8,000; ti represents an advance on a sales contract. Also, there is a credit balance in one of the 1 to 3 months account receivable of P2,000 for which merchandise will be accepted by the customer The ledger accounts have not been closed as at December 31, 2021. The Accounts Receivable control account is not in agreement with the subsidiary ledger. The difference cannot be located and you decided to adjust the control account to the sum of the subsidiaries after corrections are made. Based on the above information : REQUIRED : How much is the adjusted balance of Accounts Receivable as at December 31, 2021? How much is the adjusted balance of Allowance for Doubtful Accounts as at December 31, 2021? How much is the net adjustment to Allowance for Doubtful Accounts?
In connection with your examination of the financial statements of Bukel Inc. for the year ended December 31, 2021, you were able to obtain certain information during your audit of the
The December 31, 2021 balance of Accounts Receivable control accounts is P 788,000
The only entries in the Doubtful Accounts Expense were :
- A credit for P1,296 on December 2, 2021 because Company A remitted in full for the accounts charged off on October 31, 2021; and
- A debit on December 31 for the amount of the credit to Allowance for Doubtful Accounts
The Allowance for Doubtful Accounts schedule is presented below:
|
|
DEBIT |
CREDIT |
BALANCE |
|
January 1, 2021 |
|
|
P 14,632 |
|
October 31, 2021 |
|
|
|
|
Uncollectible Accounts |
|
|
|
|
Company A – P 1,296 |
|
|
|
|
Company B – P 3,280 |
|
|
|
|
Company C – P 2,256 |
P 6,032 |
|
8,600 |
|
December 31, 2021 |
|
P 39,400 |
P 48,000 |
An aging schedule of the accounts receivable as of December 31, 2021 is presented below
|
AGE |
Net Debit Balance |
Amount to which the Allowance is to be Adjusted after Adjustments and Corrections have been made |
|
0 to 1 month |
P 372,960 |
1 percent |
|
1 to 3 months |
307,280 |
2 percent |
|
3 to 6 months |
88,720 |
3 percent |
|
Over 6 months |
24,000 |
Definitely uncollectible, P 4,000 ; P8,000 is considered 50% uncollectible ; the remainder is estimated to be 80% collectible |
There is a credit balance in one account receivable (0 to 1 month) of P8,000; ti represents an advance on a sales contract. Also, there is a credit balance in one of the 1 to 3 months account receivable of P2,000 for which merchandise will be accepted by the customer
The ledger accounts have not been closed as at December 31, 2021. The Accounts Receivable control account is not in agreement with the subsidiary ledger. The difference cannot be located and you decided to adjust the control account to the sum of the subsidiaries after corrections are made.
Based on the above information :
REQUIRED :
- How much is the adjusted balance of Accounts Receivable as at December 31, 2021?
- How much is the adjusted balance of Allowance for Doubtful Accounts as at December 31, 2021?
- How much is the net adjustment to Allowance for Doubtful Accounts?
- How much is Doubtful Account Expense?
- How much is the net adjustment to Doubtful Account Expense?
Step by step
Solved in 3 steps
