orp.’s accounts receivable subsidiary ledger shows the following information: Customer Account Balance December 31, 2022 Sales Invoices Date Amount Pray Inc. P 35,180 12/6/2022 P 14,000 11/29/2022 21,180 Patience Co. 20,920 9/27/2022 12,000 8/20/2022 8,920 Love Corp. 30,600 12/8/2022 20,000 10/25/2022 10,600 Happy Co. 45,140 11/17/2022 23,140 10/9/2022 22,000 Kindness Corp. 31,600 12/12/2022 19,200 12/2/2022 12,400 Gentleness Inc. 17,400 9/12/2022 17,400 The estimated bad debts rates below are based on BB’s receivable collection experience. Age of Accounts Rate 0 -30 days 1.00% 31- 60 days 1.50% 61-90 days 3.00% 91 - 120 days 10.00% over 120 days 50.00% The allowance for bad debts had beginning balance of P6,500. Statement 1: The net realizable value of the accounts receivable at December 31, 2022 is P165,170. Statement 2: The adjustment for allowance for bad debts includes a credit of P56,340. Group of answer choices Both statements are false Only statement 1 is true Both statements are true Only statement 2 is true
4.
B Corp.’s
|
Customer |
Account Balance |
Sales Invoices |
|
|
Date |
Amount |
||
|
Pray Inc. |
P 35,180 |
12/6/2022 |
P 14,000 |
|
11/29/2022 |
21,180 |
||
|
Patience Co. |
20,920 |
9/27/2022 |
12,000 |
|
8/20/2022 |
8,920 |
||
|
Love Corp. |
30,600 |
12/8/2022 |
20,000 |
|
10/25/2022 |
10,600 |
||
|
Happy Co. |
45,140 |
11/17/2022 |
23,140 |
|
10/9/2022 |
22,000 |
||
|
Kindness Corp. |
31,600 |
12/12/2022 |
19,200 |
|
12/2/2022 |
12,400 |
||
|
Gentleness Inc. |
17,400 |
9/12/2022 |
17,400 |
The estimated
|
Age of Accounts |
Rate |
|
0 -30 days |
1.00% |
|
31- 60 days |
1.50% |
|
61-90 days |
3.00% |
|
91 - 120 days |
10.00% |
|
over 120 days |
50.00% |
The allowance for bad debts had beginning balance of P6,500.
Statement 1: The net realizable value of the accounts receivable at December 31, 2022 is P165,170.
Statement 2: The adjustment for allowance for bad debts includes a credit of P56,340.
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