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ASSESSMENT RECEIVABLES

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Rojun Kristufer Medenilla
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48 views4 pages

ASSESSMENT RECEIVABLES

Uploaded by

Rojun Kristufer Medenilla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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L.V.

L UP ACCOUNTING TUTORIALS
FAR
CONTACT #0951 913 5318

TOPIC: RECEIVABLES M.LIMHEYA

ASSESSMENT RECEIVABLES

QR Company provided the following information relating to accounts receivable for the year 2018:

Accounts receivable, 1/1/18 P 1,300,000


Credit sales 5,400,000
Collections from customers (excluding recovery) 4,750,000
Accounts written off 125,000
Collection of accounts written off 25,000
Estimated uncollectible receivables per aging of receivables, 12/31/18 165,000

1. What is the balance of accounts receivable, before allowance for doubtful accounts on December 31, 2018?
A. 1,825,0 B. 1,850,000
00
C. 1,950,0 D. 1,990,000
00

Use the following information to answer items 2 and 3:


Gringo Company provided the following transactions affecting accounts receivable during 2025:

Sales – cash and credit P


5,900,000
Cash received from non-credit customers 2,100,000
Cash received from credit customers, all of whom took advantage of
the discount terms 4/10 n/30 3,024,000
Accounts receivable written off as worthless 50,000
Credit memorandum issued to credit customers for returns and 250,000
allowances
Cash refunds given to non-credit customers for returns and allowances 20,000
Recoveries on accounts receivable written off as uncollectible in prior
periods not included in cash received from customers stated above 80,000

Balances on January 1, 2025:


Accounts receivable P 950,000
Allowance for doubtful accounts 100,000

The company provided for uncollectible account losses by crediting the allowance for doubtful accounts in the amount
of P70,000 for the year 2025.

2. What is the balance of accounts receivable on December 31, 2025?


A. 1,300,00 B. 1,426,000
0
C. 1,280,00 D. 1,220,000
0

3. What is the balance of allowance for doubtful accounts on December 31, 2025?

A. 120,00 B. 200,000
0
C. 250,00 D. 170,000
0

TK Company used the allowance method of accounting for doubtful accounts.

The following summary schedule was prepared from an aging of accounts receivables outstanding on December 31,
2018:

Number of days Amount Percentage estimated to be uncollectible


outstanding
0 – 30 days 5,000,000 2%
31 – 60 days 2,000,000 10%
Over 60 days 1,000,000 20%

The following additional information is available for the year 2018:

Net credit sales for 2018 40,000,000


Allowance for doubtful accounts:
Balance, January 1 450,000 credit
Balance before adjustment, December 31 20,000 debit

The company based the estimate of doubtful accounts on the aging of accounts receivable.
FAR Page 1 of 4
L.V.L UP ACCOUNTING TUTORIALS
FAR
CONTACT #0951 913 5318

TOPIC: RECEIVABLES M.LIMHEYA

4. What amount should be reported as doubtful accounts expense for 2018?


A. 470,00 B. 480,000
0
C. 500,00 D. 520,000
0

On December 1, 2018, LT Company assigned specific accounts receivable totaling P4,000,000 as collateral on a
P3,000,000, 12% note from Metrobank. The company will continue to collect the assigned accounts receivable. In
addition to the interest on the note, Metrobank also charged a 5% finance fee deducted in advance on the P3,000,000
value of the note.

The December collections of assigned accounts receivable amounted to P2,000,000 less cash discounts of P100,000.
On December 31, 2018, the company remitted the collections to the bank in payment for the interest accrued on
December 31, 2018 and the note payable.

The company accepted sales returns of P150,000 on the assigned accounts and wrote off assigned accounts of
P200,000.

5. What amount of cash was received from the assignment of accounts receivable on December 1, 2018?
A. 4,000,000 B. 3,000,000
C. 3,800,000 D. 2,850,000

6. What is the carrying amount of note payable on December 31, 2018?


A. 1,000,000 B. 1,100,000
C. 1,130,000 D. 1,460,000

7. What is the balance of accounts receivable – assigned on December 31, 2018?


A. 2,100,000 B. 2,000,000
C. 1,650,000 D. 1,850,000

8. What amount should be disclosed as the equity of LT Company in assigned accounts on December 31, 2018?
A. 550,000 B. 870,000
C. 520,000 D. 970,000

BV Company accepted from a customer P1,000,000 face amount, 6-month, 8% note dated April 15, 2018. On the same
date, the company discounted the note without recourse at a 10% discount rate.

9. What amount of cash was received from the discounting?


A. 1,040,000 B. 990,000
C. 988,000 D. 972,000

10. What is the loss on note receivable discounting?


A. 50,000 B. 40,000
C. 52,000 D. 12,000

11. If the discounting is a secured borrowing, what is included in the journal entry to record the transaction?
A. Debit loss on discounting, P87,000
B. Debit interest expense, P87,000
C. Credit liability for note discounted, P6,063,000
D. Credit interest income, P63,000

Use the following information to answer items 12 to 15:


On April 1, 2017, Minotaur Company sold goods to a customer and accepted in exchange a promissory note with face
amount of P3,000,000 and stated 12% interest payable annually every March 31. The prevailing rate of interest for a
note of this type on April 1, 2017 was 9%. The note mature at an annual installment of P750,000 every March 31. (Use
three decimal places for the present value factor)
12. What was the selling price of the goods sold on April 1, 2017?
A. 2,378,880 B. 3,000,570 C. 3,189,390 D. 3,564,000

13. Interest income for 2018 amounts to


A. 159,734 B. 202,500 C. 292,500 D. 231,496

14. Carrying value of the note receivable as of December 31, 2019 is


A. 1,529,675 B. 1,664,675 C. 779,674 D. 769,762

15. Accrued interest receivable as of December 31, 2020 is


FAR Page 2 of 4
L.V.L UP ACCOUNTING TUTORIALS
FAR
CONTACT #0951 913 5318

TOPIC: RECEIVABLES M.LIMHEYA

A. 51,959 B. 67,500 C. 135,000 D. 202,500

Use the following information to answer items 16 to 18:


NORTHSOUTH Bank loaned P5,000,000 to GG Company on January 1, 2016. The terms of the loan require principal
payments of P1,000,000 each year for 5 years plus interest at 8%.

The first principal and interest payment is due on January 1, 2017. GG made the required payments during 2017 and
2018.

However, during 2018 GG began to experience financial difficulties, requiring NORTHSOUTH Bank to reassess the
collectability of the loan.

On December 31, 2018, NORTHSOUTH Bank has determined that the remaining principal payment will be collected but
the collection of the interest is unlikely. NORTHSOUTH Bank did not accrue the interest on December 31, 2018.

The present value of 1 at 8% is as follows:


For one period 0.926
For two periods 0.857
For three periods 0.794

16. What is the loan impairment loss for 2018?


A. 423,000 B. 217,000
C. 222,000 D. -0-

17. What is the interest income for 2019?


A. 126,160 B. 142,640
C. 240,000 D. -0-

18. What is the carrying amount of the loan receivable on December 31, 2019
A. 2,000,000 B. 1,925,640
C. 1,640,360 D. 1,783,000

Answer:

1 A 11 B

2 A 12

3 B 13

4 D 14

5 D 15

6 C 16

7 C 17

8 C 18

9 C

FAR Page 3 of 4
L.V.L UP ACCOUNTING TUTORIALS
FAR
CONTACT #0951 913 5318

TOPIC: RECEIVABLES M.LIMHEYA

10 D

FAR Page 4 of 4

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