1 d.

P508,000
Debit Credit
Accounts Receivable 6,500,000.00 x 8% =
Allowance for doubtful accounts 12,000.00
Net credit sales 24,000,000.00

Adjusting entry:
Bad Debts Expense 508,000.00
Allowance for doubtful accounts 508,000.00

Accounts Receivable ₱ 6,500,000.00

Less: Allowance for bad debts 520,000.00
Amortized cost ₱ 5,980,000.00

2 c. P240,000
Debit Credit
Accounts Receivable 3,000,000.00 x 8% =
Allowance for doubtful accounts 12,000.00
Net credit sales 15,000,000.00

3 b. P590,000

Bad debts expense 90,000.00

Allowance for bad debts 90,000.00

Allowance for bad debts 40,000.00

Accounts receivable 40,000.00

4 b. P537,500

Accounts receivable 600,000.00

 Uncollectible AR via aging 62,500.00
₱ 537,500.00

Adjusting entry:
Bad debts expense 17,500.00
Allowance for bad debts 17,500.00

5 d. P15,000
Debit Credit
Accounts Receivable 750,000.00 x 2% =
Allowance for uncollectible accounts 8,000.00
Net credit sales 3,000,000.00

6 b. P1,873,500

Debit Credit
Accounts Receivable 360,000.00
Allowance for bad debts 12,000.00
Net credit sales 1,800,000.00

Entries to record transactions affecting AR:

1 Accounts Receivable 1,800,000.00
Sales 1,800,000.00
To record sales on Account

2 Allowance on bad debts 7,500.00

Accounts receivable 7,500.00
To write off AR

3 Cash
Accounts Receivable
To record collection of AR
₱ 520,000.00 Allowance for bad debts at year end
- 12,000.00
₱ 508,000.00 bad debts expense

₱ 240,000.00 Allowance for bad debts at year end

12,000.00
₱ 252,000.00 bad debts expense

Allowance for bad debts

40,000.00 90,000.00
₱ 50,000.00

AR balance, Dec. 31, 2022 ₱ 590,000.00

Allowance for bad debts 50,000.00
Accounts Receivable (amortized) ₱ 540,000.00

Allowance for bad debts

 45,000.00 amount of adjusting entry
17,500.00 should be balance after adjusting
₱ 62,500.00

₱ 15,000.00

Estimated
Age Amount Uncollectible
0-60 days 89,000.00 1% = 890.00
61-120 days 90,000.00 3% = 2,700.00
Over 120 days 100,000.00 10% = 10,000.00
ending balance of AR ₱ 279,000.00 ₱ 13,590.00

Accounts Receivable
360,000.00 7,500.00
1,800,000.00 1,873,500.00
₱ 279,000.00
10,650.00
10,650.00
7 a. P9,090

Allowance for bad debts

written-off 7,500.00 12,000.00 beg. Bal
₱ 4,500.00 allowance balance

8 d. P18,000

Allowance for bad debts

write-off 10,800.00 15,000.00 beg. Bal
3,150.00
7,350.00 balance before adjustment
10,650.00 adjusting entry
₱ 18,000.00 balance at the end

9 a. Loss of P100,000
Entry to record factoring:
Amount of AR factored 2,000,000.00 Cash
Purchase Price (100% - 5%) 95% Loss on factoring
Selling Price of AR ₱ 1,900,000.00 Receivable from factor
Less: factor's holdback (P2M x 10%) ₱ 200,000.00
Proceeds ₱ 1,700,000.00

Amount of AR factored 2,000,000.00

less: Selling Price of AR 1,900,000.00
Loss on Sale of AR ₱ 100,000.00

10 c. P92,000

Amount of AR factored 100,000.00

Purchase Price (100% - 3%) 97%
Selling Price of AR ₱ 97,000.00
Factor's Holdback 5,000.00
Proceeds ₱ 92,000.00
11 c. P328,300

Cash 328,300.00
Misc. expense 6,700.00
Loans payable 335,000.00

12 P48,777.78

Face value 50,000.00 Entry to record discounting of NR with no r

Less: Discount (P50,000 x 10% x 88/360) 1,222.22 Cash
Proceeds ₱ 48,777.78 Loss on sale of NR

Term of note: Entry to record discounting of NR with reco

Feb. 16 - Mar. 15 30 Cash
Mar. 16 - Apr. 15 30
Apr. 16 - May 15 30
May 16 - Jun 15 30
120

Expired number of days:

Days in February 28
Less: date of the note, February 15 13
Date of Discounting, March 19 19
32

