SEBUC, JERELYN D.

ACTCY31S1

Problem 1

Under PAS 18
Accounts Receivable ₱ 100,000.00
Sales
Sales
Sales Discount 1,000.00
Allowance for Sale Dscount
(100,000*2%*50%)

Cash ₱ 58,800.00
Allowance for Sale Discount 1,000.00
Collection of 60%
Sales Discount 200.00
Accounts Receivable

Cash ₱ 40,000.00
Collection of 40%
Accounts Receivable

Under PFRS 15
Sales Accounts Receivable ₱ 99,000.00
Sales

Cash 58,800.00
Collection of 60% Sales 600.00
Accounts Receivable

Cash 39,600.00
Collection of 40%
Accounts Receivable
₱ 100,000.00

1,000.00

₱ 60,000.00

₱ 40,000.00

₱ 99,000.00

59,400.00

39,600.00
SEBUC , JERELYN D.
ACTCY31S1

Problem No. 2

Under PAS 18
Requirement no. 1
2017
Dec. 31 Accounts receivable ₱550,000.00
Sales

Cost of sales 300,000.00

Merchendise inventory

Sales Return 165,000.00

Allowance for sales return
2018
Jan. 5 Cash 302,500.00
Sales Return 82,500.00
Allowance for sales returns 165,000.00
Accounts receivable

Requirement No. 2
2017
Dec. 31 No journal entry

2018
Feb. 1 Accounts receivable ₱550,000.00
Sales

Cost of sales 300,000.00

Mechendise inventory

Under PFRS 15
Requirement No. 1
2017
Dec. 31 Accounts receivable ₱105,000.00
Sales

Cost of sales 70,000.00

Asset for right to recover product to be returned 30,000.00
Merchendise inventory

2018
Jan. 5 Cash ₱82,500.00
Sales returns 22,500.00
Accounts receivable

Merchendise inventory 45,000.00

Cost of sales
Asset for right to recover product to be returned

Requirement No. 2
2017
Dec. 31 Asset for right to recover product to be returned 100,000
Mechendise inventory

2018
Feb. 1 Account receivable ₱ 150,000.00
Sales

Cost of Sales 100,000.00

Asset for right to recover product to be returned
₱550,500.00

300,000.00

165,000.00

550,000.00

₱550,000.00

300,000.00

₱105,000.00

100,000.00
 ₱105,000.00

30,000.00
15,000.00

100,000

₱ 150,000.00

100,000.00
Magleo, Angel, Jr. C.
ACTCY31S1

Problem 3

A. Cost of goods sold ₱ 20,000.00

Inventory ₱ 20,000.00

D. Sales 40,000.00
Accounts Receivable 40,000.00

E. Sales 100,000.00
Accounts Receivable 100,000.00

Inventory 56,000.00
Cost of goods sold 56,000.00

Goods on Consignment 56,000.00

Inventory 56,000.00

F. Accounts Receivable 60,000.00

Sales 60,000.00

H. Accounts Receivable 80,000.00

Sales 80,000.00

Cost of Merchendise sold 55,000.00

Inventory 55,000.00
Magleo, Angel, Jr. C.
ACTCY31S1

Problem 4

Allowance for doubtful accounts 1/1

Establishment of accounts written off in prior years
Customer accounts written off
Bad debt expense 21,000,000 3%
Allowance for doubtful accounts 12/31
₱ 170,000.00
80,000.00
(300,000.00)
630,000.00
₱ 580,000.00
Magleo, Angel, Jr. C.
ACTCY31S1

Problem 5

Accounts receivable ₱ 4,100,000.00

Rate for doubtful accounts 3%
bad debt expense 123,000.00
Allowance for doubtful accounts 100,000.00
Bad debt expense ₱ 223,000.00
Magleo, Angel, Jr. C.
ACTCY31S1

Problem 6

Requirement no. 1
Expected Cash Discount
Percentage of discount
Total
Expected percentage discount
Accounts receivable 12/31

Requirement no. 2
Accounts receivable 12/31
Bad debt rate 40,000 1,000,000
Allowance for doubtful accounts 12/31/19

Requirement no. 3
Accounts receivable 12/31
Less: Allowance for doubtful Accounts
Allowance for sales discounts
Net realizable value 12/31/19

Requirement no. 4
Allowance for doubtful accounts 12/31/19
Add: Accounts written off
Total
Less: Allow. For doubtful accounts 12/31/18
Bad debt recoveries
Doubtful Account expense 12/31/2019
 ₱ 6,000.00
2%
300,000.00
10%
₱ 3,000,000.00

₱ 3,000,000.00
1.5 0.06
₱ 180,000.00

₱ 3,000,000.00
₱ 180,000.00
6,000 186,000.00
₱ 2,814,000.00

₱ 180,000.00
44,000.00
224,000.00
₱ 40,000.00
3,000.00 43,000.00
₱ 181,000.00
 Magleo, Angel, Jr. C.
ACTCY31S1

Problem 7

Requirement no. 1
2018

Aging Category Balance

Nov - Dec ₱ 2,280,000.00
July - Oct 1,200,000.00
Jan - June 800,000.00
Prior to Jan. 140,000.00
Adjusted balance ₱ 4,420,000.00

Requirement no. 2
Sales
Rate for Doubtful account
Total
Add: Changes in Allow. For doubtful acc.
Doubtful account for 2018

Requirement no. 3
Doubtful accounts - Beginning
Add: Accrual during the year
Recoveries
Total
Less: Write-off
Total changes in allowance for doubtful Accounts

Total increase for Doubtful Accounts

Adjusted balance of Doubtful Accounts
Add: Prior to Jan 1.
Less: Changes in Allowance for doubtful accounts
Total increase in doubtful accounts
 Percent Doubtful Accounts
2% ₱ 45,600.00
15% 180,000.00
25% 200,000.00
80% 112,000.00
₱ 537,600.00

₱ 18,000,000.00
2%
360,000.00
187,600.00
₱ 547,600.00

₱ 260,000.00
360,000.00
30,000.00
650,000.00
180,000.00
₱ 470,000.00

₱ 537,600.00
120,000.00
470,000.00
₱ 187,600.00
Magleo, Angel, Jr. C.
ACTCY31S1

Problem 8

Requirement 1
Present value of principal ₱ 2,000,000.00 0.7118 ₱ 1,423,600.00
Add: Present value of interest payments 480,360.00
Total PV/SP 2,000,000 10% 2.4018 1,903,960.00
Less Carrying amount of machinery
Cost 1,000,000.00
Less Acc. Depreciation 150,000.00 850,000.00
Gain on sale ₱ 1,053,960.00

Requirement 2
Total Present value / Selling price 1,903,960
Interest rate 12%
Interest income ₱ 228,475

Requirement 3
Interest income ₱ 228,475.00
Less: Interest collection 200,000.00
Discount amortization 28,475.00

Present value, Jan. 01, 2018 1,903,960

Add: Discount Amortization 28,475
Carrying amount of NR, December ₱ 1,932,435.00

Requirement 4
Current portion of Note ₱ -

Requirement 5
Non-current portion of Note ₱ 1,932,435.00