Problem 5: Yasuo Company provided the following information for the current year. Cash Sales Gross 2,000,000 Returns and Allowances 100,000 Credit sales Gross 3,000,000 Discounts 150,000 Customers owed P1,00,000 on January 1 and P750,000 on December 31. The entity used direct write-off method for bad debts. No bad debts were recorded in the current year. Under the cash basis of accounting, what amount of sales revenue should be reported for the current year?

Problem 5: Yasuo Company provided the following information for the current year. Cash Sales Gross 2,000,000 Returns and Allowances 100,000 Credit sales Gross 3,000,000 Discounts 150,000 Customers owed P1,00,000 on January 1 and P750,000 on December 31. The entity used direct write-off method for bad debts. No bad debts were recorded in the current year. Under the cash basis of accounting, what amount of sales revenue should be reported for the current year?

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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Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. Year 1 Sold $1,346,100 of merchandise on credit (that had cost $983,000), terms n/30. Wrote off $21,100 of uncollectible accounts receivable. Received $673,300 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.80% of accounts receivable would be uncollectible. Year 2 Sold $1,577,400 of merchandise (that had cost $1,329,500) on credit, terms n/30. Wrote off $25,000 of uncollectible accounts receivable. Received $1,122,600 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.80% of accounts receivable would be uncollectible. Required: Prepare journal entries to record Liang's Year 1 and Year 2 summarized transactions and its year-end…