Discount period:
Term of note 120
Less: expired number 32
88
 Estimated
Age Amount Uncollectible
0-60 days 89,000.00 1% = 890.00
wance balance 61-120 days 90,000.00 3% = 2,700.00
Over 120 days 100,000.00 10% = 10,000.00
₱ 13,590.00
4,500.00
₱ 9,090.00

360,000.00 Adjusting entry:

5% Bad Debts Expense
nce before adjustment ₱ 18,000.00 Allowance for doubtful accounts

nce at the end

Entry to record factoring:

1,700,000.00
Loss on factoring 100,000.00
Receivable from factor 200,000.00
Accounts Receivable 2,000,000.00
Entry to record discounting of NR with no recourse:
48,777.78
Loss on sale of NR 1,222.22
Notes Receivable 50,000.00

Entry to record discounting of NR with recourse

48,777.78
Liability on discounted NR 48,777.78
10,650.00
10,650.00
13 P30,000

Face value ₱ 400,000.00 Entry to amortize dis

Multiply by present value factor 0.75 Discount on NR
Present value as of Jan. 1, 2019 ₱ 300,000.00
Multiply by interest rate 10%
Interest income, 2019 ₱ 30,000.00

14 P330,000

Present value as of Jan. 1, 2019 ₱ 300,000.00

Add: first amortization of discount 30,000.00
Carrying value at Dec. 31, 2019 ₱ 330,000.00

15 P33,000

Carrying value at Dec. 31, 2019 ₱ 330,000.00

Multiply by interest rate 10%
Interest income, 2020 ₱ 33,000.00

16 P363,000

Present value as of Jan. 1, 2019 ₱ 300,000.00

Add: 1st amortization of discount 30,000.00
2nd amortization of discount 33,000.00
Carrying value at Dec. 31, 2020 ₱ 363,000.00

17 P51,840

Carrying value at Jan. 1, 2021 ₱ 432,000.00 Installment payment

Multiply by interest rate 12% Multiply by present v
Interest revenue for the year 2021 ₱ 51,840.00 Carrying value at Jan

Face value of note

18 P58,060.80 Carrying value at Jan
Discount on notes re
Present value as of Jan. 1, 2019 ₱ 432,000.00
Add: first amortization of discount 51,840.00
Carrying value at Dec. 31, 2019 ₱ 483,840.00
 Multiply by interest rate 12%
Interest revenue for the year 2022 ₱ 58,060.80

19 P363,840

Face value ₱ 600,000.00

Less: 1st installment payment received - 120,000.00
Balance ₱ 480,000.00
Less: unamortized discount at Dec. 31, 2021
(P168,000 - 51,840) - 116,160.00
Amortized cost of NR at Dec. 31, 2021 ₱ 363,840.00

20 P15,000

Face value ₱ 400,000.00

Multiply by present value factor 0.75
Present value as of Jul. 1, 2021 ₱ 300,000.00
Multiply by interest rate 10%
Interest income, 2021 ₱ 30,000.00
Time 1/2
Interest income, Jul - Dec 2021 ₱ 15,000.00

21 P1,639,040
PV of single payment, 2 years, 10%
Carrying value of the receivable (P5M + P500K) ₱ 5,500,000.00
PV of future cash payments to be received:
Principal due on Dec. 31, 2021 (P4M x 0.8264) 3,305,600.00
Interest for 2 years ((P4M x 8%) x 1.7355) 555,360.00
Total PV future payments to be received 3,860,960.00
Impairment loss ₱ 1,639,040.00

PV of ordinary annuity, 2 years, 10%

22 P3,860,960

Restructured Notes Receivable 3,860,960.00

Impairment Loss - Receivables 1,639,040.00
 Notes Receivable 5,000,000.00
Interest Receivable 500,000.00

23 P49,330

Carrying value of the receivable (P500K + P50K) ₱ 550,000.00

PV of future cash payments to be received:
Principal due on Dec. 31, 2021 (P500K x 0.8265) 431,250.00
Interest for 2 years ((P500K x 8%) x 1.7355) 69,420.00
Total PV future payments to be received 500,670.00
Impairment loss ₱ 49,330.00

24 a. P1,390,000

Cash balance, Jan. 1, 2022 ₱ 650,000.00

Cash sales 740,000.00
Cash balance at Dec. 31, 2022 ₱ 1,390,000.00
Entry to amortize discount on NR:
Discount on NR 30,000.00
Interest Income 30,000.00

Installment payment ₱ 120,000.00

Multiply by present value factor 3.6
Carrying value at Jan. 1, 2021 ₱ 432,000.00

Face value of note ₱ 600,000.00

Carrying value at Jan. 1, 2021 432,000.00
Discount on notes receivable ₱ 168,000.00