2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition

CHAPTER 1

PROBLEM 1-1 (IAA) - ALBANIA COMPANY

Requirement 1 - Adjusting Entries

a.) Accounts Receivable 200 000

Cash in Bank 200 000

b.) Cash in Bank 250 000

Accounts Payable 250 000

c.) Cash in Bank 100 000

Accounts Payable 100 000

d.) Accounts Receivable 450 000

Cash in Bank 450 000

Requirement 2 - Total Cash and Cash Equivalents

Cash in Bank 3,000,000

Customer Check Outstanding ( 200,000)
Undelivered Check Jan. 15 250,000
Postdated Check Delivered Jan. 31 100,000
Collection on Jan. 15 ( 450,000)
Adjusted Cash in Bank 2,700,000
Time Deposit - 30 days 1,000,000
Petty Cash Fund  20,000
Total Cash and Cash Equivalents 3,720,000

[email protected]

about:blank 1/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 1-2 (IAA) - ARGENTINA COMPANY

Requirement 1 - Adjusting Entries

a.) Accounts Receivable 150 000

Cash on Hand 150 000

b.) Expenses 10 000

Receivable from Employees 5 000
Petty Cash Fund 15 000

Requirement 2 - Total Cash and Cash Equivalents

Cash on Hand 1,000,000

Postdated Customer Check ( 150,000)
Adjusted Cash on Hand 850,000

Petty Cash Fund 50,000

Unreplenished Petty Cash Expenses (10,000)
Postdated Employee Check ( 5,000)
Adjusted Petty Cash Fund 35,000

Cash on Hand 850,000

Petty Cash Fund 35,000
Security Bank - Current Account 2,000,000
PNB - Current Account 1,500,000
Bond Sinking Fund  2,500,000
Total Cash and Cash Equivalents 6,885,000

[email protected]

about:blank 2/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 1-3 (IAA) - ARMENIA COMPANY

Requirement 1 - Adjusting Entries

a.) Accounts Receivable 100 000

Cash on Hand 100 000

b.) Accounts Receivable 150 000

Cash on Hand 150 000

c.) Receivable from Employees 10 000

Cash Short or Over 5 000
Petty Cash Fund 15 000

d.) Cash in Bank 200 000

Accounts Payable 200 000

e.) Cash in Bank 300 000

Accounts Payable 300 000

Requirement 2 - Total Cash

Cash on Hand 1,000,000

NSF Customer Check Jan. 5 ( 100,000)
Postdated Customer Check ( 150,000)
Adjusted Cash on Hand 750,000

Petty Cash Fund 50,000

Receivable from Employees (10,000)
Cash Shortage ( 5,000)
Adjusted Petty Cash Fund 35,000

Cash in Bank 4,000,000

Undelivered Company Check Jan. 5 200,000
Postdated Check Delivered Jan. 31  300,000
Adjusted Cash in Bank 4,500,000

[email protected]

about:blank 3/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Cash on Hand 750,000

Petty Cash Fund 35,000
Cash in Bank 4,500,000
Savings Deposit 2,000,000
Total Cash 7,285,000

PROBLEM 1-4 (PHILCPA) - CALLOUS COMPANY

Requirement 1 - Total Cash and Cash Equivalents

Cash on Hand
NSF Customer Check Jan. 5 200,000
Postdated Customer Check ( 35,000)
Adjusted Cash on Hand ( 15,000)
150,000
Petty Cash Fund
Currency and Coins  5,000

Cash in Bank - Philippine Bank

Philippine Bank - Current Account 5,000,000
Undelivered Company Check 25,000
Postdated Check Delivered  45,000
Adjusted Cash in Bank 5,070,000

Cash on Hand 150,000

Petty Cash Fund 5,000
Philippine Bank - Current Account 5,070,000
City Bank - Current Account #1 4,000,000
City Bank - Current Account #2 ( 100,000)
Asia Bank Saving Deposit 250,000
Asia Bank Time Deposit  2,000,000
Total Cash and Cash Equivalent  11,375,000

