Problem 5-20 (AICPA Adapted)-06) From inception of operations, Comprehensive Company provided for uncollectible accounts expense under the allowance method using the percentage of sales method. No year-end adjustments to the allowance account were made. The balance in the allowance for doubtful accounts was P1,000,000 at the beginning of current year. During the current year, credit sales totaled P20,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, bad debts of P200,000 were written off, and recoveries of accounts previously written off amounted to P50,000. An aging of accounts receivable was made for the first time on December 31. POR Aging Balance Uncollectible 0 60 6,000,000 10% 61 - 180 2,000,000 20% 181 - 360 1,500,000 30% 30 Over 360 500,000 50% 280 130 Based on the review of collectibility of the account balances in the "over 360 days" aging category, additional accounts totaling P100,000 are to be written off on December 31. Effective with the current year, the entity adopted a new accounting method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging of accounts receivable. PAT Im. 1.

Problem 5-20 (AICPA Adapted)-06) From inception of operations, Comprehensive Company provided for uncollectible accounts expense under the allowance method using the percentage of sales method. No year-end adjustments to the allowance account were made. The balance in the allowance for doubtful accounts was P1,000,000 at the beginning of current year. During the current year, credit sales totaled P20,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, bad debts of P200,000 were written off, and recoveries of accounts previously written off amounted to P50,000. An aging of accounts receivable was made for the first time on December 31. POR Aging Balance Uncollectible 0 60 6,000,000 10% 61 - 180 2,000,000 20% 181 - 360 1,500,000 30% 30 Over 360 500,000 50% 280 130 Based on the review of collectibility of the account balances in the "over 360 days" aging category, additional accounts totaling P100,000 are to be written off on December 31. Effective with the current year, the entity adopted a new accounting method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging of accounts receivable. PAT Im. 1.

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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