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Problems On Chapter 4

The document details transactions involving a company's accounts receivable. It shows sales on account, collections within and beyond the discount period, sales returns granted and estimated, and the corresponding journal entries to record each transaction.

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Rose Aubrey A Cordova
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© © All Rights Reserved
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Download as XLSX, PDF, TXT or read online on Scribd
65 views

Problems On Chapter 4

The document details transactions involving a company's accounts receivable. It shows sales on account, collections within and beyond the discount period, sales returns granted and estimated, and the corresponding journal entries to record each transaction.

Uploaded by

Rose Aubrey A Cordova
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Dreamer Company reported the "Receivables" account with a debit balance of P2,000,000 at year-end

The allowance for doubtful accounts had a credit balance of P50,000 on same date.

Subsidiary details revealed the following:


Trade accounts receivable
Trade notes receivable
Installments receivable, normally due 1 year or 2 years
Customer's account reporting credit balances arsing from sales return
Advance payments for purchase of merchandise
Customer's reporting a credit balances arising from advance payments
Cash advance on subsidiary
Claim from insurance entity
Subscription receivabe due in 60 days
Accrued interest receivable

REQUIRED:
a. Trade accounts receivable 775,000
Trade notes receivable 100,000
Installments receivable 300,000
Advances to suppliers 150,000
Advances to subsidiary 400,000
Claim receivable 15,000
Subscription receivable 300,000
Accrued interest receivable 10,000
Customer's credit balances 30,000
Advances from customers 20,000
Receivables 2,000,000

b. Trade accounts receivables 775,000


Allowance for Doubtful Accounts -50,000
Trade notes receivable 100,000
Installment receivables 300,000
Advances to suppliers 150,000
Claim receivables 15,000
Subscription receivables 300,000
Accrued interest receivable 10,000
Trade and other receivables ₱ 1,600,000
0,000 at year-end

775,000
100,000
300,000
-30,000
150,000
-20,000
400,000
15,000
300,000
10,000
2,000,000
Affectionate Company sold the merchandise on account for P500,00. The terms are 3/10, n/30.
The related freight charge amounted to P10,000. The account was collected within the discount period.

Required:
Prepare the journal entries to record the transactions under the following freight terms:
1.) FOB destination and freight collect
2.) FOB destination and freight prepaid
3.) FOB shipping point and freight collect
4.) FOB shipping point and freight prepaid

1.)
Accounts Receivable 500,000
Freight out 10,000
Sales 500,000
Allowance for freight charge 10,000

Cash 475,000
Sales Discount (500,000 x 3%) 15,000
Allowance for freight charge 10,000
Accounts Receivable 500,000

2.)
Accounts Receivable 500,000
Freight out 10,000
Sales 500,000
Cash 10,000

Cash 485,000
Sales Discount (500,000 x 3%) 15,000
Accounts Receivable 500,000
s are 3/10, n/30.
thin the discount period.

3.)
Accounts Receivable 500,000
Sales 500,000

Cash 485,000
Sales Discount (500,000 x 3%) 15,000
Accounts Receivable 500,000

4.)
Accounts Receivable 510,000
Sales 500,000
Cash 10,000

Cash 495,000
Sales Discount (500,000 x 3%) 15,000
Accounts Receivable 510,000
The following Transactions occurred in summary form:

1.) Sales of merchandise on account, 2/10, n/30 4,000,000


2.) Collection within the discount period 1,470,000
3.) Collection beyond the discount period 1,000,000
4.) Sales return granted 100,000
5.) Sales return estimated at the end of the year 20,000

Account Title Debit Credit


1) Accounts Receivable 4,000,000
Sales 4,000,000

2) Cash 1,470,000
Sales Discount 30,000
Accounts Receivable 1,500,000

3) Cash 1,000,000
Accounts Receivable 1,000,000

4) Sales Return 100,000


Accounts Receivable 100,000

5) Sales Return 20,000


Accounts Receivable 20,000

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