[email protected]

about:blank 4/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Requirement 2 - Adjusting Entries

a.) Accounts Receivable 50 000

Cash on Hand 50 000

b.) Receivable from Officer 2 000

Expenses 12 000
Cash Short or Over 1 000
Petty Cash Fund 15 000

c.) Cash in Bank - Philippine Bank 70 000

Accounts Payable 70 000

d.) Cash in Bank - City Bank 100 000

Bank Overdraft 100 000

Problem 1-5 (ACP) - ZEALOUS COMPANY

Imprest Fund System Fluctuating Fund System

a.) Petty Cash Fund 10 000 a.) Petty Cash Fund 10 000
Cash in Bank 10 000 Cash in Bank 10 000

b.) No Entry b.) Postage 1 500

Supplies 5 500
c.) Petty Cash Fund 5 000 Transportation 1 200
Postage 1 500 Misc. Expense 800
Supplies 5 500 Petty Cash Fund 9 000
Transportation 1 200
Misc. Expense 800 c.) Petty Cash Fund 14 000
Cash in Bank 14 000 Cash in Bank 14 000

[email protected]

about:blank 5/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Problem 1-6 (ACP) - ZENITH COMPANY

Imprest Fund System Fluctuating Fund System

a.) Petty Cash Fund 10 000 a.) Petty Cash Fund 10 000
Cash in Bank 10 000 Cash in Bank 10 000

b.) No Entry b.) Postage 1 500

Supplies 3 000
c.) No Entry Petty Cash Fund 4 500

d.) Petty Cash Fund 10 000 b.) Transportation 1 000

Postage 1 500 Accounts Payable 3 500
Supplies 3 000 Petty Cash Fund 4 500
Transportation 1 000
Accounts Payable 3 500 c.) Petty Cash Fund 19 000
Cash in Bank 19 000 Cash in Bank 19 000

Problem 1-7 (IAA) - LABORIOUS COMPANY

Imprest Fund System Fluctuating Fund System

5/2  Petty Cash Fund 10 000 5/2  Petty Cash Fund 10 000
Cash in Bank 10 000 Cash in Bank 10 000

5/29 Postage 1 000 5/29 Postage 1 000

Supplies 3 000 Supplies 3 000
Transportation 2 500 Transportation 2 500
Misc. Expense 1 500 Misc. Expense 1 500
Cash in Bank 8 000 Petty Cash Fund 8 000

6/30 Supplies 2 000 Petty Cash Fund 8 000

Postage 1 000 Cash in Bank 8 000
Transportation 1 000
Petty Cash Fund 4 000 6/30 Supplies 2 000
Postage 1 000
7/1 Petty Cash Fund 4 000 Transportation 1 000
Supplies 2 000 Petty Cash Fund 4 000
Postage 1 000
Transportation 1 000 7/1 No Entry

[email protected]

about:blank 6/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Document continues below

Discover more
from:
Financial
Accounting An…
ACCY 101
Negros Oriental…
95 documents

Go to course

AFAR- Business
Combination…
26
Financial
100% (1)
Accounti…

ACCY 101 Financial

Accounting AND…
6
Financial
100% (1)
Accounti…

FAR 8 - Financial
Accounting and…
3
Financial
100% (1)
Accounti…

Earth Life Science

ABM TVL
22
Financial
100% (1)
Accounti…

FAR diagnostic exam

Financial
13 100% (1)
Accounti…

about:blank 7/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

FAR 1 - Study
Guide/Exam
7/15 Petty Cash Fund 5 000 7/15 Supplies 11 1 500
Supplies 3 500 Postage Financial 500
None
Postage 1 500 Transportation Accounting…
500
Transportation 1 500 Misc. Expense 500
Misc. Expense 500 Cash in Bank 3 000
Cash in Bank 12 000
Petty Cash Fund 12 000
Cash in Bank 12 000

PROBLEM 1-8 (IAA) - TACIT COMPANY

11/2 Petty Cash Fund 10 000

Cash in Bank 10 000

11/30 Postage 2 000

Supplies 5 000
Petty Cash Fund 10 000
Cash in Bank 17 000

12/31 Postage 3 000

Supplies 4 000
Special Deposit 2 000
Petty Cash Fund 9 000

1/1 Petty Cash Fund 9 000

Postage 3 000
Supplies 4 000
Special Deposit 2 000

1/2 No Entry (already reversed)

1/31 Postage 5 000

Supplies 6 000
Accounts Payable 7 000
Cash Short or Over 1 000
Cash in Bank 19 000

[email protected]

about:blank 8/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Problem 1-9 (IAA) - WACKY COMPANY

