Problem 9 The accounts receivable subsidiary ledger of Olarita Corporation shows the following information: Customer 12/31 Account balance Invoice Date Amount One, Inc. P140,720 12/06 11/29 09/02 08/20 12/08 10/25 P56,000 84,720 48,000 35,680 80,000 42,400 92,560 88,000 76,800 49,600 69,600 P723,360 Two Co. 83,680 Three Corp. 122,400 Four Co. 180,560 11/17 10/09 12/12 Five Co. 126,400 12/02 Six, Inc. 69,600 P723,360 09/12 Total The estimated bad debt rates below are based on the Corporation's receivable collection experience. Age of accounts 0 - 30 days 31 – 60 days 61 – 90 days 91 – 120 days Over 120 days Rate 1% 1.5% 3% 10% 50% The Allowance for Doubtful Accounts had a credit balance of P14,000 on December 31, 2020, before adjustment. 9. The adjusting journal entry to adjust the allowance for doubtful accounts as of December 31, 2020 will include a debit to doubtful accounts expense of 4.
Problem 9 The accounts receivable subsidiary ledger of Olarita Corporation shows the following information: Customer 12/31 Account balance Invoice Date Amount One, Inc. P140,720 12/06 11/29 09/02 08/20 12/08 10/25 P56,000 84,720 48,000 35,680 80,000 42,400 92,560 88,000 76,800 49,600 69,600 P723,360 Two Co. 83,680 Three Corp. 122,400 Four Co. 180,560 11/17 10/09 12/12 Five Co. 126,400 12/02 Six, Inc. 69,600 P723,360 09/12 Total The estimated bad debt rates below are based on the Corporation's receivable collection experience. Age of accounts 0 - 30 days 31 – 60 days 61 – 90 days 91 – 120 days Over 120 days Rate 1% 1.5% 3% 10% 50% The Allowance for Doubtful Accounts had a credit balance of P14,000 on December 31, 2020, before adjustment. 9. The adjusting journal entry to adjust the allowance for doubtful accounts as of December 31, 2020 will include a debit to doubtful accounts expense of 4.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Bad Debts
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.
Question
9. The adjusting journal entry to adjust the allowance for doubtful accounts as of December 31, 2020 will include a debit to doubtful accounts expense of:
Transcribed Image Text:Problem 9
The accounts receivable subsidiary ledger of Olarita Corporation shows the following
information:
Customer
12/31 Account balance
Invoice
Date
Amount
One, Inc.
P140,720
12/06
P56,000
84,720
48,000
35,680
80,000
42,400
92,560
88,000
11/29
09/02
08/20
12/08
Two Co.
83,680
Three Corp.
122,400
4
10/25
Four Co.
180,560
11/17
10/09
12/12
12/02
09/12
Five Co.
126,400
76,800
49,600
69,600
P723,360
Six, Inc.
69,600
P723,360
Total
The estimated bad debt rates below are based on the Corporation's receivable collection
experience.
Age of accounts
0 – 30 days
31 – 60 days
61 – 90 days
91 – 120 days
Rate
1%
1.5%
3%
10%
Over 120 days
50%
The Allowance for Doubtful Accounts had a credit balance of P14,000 on December 31, 2020,
before adjustment.
9. The adjusting journal entry to adjust the allowance for doubtful accounts as of
December 31, 2020 will include a debit to doubtful accounts expense of
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