Problem 5-6 (PHILCPA Adapted) At the beginning of current year, Rampant Company reported that the allowance for doubtful accounts has a credit balance of P170,000. Bad debt recoveries and bad debts written off in the current vear were P30,000 and P235,000, respectively. The allowance account had been previously calculated as a percentage of net sales. It was decided however to provide for doubtful accounts commencing with the year-end adjusting entry on the basis of an analysis of the age of the receivables. The following schedule was prepared. Percent uncollectible Not yet due 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Additional accounts to be written off 1,700,000 1,200,000 100,000 150,000 120,000 30,000 NIL 5 · 25 50 100 Required: 1. What is the required allowance for doubtful accounts at year-end? 2. How much would be the doubtful accounts expense for the current year? 3. What is the adjusting entry for the doubtful accounts expense for the current year? 4. What is the net realizable value of accounts receivable at year-end?
Problem 5-6 (PHILCPA Adapted) At the beginning of current year, Rampant Company reported that the allowance for doubtful accounts has a credit balance of P170,000. Bad debt recoveries and bad debts written off in the current vear were P30,000 and P235,000, respectively. The allowance account had been previously calculated as a percentage of net sales. It was decided however to provide for doubtful accounts commencing with the year-end adjusting entry on the basis of an analysis of the age of the receivables. The following schedule was prepared. Percent uncollectible Not yet due 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Additional accounts to be written off 1,700,000 1,200,000 100,000 150,000 120,000 30,000 NIL 5 · 25 50 100 Required: 1. What is the required allowance for doubtful accounts at year-end? 2. How much would be the doubtful accounts expense for the current year? 3. What is the adjusting entry for the doubtful accounts expense for the current year? 4. What is the net realizable value of accounts receivable at year-end?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Problem 5-6 (PHILCPA Adapted)
At the beginning of current year, Rampant Company
reported that the allowance for doubtful accounts has a credit
balance of P170,000.
Bad debt recoveries and bad debts written off in the current
year were P30,000 and P235,000, respectively.
The allowance account had been previously calculated as a
percentage of net sales.
It was decided however to provide for doubtful accounts
commencing with the year-end adjusting entry on the basis of
an analysis of the age of the receivables.
The following schedule was prepared.
Percent
uncollectible
Not yet due
1-30 days past due
31-60 days past due
61-90 days past due
Over 90 days past due
Additional accounts to be written off
1,700,000
1,200,000
100,000
150,000
120,000
30,000
NIL
5
· 25
50
100
Required:
1. What is the required allowance for doubtful accounts at
year-end?
2. How much would be the doubtful accounts expense for
the current year?
3. What is the adjusting entry for the doubtful accounts
expense for the current year?
4. What is the net realizable value of accounts receivable
at year-end?
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