Imprest Fund System Fluctuating Fund System

12/1 PettyCash Fund 10 000 12/1 PettyCash Fund 10 000

Cash in Bank 10 000 Cash in Bank 10 000

12/20 Selling Expenses 5 000 12/20 Selling Expenses 5 000

Misc. Expenses 2 000 Misc. Expenses 2 000
Equipment 2 000 Equipment 2 000
Cash in Bank 9 000 Petty Cash Fund 9 000

12/31 Rec. from Employees 2 000 Petty Cash Fund 9 000

Selling Expenses 1 000 Cash in Bank 9 000
Transportation 500
Petty Cash Fund 4 000 12/31 Rec. from Employees 2 000
Selling Expenses 1 000
1/1 Petty Cash Fund 4 000 Transportation 500
Rec. from Employees 2 000 Petty Cash Fund 4 000
Selling Expenses 1 000
Transportation 500 1/1 No Entry

1/15 No Entry 1/15 Petty Cash Fund 2 000

Rec. from Employees 2 000
1/31 Selling Expenses 2 000
Admin. Expenses 2 000 1/31 Selling Expenses 500
Transportation 1 500 Admin. Expenses 2 000
Purchases 1 200 Transportation 1 000
Cash in Bank 6 700 Purchases 1 200
Cash in Bank 4 700

Petty Cash Fund 6 700

Cash in Bank 6 700

PROBLEM 1-10 (AICPA) - TRANVIA COMPANY

Cash in Checking Account 350,000

Cash in Money Market Account 750,000
Treasury Bill Jan. 31  3,500,000
Total Cash and Cash Equivalents 4,600,000 → C.

[email protected]

about:blank 9/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 1-11 (IAA) - AFFABLE COMPANY

Cash in Bank - Demand Deposit Acc. 5,000,000

Cash on Hand 400,000
Money Order 50,000
Manager Check 100,000
Traveler Check  1,000,000
Total Cash 6,550,000 → C.

PROBLEM 1-12 (AICPA) - THOR COMPANY

Checkbook Balance 4,000,000

Undelivered Company Check Jan. 15 500,000
Adjusted Cash Balance 4,500,000 → A.

PROBLEM 1-13 (AICPA) - JOANA COMPANY

Petty Cash Fund (50,000 -10,000) 40,000

Cash on Hand (500,000 -100,000) 400,000
Cash in Bank - Current Account 4,000,000
Cash in Bank - Payroll Account 1,000,000
Time Deposit 2,000,000
Cash in Sinking Fund for Bonds Payable  1,500,000
Total Cash and Cash Equivalents 8,940,000 → B.

PROBLEM 1-14 (AICPA) - LAMENTABLE COMPANY

Cash in Bank (6,000,000 - 400,000) 5,600,000

Petty Cash Fund 50,000
Time Deposit 2,500,000
Savings Deposit  1,000,000
Total Cash and Cash Equivalents 9,150,000 → B.

[email protected]

about:blank 10/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 1-15 (AICPA) - BALONEY COMPANY

Cash in Bank 2,250,000

Cash on Hand 125,000
Total Cash 2,375,000 → C.

PROBLEM 1-16 (IAA) - YASMIN COMPANY

Petty Cash Fund 50,000

Current Acc. - First Bank (4,000,000 + 100,000) 4,100,000
Treasury Bill Jan. 31 1,000,000
Total Cash and Cash Equivalents 5,150,000 → B.

PROBLEM 1-17 (IAA) - ROMA COMPANY

Undeposited Collections 600,000

Cash in Bank - BDO Checking Account 4,000,000
Cash in Bank - BDO Fund for Payroll 1,000,000
Cash in Bank - BDO Time Deposit 2,000,000
Cash in Bank - BDO VAT Account  450,000
Total Cash and Cash Equivalents 8,050,000 → D.

PROBLEM 1-18 (AICPA) - ARUBA COMPANY

Question 1
Checkbook Balance 8,000,000
Postdated Customer Check (2,000,000)
NSF Check ( 500,000)
Undelivered Company Check 1,500,000
Cash on Hand 400,000
Change Fund  40,000
Adjusted Cash Balance 7,440,000 → B.

Question 2
Treasury Bill 2,500,000
Money Market Placement 3,000,000
Total Cash Equivalents 5,500,000 → C.

[email protected]

about:blank 11/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 1-19 (IAA) - ECSTASY COMPANY

Question 1
Coin, Currency, Savings and Checking Acc.  3,400,000
Total Cash 3,400,000 → A.

