You were engaged to audit the financial statements of Healthy Teeth Company, a company selling different kinds of chocolates, as of and for the period ended December 31, 2016. The ending accounts reccivable balance of your client is P4,300,000. The following is a summary of the amounts based from the eustomers' replies to the confirmation requests, and the corresponding aging of their accounts (based from the subsidiary ledger): Agc Amount 3160 days Dver 180 days per Amount Customer 30 days Suhsidiary per Reply 180 days daes Ledaer Ashe 1,250,000 1,240,000 1,200,000 50,000 Brand 800,000 800,000 700,000 60,000 40,000 Corki 734,000 734,000 700,000 34,000 Darius 866,000 16,000 866,000 250,000 850,000 Ekko 300,000 300,000 Fizz 320,000 320,000 300,000 20,000 Graves 30.000 30.000 4,300,000 4,210,000 1,800,000 2,320,000 94,000 40,000 Totals 46,000 Percent uncollectible 1% 5% 15% 30% 70% Additional information related to the audit are as follows: Healthy Teeth sells good with terms 2/10, n/30. • Collections for 2016 total to P10,369,000. • The beginning balances of Accounts Receivable and Allowance for Bad Debts are P4,050,000 and P57,900, respectively. • The differences in the amount of Ashe Company's account and Ekko Corp.'s account in the subsidiary ledger and their reply are from recorded sales on December 30, 2016 with term FOB Destination. The goods were received by Ashe on January 5, 2017; while Ekko received the goods on January 6, 2017. Graves's account had been outstanding for almost 1.5 years already. The entity decided to write-off the account. Transactions in January 2017 include the following: • Ashe paid P600,000 of its 2016 accounts receivable within the discount period, while Ekko paid all of their 2016 accounts within the discount period. O Fizz returmed P50,000 worth of goods on January 4 pertaining to their 2016 purchases from Healthy Teeth.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

How much is the net sales for the current period?

A. 10,559,000

B. 10,492,000

C. 10,491,000

D. 10,542,000

Transcribed Image Text:You were engaged to audit the financial statements of Healthy Teeth Company, a company selling different kinds of chocolates, as of and for the period ended December 31, 2016. The ending accounts reccivable balance of your client is P4,300,000. The following is a summary of the amounts based from the customers' replies to the confirmation requests, and the corresponding aging of thcir accounts (based from the subsidiary ledger): Age Amount 121. Duer Amount 31-60 days per Subsidiary Ledaer 1,250,000 Customer A30 days 180 per Reply 180 days days das Ashe 1,240,000 1,200,000 50,000 Brand 800,000 800,000 700,000 60,000 40,000 Corki 734,000 734,000 700,000 34,000 Darius 866,000 300,000 866,000 250,000 850,000 16,000 Ekko 300,000 Fizz 320,000 320,000 300,000 20,000 Graves 30.000 30.000 Totals 4,300,000 4.210,000 1,800,000 2.320.000 94,000 40,000 46,000 Percent uncollectible 1% 5% 15% 30% 70% Additional information related to the audit are as follows: Healthy Tecth sclls good with terms 2/10, n/30. Collections for 2016 total to P10,369,000. The beginning balances of Accounts Reccivable and Allowance for Bad Debts are P4,050,000 and P57,900, respectively. The differences in the amount of Ashe Compary's account and Ekko Corp.'s account in the subsidiary ledger and their reply are from recorded sales on December 30, 2016 with term FOB Destination. The goods were reccived by Ashe on January 5, 2017; while Ekko reccived the goods on January 6, 2017. • Graves's account had been outstanding for almost 1.5 ycars alrcady. The entity decided to write-off the account. Transactions in January 2017 include the following: Ashe paid P600,000 of its 2016 accounts reccivable within the discount period, while Ekko paid all of their 2016 accounts within the discount period. Fizz returned P50,000 worth of goods on January 4 pertaining to their 2016 purchases from Healthy Teeth.

Expert Solution