owed Problem 5-3 (IAA) At the beginning of current year, Jocose Company reported the following: D00 2,00,000 100,000 000 Accounts receivable Allowance for doubtful accounts the Additional information for the current year: 1. Cash sales of the entity amount to P800,000 and represent 10% of gross sales. 2. Ninety percent of the credit sales customers do not take advantage of the 5/10, n /30 terms. 3. Customers who did not take advantage of the discount paid P5,940,000. 4. It is expected that cash discounts of Pl10,000 will be taken on accounts receivable outstanding at December 31, 2019. 5. Sales returns amounted to P80,000. All returns were from charge sales. 6. During the year accounts totaling P60,000 were written off as uncollectible. Recoveries during the year amounted to P10,000. This amount is not included in the collections. 7. The allowance for doubtful accounts is adjusted so that it represents a certain percentage of the outstanding accounts receivable at year-end. Required: a. Prepare journal entries to record the transactions. b. What is the net realizable value of accounts receivable at year-end?
owed Problem 5-3 (IAA) At the beginning of current year, Jocose Company reported the following: D00 2,00,000 100,000 000 Accounts receivable Allowance for doubtful accounts the Additional information for the current year: 1. Cash sales of the entity amount to P800,000 and represent 10% of gross sales. 2. Ninety percent of the credit sales customers do not take advantage of the 5/10, n /30 terms. 3. Customers who did not take advantage of the discount paid P5,940,000. 4. It is expected that cash discounts of Pl10,000 will be taken on accounts receivable outstanding at December 31, 2019. 5. Sales returns amounted to P80,000. All returns were from charge sales. 6. During the year accounts totaling P60,000 were written off as uncollectible. Recoveries during the year amounted to P10,000. This amount is not included in the collections. 7. The allowance for doubtful accounts is adjusted so that it represents a certain percentage of the outstanding accounts receivable at year-end. Required: a. Prepare journal entries to record the transactions. b. What is the net realizable value of accounts receivable at year-end?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Problem 5-3 (IAA)
At the beginning of current year, Jocose Company reported
the following:
,000,000
2,00,000
100,000
40,000
Accounts receivable
Allowance for doubtful accounts
cing the
Additional information for the current year:
1. Cash sales of the entity amount to P800,000 and represent
10% of gross sales.
000,000
2. Ninety percent of the credit sales customers do not take
advantage of the 5/10, n/30 terms.
50,000
3. Customers who did not take advantage of the discount paid
P5,940,000.
00,000
30,000
4. It is expected that cash discounts of P10,000 will be taken
on accounts receivable outstanding at December 31, 2019.
0,000
0,000
5. Sales returns amounted to P80,000. All returns were from
charge sales.
6. During the year accounts totaling P60,000 were written
off as uncollectible.
vable.
Recoveries during the year amounted to P10,000. This
amount is not included in the collections.
ts at
unts
7. The allowance for doubtful accounts is adjusted so that it
represents a certain percentage of the outstanding accounts
receivable at year-end.
able
Required:
a. Prepare journal entries to record the transactions.
b. What is the net realizable value of accounts receivable at
year-end?
TION
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