Question 2
Government Treasury Bills 2,000,000
Commercial Paper 1,500,000
Total Cash Equivalents 3,500,000 → A.

PROBLEM 1-20 (PHILCPA) - MARJORIE COMPANY

Coins and Currency 22,000

Accomodation Check 15,000
Adjusted Petty Cash Fund Balance 37,000 → C.

PROBLEM 1-21 (PHILCPA) - ADMIRABLE COMPANY

Coins and Currency 2,000

Reimbursement Check 4,000
Adjusted Petty Cash Fund Balance 6,000 → C.

PROBLEM 1-22 (ACP) - LOVE COMPANY

Question 1
Checkbook Balance 4,000,000
Erroneous Customer Check ( 200,000)
Undelivered Company Check 400,000
Adjusted Cash in Bank 4,200,000 → B.

Question 2
Cash in Bank 4,200,000
Cash on Hand 400,000
Petty Cash Fund (5,000 + 40,000) 45,000
Total Cash 4,645,000 → A.

[email protected]

about:blank 12/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 1-23 (IAA) PROBLEM 1-24 (IAA) PROBLEM 1-25 (IAA)

1. D. 1. D. 1. D.
2. B. 2. A. 2. D.
3. A. 3. C. 3. C.
4. B. 4. B. 4. C.
5. D. 5. D. 5. B.
6. C.
7. B.
8. D.
9. A.
10. C.

[email protected]

about:blank 13/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition

CHAPTER 2

PROBLEM 2-1 (IAA) - APATHY COMPANY

Requirement 1 - Adjusted Balance Method

Book Balance 65,000 Bank Balance 108,000

Add: Notes Collected by Bank 30,000 Add: Deposit in Transit 80,000
Total 95,000 Total 188,000
Less: Bank Service Charge 2,000 Less: Outstanding Checks
Adjusted Book Balance 93,000 Check No. 102 15,000
Check No. 105 30,000
Check No. 107 50,000 95,000
Adjusted Bank Balance 93,000

Requirement 2 - Adjusting Entries

a.) Cash in Bank 30 000

Notes Receivable 30 000

b.) Bank Service Charge 2 000

Cash in Bank 2 000

[email protected]

about:blank 14/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 2-2 (IAA) - SENSIBLE COMPANY

Requirement 1 - Adjusted Balance Method

Book Balance 110,000 Bank Balance 135,000

Add: Notes Collected by Bank 45,000 Add: Deposit in Transit 60,000
Total 155,000 Bank Error 8,000 68,000
Less: NSF Check 10,000 Total 203,000
Service Charge 5,000 Less: Outstanding Checks
Bank Error 27,000 42,000 Check No. 770 20,000
(52,000-25,000) Check No. 775 30,000
Adjusted Book Balance 113,000 Check No. 777 40,000 90,000
Adjusted Bank Balance 113,000

Requirement 2 - Adjusting Entries

a.) Cash in Bank 45 000

Bank Service Charge 5 000
Notes Receivable 50 000

b.) Accounts Receivable 10 000

Cash in Bank 10 000

c.) Bank Service Charge 5 000

Cash in Bank 5 000

d.) Accounts Payable 27 000

Cash in Bank 27 000

[email protected]

about:blank 15/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 2-3 (IAA) - XANTHOUS COMPANY

Requirement 1 - Adjusted Balance Method (Unadjusted & Adjusted)

Book Balance 2,840,000 Book Balance 3,265,000

Add: Notes Collected by Bank 270,000 Add: Notes Collected by Bank 450,000
Total 3,110,000 Total 3,715,000
Less: Bank Service Charge 5,000 Less: Outstanding Checks
Adjusted Book Balance 3,105,000 Check No. 122 180,000
Check No. 124 120,000
Check No. 116 60,000
Check No. 125 250,000 610,000
Adjusted Bank Balance 3,105,000

Requirement 2 - Adjusting Entries

a.) Cash in Bank 270 000

Bank Service Charge 10 000
Notes Receivable 250 000
Interest Revenue 30 000

b.) Accounts Receivable 5 000

Cash in Bank 5 000

PROBLEM 2-4 (IAA) - CHIVALRY COMPANY

Requirement 1 - Adjusted Balance Method

Book Balance 1,405,000 Bank Balance 5,630,000

Add: Coll. of Note 2,500,000 Add: Deposit in Transit 750,000
Int. on Note 150,000 Total 6,380,000
Book Error CN#175 45,000 2,695,000 Less: Bank Error 1,100,000
Total 4,100,000 Outstanding 1,650,000 2,750,000
Less: NSF Check 220,000 Checks
Service Charge 5,000 Adjusted Bank Balance 3,630,000
Payment for 245,000 470,000
Light and Water
Adjusted Book Balance 3,630,000

