PROBLEM NO. 1 -
Yester'a( Coan(
Question no. 1 Year
Charge sales
2001 2001 2002 2002 2003 2003
600, 600,00 000 0 1,50 1,500, 0,00 000 0 1,!0 1,!00, 0,00 000 0 3,"00,000
AR writen-off
Recoveries
15,3 15,300 00 3,2 3,200 00 51,0 51,000 00 103,500
600 600 2,40 2,400 0 3,00 3,000 0 6,000
#ncollectible accounts $2001 to 2003% &ivi'e b( charge sales $2001 to 2003% )ercentage of uncollectible accounts to charge sales
Accounts uncollectible 14, 14,00 00 34,! 34,!00 00 4!,0 4!,000 00 ",500 ",500 3,"00,000 2*50+
Questions no. 2 to 4 $A% Year
2004 2004 2005 2005
Charge sales
1,"5 1,"50,0 0,000 00 1,65 1,650, 0,00 000 0 3,600,000
$ % $A% . 2*5+ st* 'oubtful Accounts
$C%
$&%
AR writen-off
Recover(
4!, 4!,50 50 41,2 41,250 50 "0,000
3",0 3",000 00 !,40 !,400 0 4,400
3,60 3,600 0 3,600
Recor'e' 'oubtful accounts e.ense $su of 2005 write-offs% houl' be balance of 'oubtful accounts e.ense for 2004 verstateent of 'oubtful accounts e.ense o* 2 o* 3 o* 4
41,250 13,350 !53,!00
13,3 13,350 50 32,! 32,!50 50 46,200 46,200 54,600 41,250 13,350
& A $)"00,00 ,000 - )46,200%
A'usting entr(7 a' &ebt Recover( Retaine' arnings $see below% Allowance for &oubtful Accounts &oubtful Accounts .ense
&oubtf &oubtful ul accoun accountt e. rovi' rovi'e' e' 9ess recoveries et 'oubtful account e. hou houl' l' be rov rov for for &:A &:A e. e. ver $un'er%
$ % $% - /$C% -$&% Allowance to be set u
2001 3,300 3,300 3,300 15,0 15,000 00 $11,00%
3,600 55,"50 46,200 13,350 2002 15,000 15,000 600 14,400 3,5 3,500 00 $23,100%
2003 34,!00 34,!00 2,400 32,400 45,0 45,000 00 $12,600%
2004 43,200 43,200 3,000 40,20 ,200 4!, 4!,50 50 $!,550%
8otal "6,300 "6,300 6,000 "0,30 ,300 146, 146,25 250 0 $55,"50%
PROBLEM NO. 2 -
el Cororation
1 A
Aging Categor( oveber-&eceber 2005 ;ul(-ctober 2005 ;anuar(-;une 2005 )rior to ;anuar( 1, 2005 8otal
alance 2,2!0,000 1,200,000 !00,000
140,000 4,420,000
*
)ercent 2+ 15+ 25+ !0+
Allowance 45,600 1!0,000 200,000 112,000 53,600
* P260,000 - P120,000 2
3
C Re )120,000% Recover( in 2005 of ba' 'ebts written off Allowance, 1:1:05 &oubtful accounts e.ense for 2005 Re )120,000% ?ncrease in allowance
PROBLEM NO. 3 1
53,600 260,000 360,000 30,000 $300,000%
&onDt 9et Be &own Cororation
0-30 'a(s 31-60 'a(s 61-"0 'a(s 0*30+ 1*!0+ 12*00+ 0*50+ 1*60+ 11*00+ 0*20+ 1*50+ "*00+ 0*40+ 1*0+ 10*20+ 0*"0+ 2*00+ "*0+ 2*30+ !*60+ 51*"0+
Average
0*46+
Age of accounts 0 @ 30 'a(s 31 @ 60 'a(s 61 @ "0 'a(s "1 @ 120 'a(s over 120 'a(s
1*2+
10*3!+
AR balance 12:31:2005 1,264,!00 6"1,500 2!!,600 114,"5 5",100 2,41!,"5
Rate 0*46+ 1*2+ 10*3!+ 41*!0+ 6*00+
"1-120 'a(s over 120 'a(s 3!*00+ 65*00+ 41*00+ 0*00+ 50*00+ 6"*00+ 4*00+ !1*00+ 33*00+ "5*00+ 20"*00+ 3!0*00+ 41*!0+ Allowance 5,!1!*0! 11,!"3*!0 2","56*6! 4!,05"*55 44,"16*00 140,644*11
&oubtful accounts e.ense 13,!"4 Allowance for &oubtful e.ense * (P140,644 - P126,750)
PROBLEM NO. 4 -
2
6*00+
& $&ebit% $Cre'it%
1
350,000 1!,600
C Year 2004 2003 2002 2001 2000 8otal
2
53,600 300,000 $30,000% $260,000% 54,600
? houl' ave Enown etter Cororation C Current tra'e notes receivable7 leanor 2,400,000 gt* )eer 3,600,000 6,000,000 B b ll $)1 200 000
24+
3:12%
2 000
13,!"4
A
1 2 3 4 5 6 ! " 10 11 12 13 14 15 16 1 1! 1" 20 21 22 23 24 25 26 2 2! 2" 30 31 32 33 34 35
Cash on han' an' in banF otes receivable Accounts receivable Allow* for 'oubtful accounts Accounts receivable-net Accounts receivable-others A'vances to officers an' elo(ees BarFetable securities Allow* for 'ecline in BG of arFetable sec* ?nventories )rea(ents 8otal curent assets )roert(, lant an' e
3!,00 4,000 36,000 1,!00 40,100 2,50 3,!40 13,000 1,35 15,400 100 111,"04 ""0,000 346,000 566,000 6,"04 600 2,!00 2,!00 3",000 3,000 400,000 311,102 125,104 "44,000 66",600 2!0,400 20,"! 23,602 5,000 6,500 16,352 1,000 1,000 1,000
B
35,002 4,500 40,000 2,000 3!,000 1,000 10,50 250 20,000 500 113,302 1,"10,000 344,000 1,566,000 13,"50 4,000 4,000 5,200 400,000 3,000 405,200 200,000 10!,50 "4!,000 665,000 2!2,400 264,"! 15,000 ,250 ",000 11,000 2,250 4,000 500
C
34,402 5,000 42,000 2,100 40,000 500 2,!40 !,500 1,125 24,600 113,"50 "10,000 350,000 606,000 6",302 5,200 5,200 4,000 363,000 43,000 363,000 10!,50 111,102 "50,000 661,000 2!5,000 20,000 1,602 5,500 6,000 1,000 1,50 3,000 2,000
D
35,502 5,500 3!,000 1,"00 3","00 1,000 3,40 4,250 16,000 "00 112,!02 "40,000 356,000 5!4,000 6!,!02 2,!00 1,200 1,200 360,000 40,000 36!,200 30!,50 "4,50 "52,000 664,400 2!,000 264,000 1!,400 ,50 3,000 14,000 1,500
