On Feb 28, a company had a balance in its accounts receivable of Php 3,019,019. Mar 2. Sold merchandise on account, Php 576,000. The cost of the merchandise was Php 420,000. Mar 8. Sold Php 150,000 worth of accounts receivable which had been overdue for 70 days to Metrobank. Metrobank charged a 5% factoring fee. Mar 20. Borrowed Php 500,000 cash from UCPB, pledging Php 650,000 worth of accounts receivable as collateral for the loan. Prepare journal entries to record the above transactions from March. Assume the company uses a perpetual inventory system. Assume also that the company uses Aging of Accounts receivable to estimate its bad debts. The credit balance of Allowance for Bad Debts as of February is 285,000. The company estimates the following uncollectible rates per age: Balance Est. Uncollectible % Account Age Current (not yet due) 1-30 days past due 30-60 days past due 61-90 days past due Over 90 days past due 1,207,607.60 754,754.75 2.00% 3.00% 452,852.85 543,423.42 8.00% 40.00% 60,380.38 80.00% Prepare the Schedule of Aging of Accounts Receivable. What will be the journal entry in Bad Debts expense and Allowance for Bad Debts as of end of March.

On Feb 28, a company had a balance in its accounts receivable of Php 3,019,019. Mar 2. Sold merchandise on account, Php 576,000. The cost of the merchandise was Php 420,000. Mar 8. Sold Php 150,000 worth of accounts receivable which had been overdue for 70 days to Metrobank. Metrobank charged a 5% factoring fee. Mar 20. Borrowed Php 500,000 cash from UCPB, pledging Php 650,000 worth of accounts receivable as collateral for the loan. Prepare journal entries to record the above transactions from March. Assume the company uses a perpetual inventory system. Assume also that the company uses Aging of Accounts receivable to estimate its bad debts. The credit balance of Allowance for Bad Debts as of February is 285,000. The company estimates the following uncollectible rates per age: Balance Est. Uncollectible % Account Age Current (not yet due) 1-30 days past due 30-60 days past due 61-90 days past due Over 90 days past due 1,207,607.60 754,754.75 2.00% 3.00% 452,852.85 543,423.42 8.00% 40.00% 60,380.38 80.00% Prepare the Schedule of Aging of Accounts Receivable. What will be the journal entry in Bad Debts expense and Allowance for Bad Debts as of end of March.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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