[email protected]

about:blank 16/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Requirement 2 - Adjusting Entries

a.) Cash in Bank 2 695 000

Notes Receivable 2 500 000
Interest Income 150 000
Accounts Payable 45 000

b.) Accounts Receivable 220 000

Cash in Bank 220 000

c.) Bank Service Charge 5 000

Cash in Bank 5 000

d.) Light and Water 245 000

Cash in Bank 245 000

PROBLEM 2-5 (IAA) - ZODIAC COMPANY

Requirement 1 - Book to Bank Method

Balance per Book - April 30 1,100,000

Credit Memo for Note Collected 60,000
Outstanding Checks:
Check No. 1331 40,000
Check No. 1332 30,000
Check No. 1334 60,000
Check No. 1335 10,000 140,000
Total 1,300,000
Less: NSF Check 25,000
Bank Service Charge 5,000
Undeposited Collections  270,000 300,000
Balance per Bank - April 30 1,000,000

Requirement 2 - Adjusting Entries

a.) Cash in Bank 60 000

Notes Receivable 60 000

[email protected]

about:blank 17/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

b.) Bank Service Charge 5 000

Accounts Receivable 25 000
Cash in Bank 30 000

Requirement 3 - Adjusted Cash in Bank

Balance per Book - April 30 1,100,000

Credit Memo for Note Collected 60,000
NSF Check ( 25,000)
Bank Service Charge ( 5,000)
Adjusted Cash in Bank 1,130,000

PROBLEM 2-6 (IAA) - RADIANT COMPANY

Requirement 1 - Bank to Book Method

Balance per Bank - January 31 3,500,000

Add: Undeposited Collections 550,000
NSF Check 50,000
Debit Memo for Safety Deposit 5,000
Unrecorded Check 125,000  730,000
Total 4,230,000
Less: Checks Outstanding 650,000
Overstatement of Creditor’s Check 270,000
Understatement of Cust. Check 180,000  1,100,000
Balance per Book - January 31 3,130,000

Requirement 2 - Adjusting Entries

a.) Cash in Bank 450 000

Accounts Payable 270 000
Accounts Receivable 180 000

b.) Accounts Receivable 50 000

Bank Service Charge 5 000
Accounts Payable 125 000
Cash in Bank 180 000

[email protected]

about:blank 18/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Requirement 3 - Adjusted Cash in Bank

Balance per Book - January 31 3,130,000

Overstatement of Creditor’s Check 270,000
Understatement of Customer’s Check 180,000
Total 3,580,000
NSF Check ( 50,000)
Debit Memo for Safety Deposit ( 5,000)
Unrecorded Check ( 125,000)
Adjusted Book Balance 3,400,000

PROBLEM 2-7 (IAA) - RANCOR COMPANY

Requirement 1 - Adjusted Balance Method

Balance per Book 2,700,000 Balance per Bank 4,000,000

Proceeds of Bank Loan 940,000 Deposit in Transit 475,000
Note Collected by Bank 435,000 Bank Error 90,000
Service Charge ( 10,000) Erroneous Bank Charge 150,000
Book Error ( 50,000) Erroneous Debit Memo 200,000
Adjusted Book Balance 4,015,000 Outstanding Checks ( 600,000)
Erroneous Bank Credit ( 300,000)
Adjusted Bank Balance 4,015,000

Requirement 2 - Adjusting Entries

a.) Cash in Bank 940 000

Interest Expense (1,000,000 x 12% x 6/12) x 1/6 10 000
Prepaid Interest Expense (60,000-10,000) 50 000
Loan Payable (940,000/94%) 1 000 000

b.) Cash in Bank 435 000

Bank Service Charge 5 000
Notes Receivable 400 000
Interest Income 40 000

c.) Bank Service Charge 10 000

Accounts Receivable 50 000
Cash in Bank 60 000

[email protected]

about:blank 19/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 2-8 (IAA) - ALPHA COMPANY

