The December 31, 2019 statement of financial position of Help Company included the following information: Notes receivable P 598,000 Less: NR discounted (380,000) P 218,000 Accounts receivable P2,240,000 Less: Allow. for D.A.( 141,000) 2,099,000 Total receivables P2,317,000 The following transactions occurred during 2020: 1. Sales on account P8,812,000 2. Collections on accounts 8,410,000 3. Accounts receivable written off as uncollectible 138,000 4. Notes receivable collected 290,000 5. Customer notes received in payment of accounts receivable 740,000 6. Notes receivable discounted paid at maturity 360,000 7. Notes receivable discounted defaulted, including interest of P200 and a P100 fee. This amount is expected to be collected in 2021 20,300 8. Proceeds from customer notes discounted (face value P450,000, accrued interest income, P2,000) 448,500 9. Collections on accounts previously written off 5,000 10. Sales returns and allowances 20,000 11. Required allowance for doubtful accounts based on impairment assessment at year end 12,000 The amount to be reported as trade and other receivables in the entity’s statement of financial position as of December 31, 2020 is 1,970,300
The December 31, 2019 statement of financial position of Help Company included the following information: Notes receivable P 598,000 Less: NR discounted (380,000) P 218,000 Accounts receivable P2,240,000 Less: Allow. for D.A.( 141,000) 2,099,000 Total receivables P2,317,000 The following transactions occurred during 2020: 1. Sales on account P8,812,000 2. Collections on accounts 8,410,000 3. Accounts receivable written off as uncollectible 138,000 4. Notes receivable collected 290,000 5. Customer notes received in payment of accounts receivable 740,000 6. Notes receivable discounted paid at maturity 360,000 7. Notes receivable discounted defaulted, including interest of P200 and a P100 fee. This amount is expected to be collected in 2021 20,300 8. Proceeds from customer notes discounted (face value P450,000, accrued interest income, P2,000) 448,500 9. Collections on accounts previously written off 5,000 10. Sales returns and allowances 20,000 11. Required allowance for doubtful accounts based on impairment assessment at year end 12,000 The amount to be reported as trade and other receivables in the entity’s statement of financial position as of December 31, 2020 is 1,970,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
The December 31, 2019 statement of financial position of
Help Company included the following information:
Notes receivable P 598,000
Less: NR discounted (380,000) P 218,000
Less: Allow. for D.A.( 141,000) 2,099,000
Total receivables P2,317,000
The following transactions occurred during 2020:
1. Sales on account P8,812,000
2. Collections on accounts 8,410,000
3. Accounts receivable written off as
uncollectible 138,000
4. Notes receivable collected 290,000
5. Customer notes received in payment
of accounts receivable 740,000
6. Notes receivable discounted paid at
maturity 360,000
7. Notes receivable discounted
defaulted, including interest of
P200 and a P100 fee. This
amount is expected to be collected
in 2021 20,300
8. Proceeds from customer notes
discounted (face value P450,000,
accrued interest income, P2,000) 448,500
9. Collections on accounts previously
written off 5,000
10. Sales returns and allowances 20,000
11. Required allowance for doubtful
accounts based on impairment
assessment at year end 12,000
The amount to be reported as trade and other receivables in the entity’s statement of financial position as of December 31, 2020 is 1,970,300
Please explain why
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