The statement of financial position of Spongebob Company shows accounts receivable at January 1, 2019 as follows: Accounts Receivable P450,000 Allowance for doubtful accounts 9,000 During 2019, transactions relating to the accounts receivable were as follows: • Sales on account, P4,800,000 • Cash collections of accounts receivable totaled P3,920,000, after discounts of P80,000 were allowed for prompt раyment • Bad accounts previously written off in prior year amounting to P5,000 were recovered. • The company decided to provide P26,000 for doubtful accounts by a journal entry at the end of the year. • Accounts receivable of P700,000 have been pledged to a local bank on a loan of P400,000. Collections of P150,000 were made on those receivables (not included in the collection previously given) and applied as partial payment for the loan. The net realizable value of accounts receivable at December 31, 2o19 was?
The statement of financial position of Spongebob Company shows accounts receivable at January 1, 2019 as follows: Accounts Receivable P450,000 Allowance for doubtful accounts 9,000 During 2019, transactions relating to the accounts receivable were as follows: • Sales on account, P4,800,000 • Cash collections of accounts receivable totaled P3,920,000, after discounts of P80,000 were allowed for prompt раyment • Bad accounts previously written off in prior year amounting to P5,000 were recovered. • The company decided to provide P26,000 for doubtful accounts by a journal entry at the end of the year. • Accounts receivable of P700,000 have been pledged to a local bank on a loan of P400,000. Collections of P150,000 were made on those receivables (not included in the collection previously given) and applied as partial payment for the loan. The net realizable value of accounts receivable at December 31, 2o19 was?
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
Transcribed Image Text:The statement of financial position of Spongebob Company
shows accounts receivable at January 1, 2019 as follows:
Accounts Receivable P450,000
Allowance for doubtful accounts 9,000
During 2019, transactions relating to the accounts
receivable were as follows:
• Sales on account, P4,800,000
• Cash collections of accounts receivable totaled P3,920,000,
after discounts of P80,000 were allowed for prompt
payment
• Bad accounts previously written off in prior year
amounting to P5,000 were recovered.
• The company decided to provide P26,000 for doubtful
accounts by a journal entry at the end of the year.
• Accounts receivable of P700,000 have been pledged to a
local bank on a loan of P400,000. Collections of P150,000
were made on those receivables (not included in the
collection previously given) and applied as partial payment
for the loan.
The net realizable value of accounts receivable at
December 31, 2019 was?
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