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

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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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?

 

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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
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
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