Requirement 1 - Adjusted Balance Method

Balance per Book 5,000,000 Balance per Bank 5,500,000

Proceeds of Bank Loan 516,000 Deposit in Transit 450,000
Petty Cash Fund ( 10,000) Erroneous Bank Charge 50,000
Book Error ( 180,000) Outstanding Checks ( 544,000)
Adjusted Book Balance 5,326,000 Erroneous Bank Credit ( 130,000)
Adjusted Bank Balance 5,326,000

Requirement 2 - Adjusting Entries

a.) Cash in Bank 326 000

Interest Expense (600,000 x 14% x 12/12) x 1/12 7 000
Prepaid Interest Expense (84,000-7,000) 77 000
Accounts Payable 180 000
Petty Cash Fund 4 000
Supplies 2 000
Transportation 3 000
Postage 1 000
Loan Payable (516,000/86%) 600 000

PROBLEM 2-9 (IAA) - PATHETIC COMPANY

Requirement 1 - Adjusted Balance Method

Balance per Book 1,300,000 Balance per Bank 1,200,000

Book Error 20,000 Deposit in Transit 275,000
Check No. 555 Stopped 10,000 Outstanding Checks
Service Charge ( 5,000) Check No. 761 55,000
NSF Check ( 85,000) Check No. 762 40,000
Adjusted Book Balance 1,240,000 Check No. 763 25,000
Check No. 764 65,000
Check No. 765 50,000 ( 235000)
Adjusted Bank Balance 1,240,000

[email protected]

about:blank 20/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Requirement 2 - Adjusting Entries

a.) Cash in Bank 30 000

Accounts Payable 20 000
Miscellaneous Income 10 000

b.) Accounts Receivable 85 000

Cash in Bank 85 000

c.) Bank Service Charge 5 000

Cash in Bank 5 000

d.) Receivable from Cashier 40 000

Accounts Receivable 30 000
Sales Discounts 10 000

PROBLEM 2-10 (AICPA) - APEX COMPANY

Balance per Bank 1,805,000

Deposit in Transit 325,000
Total 2,130,000
Outstanding Checks ( 275,000)
Adjusted Bank Balance 1,855,000 → A.

PROBLEM 2-11 (IAA) - CORE COMPANY

Balance per Bank 2,000,000

Deposit in Transit 200,000
Erroneous Bank Credit (  300,000)
Outstanding Checks (500,000 - 100,000) ( 400,000)
Adjusted Bank Balance 1,500,000 → A.

Balance per Book 850,000

NSF Checks (150,000 - 50,00) ( 100,000)
Proceeds of Note Collected 750,000
Adjusted Book Balance 1,500,000

[email protected]

about:blank 21/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 2-12 (AICPA) - CASE COMPANY

Balance per Bank 3,800,000

Deposit in Transit 520,000
Erroneous Bank Credit (  40,000)
Outstanding Checks ( 675,000)
Adjusted Bank Balance 3,605,000

Unadjusted Book Balance (SQUEEZE) 3,660,000 → B.

Bank Service Charge ( 5,000)
NSF Check ( 50,000)
Adjusted Cash in Bank Balance 3,605,000

PROBLEM 2-13 (AICPA) - ABLE COMPANY

February 28 Book Balance 1,460,000

Note Collected by Bank 100,000
Interest Earned on Note 10,000
NSF Check (  130,000)
Bank Service Charges (2,000 + 3,000) ( 5,000)
Adjusted Book Balance 1,435,000

Balance per Bank (SQUEEZE) 1,530,000 → B.

Deposit in Transit 85,000
Bank Error - Erroneous Charge 20,000
Outstanding Checks ( 200,000)
Adjusted Cash in Bank Balance 1,435,000

PROBLEM 2-14 (IAA) - LACONIC COMPANY

Balance per Ledger 920,000

Unrecorded Customer Check 35,000
Bank Service Charge (  15,000)
NSF Check ( 40,000)
Adjusted Book Balance 900,000 → A.

[email protected]

about:blank 22/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 2-15 (IAA) - SAPPHIRE COMPANY

Balance per Bank 2,800,000

Deposit in Transit 350,000
Outstanding Checks (  650,000)
Adjusted Bank Balance 2,500,000

Balance per Ledger (SQUEEZE) 2,520,000 → B.

