When examining the accounts of Palma Company, you ascertain that balance relating to bothreceivables and payables are included in a single controlling account (called receivables),which has a P23,050 debit balance. An analysis of the details of this account revealed thefollowing:ItemsDebitCreditAccounts Receivable - customersP 40,000 Accounts receivable - officers (Current collection expected)2,500 Debit balances - creditors450 Expense advances to salespersons1,000 Share capital subscriptions receivable4,600 Accounts payable for merchandise P 19,250Unpaid salaries 3,300Credit balance in customer accounts 2,000Cash received in advance from customers for goods not yet shipped 450Expected bad debts, cumulative 500Required:1. How should each item be reported on Palma Company’s statement of financial position?

1. Accounts Receivable = Debit balance 39,550 Accounts Receivable - customers…

Answered: When examining the accounts of Palma…

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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When examining the accounts of Palma Company, you ascertain that balance relating to both
receivables and payables are included in a single controlling account (called receivables),
which has a P23,050 debit balance. An analysis of the details of this account revealed the
following:

Items	Debit	Credit
Accounts Receivable - customers	P 40,000
Accounts receivable - officers (Current collection expected)	2,500
Debit balances - creditors	450
Expense advances to salespersons	1,000
Share capital subscriptions receivable	4,600
Accounts payable for merchandise		P 19,250
Unpaid salaries		3,300
Credit balance in customer accounts		2,000
Cash received in advance from customers for goods not yet shipped		450
Expected bad debts, cumulative		500

Required:
1. How should each item be reported on Palma Company’s statement of financial position?

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