Un the following for items 46 – 48 Clover Corporation provided for uncollectible accounts receivable under the allowance method since the start of its operations to December 31, 2017. Provisions were made monthly at 2% of credit sales; bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account; and no year-end adjustments to the allowance account were made. Clover Company's usual credit terms are net 30 days. The credit balance in the allowance for doubtful accounts was P260,000 at January 1, 2017. During 2017, credit sales totaled P18,000,000 interim provisions for doubtful accounts were made at 2% of credit sales, P180,000 of bad debts were written off, and recoveries of accounts previously written off amounted to P30,000. Clover Company installed a computer system in November 2017 and an aging of accounts receivable was prepared for the first time as of December 31, 2017. A summary of the aging is as follows: Balance in Each Each Category P 2,280,000 1,200,000 800,000 260,000 Estimated % Classifications by Month of Sale November-December 2017 July -October 2017 January-June 2017 Prior to January 1, 2017 Based on the review of collectability of the account balances in the "prior to January. 1, 2017" aging category, additional receivables totaling P120,000 were written off as of December 31, 2017. 46. The adjusted balance of the allowance for doubtful accounts as of December 31, 2017 a. P537,600 Uncollectible 2% 15% 25% 80% b. P 633,600 c. P 350,000 •d. P 753,600 47. How much is the doubtful accounts for the year 20172
Un the following for items 46 – 48 Clover Corporation provided for uncollectible accounts receivable under the allowance method since the start of its operations to December 31, 2017. Provisions were made monthly at 2% of credit sales; bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account; and no year-end adjustments to the allowance account were made. Clover Company's usual credit terms are net 30 days. The credit balance in the allowance for doubtful accounts was P260,000 at January 1, 2017. During 2017, credit sales totaled P18,000,000 interim provisions for doubtful accounts were made at 2% of credit sales, P180,000 of bad debts were written off, and recoveries of accounts previously written off amounted to P30,000. Clover Company installed a computer system in November 2017 and an aging of accounts receivable was prepared for the first time as of December 31, 2017. A summary of the aging is as follows: Balance in Each Each Category P 2,280,000 1,200,000 800,000 260,000 Estimated % Classifications by Month of Sale November-December 2017 July -October 2017 January-June 2017 Prior to January 1, 2017 Based on the review of collectability of the account balances in the "prior to January. 1, 2017" aging category, additional receivables totaling P120,000 were written off as of December 31, 2017. 46. The adjusted balance of the allowance for doubtful accounts as of December 31, 2017 a. P537,600 Uncollectible 2% 15% 25% 80% b. P 633,600 c. P 350,000 •d. P 753,600 47. How much is the doubtful accounts for the year 20172
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Usa the following for items 46 – 48
Clover Corporation provided for uncollectible accounts receivable under the allowance method since the start of
its operations to December 31, 2017. Provisions were made monthly at 2% of credit sales; bad debts written off
were charged to the allowance account; recoveries of bad debts previously written off were credited to the
allowance account; and no year-end adjustments to the allowance account were made. Clover Company's usual
credit terms are net 30 days.
The credit balance in the allowance for doubtful accounts was P260,000 at January 1, 2017. During 2017, credit
sales totaled P18,000,000 interim provisions for doubtful accounts were made at 2% of credit sales, P180,000 of
bad debts were written off, and recoveries of accounts previously written off amounted to P30,000.
Clover Company installed a computer system in November 2017 and an aging of accounts receivable was
prepared for the first time as of December 31, 2017. A summary of the aging is as follows:
Balance in Each
Estimated %
Uncollectible
2%
15%
Classifications by Month of Sale
November-December 2017
July -October 2017
January-June 2017
Prior to January 1, 2017
Based on the review of collectability of the account balances in the "prior to January. 1, 2017" aging category,
additional receivables totaling P120,000 were written off as of December 31, 2017.
46. The adjusted balance of the allowance for doubtful accounts as of December 31, 2017
a. P537,600
47. How much iş the doubtful accounts for the year 2017?
Each Category
P 2,280,000
1,200,000
800,000
260,000
25%
80%
ь. Р633,600
c. P 350,000
• d. ' P 753,600
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