Over 120 days 50% tequirements: 1. If there were no other entries to the allowance for doubtful accounts, what is the correct bad debt expense for the year? 2. What is the correct allowance for bad debt expense for the year ended December 31, 2018? 3. What is the net adjustment to the Accounts Receivable in the general ledger? 4. What is the carrying value of the company's accounts receivable as of December 31, 2018? 5. What is the necessary adjusting entry to adjust any unallocated difference between Subsidiary Ledger and General Ledger?
Over 120 days 50% tequirements: 1. If there were no other entries to the allowance for doubtful accounts, what is the correct bad debt expense for the year? 2. What is the correct allowance for bad debt expense for the year ended December 31, 2018? 3. What is the net adjustment to the Accounts Receivable in the general ledger? 4. What is the carrying value of the company's accounts receivable as of December 31, 2018? 5. What is the necessary adjusting entry to adjust any unallocated difference between Subsidiary Ledger and General Ledger?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please answer this problem and show the solution
Transcribed Image Text:RECEIVABLES
You are auditing the Accounts Receivable of LOPEZ Inc. as of December 31, 2018. You found the following
information in the general journal:
Accounts Receivable
P1,466,720
(46,720)
P1.420.000
Less: AFDA
Accounts Receivable, net
The accounts receivable subsidiary ledger had the following details:
Involce date
Customers
Amount
Balance
Escorido
09/12/18
139,200
153,600
99,200
139,200
Alamada
12/12/18
12/02/18
252,800
Dulay
11/17/18
185,120
176,000
160,000
10/08/18
361,120
Ello
12/08/18
10/25/18
44,800
40,000
96,000
08/20/18
Sampan
Sangid
Porcadilla
244,800
96,000
71,360
09/27/18
08/20/18
71,360
112,000
169,440
12/06/18
281,440
1.446.720
11/29/18
Total
Transcribed Image Text:Additional Info:
a. You discovered based on your review of subsequent events that Sangid recently went bankrupt, thus
you suggested that the amount receivable from the same shall be written off.
b. You also discovered that the invoice dated 12/02/18 has already been settled by Alamada per OR
number 34675. This amount however has been erroneously posted against Dulay's subsidiary ledger
as a settlement for an invoice dated 11/05/18 for the same amount.
c. The estimated bad debt rates below are based on the company's receivable collection experience:
Age of accounts % of collectability
0-30 days
31-60 days
61-90 days
91-120 days
Over 120 days
98%
95%
90%
80%
50%
Requirements:
1. If there were no other entries to the allowance for doubtful accounts, what is the correct bad debt expense
for the year?
2. What is the correct allowance for bad debt expense for the year ended December 31, 2018?
3. What is the net adjustment to the Accounts Receivable in the general ledger?
4. What is the carrying value of the company's accounts receivable as of December 31, 2018?
5. What is the necessary adjusting entry to adjust any unallocated difference between Subsidiary Ledger and
General Ledger?
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