Interest Income 10,000
Service Charge ( 12,000)
Book Error (64,000 - 46,000) ( 18,000)
Adjusted Book Balance 2,500,000

PROBLEM 2-16 (IAA) - ADVERSARY COMPANY

Balance per Book 8,500,000

Note Collected by Bank 950,000
Book Error (200,000 - 20,000) (  180,000)
NSF Check (  250,000)
Service Charges ( 20,000)
Adjusted Book Balance 9,000,000

Balance per Bank (SQUEEZE) 8,300,000

Deposit in Transit 1,000,000
Outstanding Checks ( 300,000)
Adjusted Cash in Bank Balance 9,000,000 → C.

Cash in Bank 950 000

Note Receivable 950 000

Accounts Payable 180 000

Accounts Receivable 250 000
Service Charge 20 000
Cash in Bank 450 000

Net Debit P500,000 → C.

[email protected]

about:blank 23/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 2-17 (IAA) - TIMEX COMPANY

Balance per Ledger (SQUEEZE) 2,120,000 → A.

Proceeds of Bank Loan 500,000
Proceeds of Customer Note 450,000
DM Service Charge ( 5,000)
Collection Fee by Bank ( 15,000)
NSF Check ( 50,000)
Adjusted Book Balance 3,000,000

Balance per Bank (SQUEEZE) 3,070,000 → B.

Deposit in Transit 450,000
Bank Error 180,000
Outstanding Checks (750,000 - 50,000) (  700,000)
Adjusted Bank Balance 3,000,000

PROBLEM 2-18 (AICPA) - JANE COMPANY

Balance per Ledger (SQUEEZE) 7,070,000 → A.

Note Collected by Bank 1,000,000
Interest on Note 100,000
Book Error 100,000
Service Charge ( 20,000)
NSF Check ( 500,000)
Adjusted Book Balance 7,750,000

Balance per Bank 8,000,000

Deposit in Transit 1,200,000
Bank Error - Erroneous Credit ( 150,000)
Outstanding Checks (1,500,000 - 200,000) ( 1,300,000)
Adjusted Bank Balance 7,750,000 → A.

Currency and Coins on hand 900,000

Petty Cash Fund 50,000
Adjusted Cash in Bank 7,750,000
Total Cash (Current Assets) 8,700,000 → A.

[email protected]

about:blank 24/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 2-19 (AICPA) - PEARL COMPANY

Balance per Bank, July 1 550,000

Deposits 1,800,000
Checks Processed ( 1,400,000)
Service Charge ( 30,000)
NSF Check ( 120,000)
Monthly Loan Payment ( 100,000)
Balance per Bank, July 31 700,000 → A.

Balance per Bank, July 31 700,000

Deposit in Transit 100,000
Bank Error (300,000 - 30,000) 270,000
Outstanding Check ( 150,000)
Adjusted Bank Balance 920,000 → B.

Balance per Ledger (SQUEEZE) 990,000 → C.

Book Error (200,000 - 20,000) 180,000
Service Charge ( 30,000)
NSF Check ( 120,000)
Monthly Loan Payment ( 100,000)
Adjusted Book Balance 920,000

PROBLEM 2-20 (IAA)

1. D.
2. A.
3. C.
4. B.
5. C.
6. A.
7. B.
8. D.
9. C.
10. D.

[email protected]

about:blank 25/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition

CHAPTER 3

PROBLEM 3-1 (ACP) - SASSY COMPANY

Bank Reconciliation - June 30

Book Balance 1,000,000
CM for Note Collected 300,000
NSF Check (  100,000)
Service Charge ( 4,000)
Adjusted Book Balance 1,196,000

Bank Balance 1,650,000

Deposit in Transit 400,000
Outstanding Checks ( 854,000)
Adjusted Bank Balance 1,196,000

Bank Reconciliation - July 31

Book Balance (1,000,000 + 4,000,000 - 3,600,000) 1,400,000
CM for Bank Loan 500,000
Service Charge ( 1,000)
Adjusted Book Balance 1,899,000

Bank Balance (1,650,000 + 3,500,000 - 2,500,000) 2,650,000

Deposit in Transit - ? 1,100,000
Outstanding Checks - ? ( 1,851,000)
Adjusted Bank Balance 1,899,000

Adjusting Entries - July 31

a.) Cash in Bank 500 000

Bank Loan Payable 500 000

b.) Bank Service Charge 1 000

Cash in Bank 1 000

[email protected]

about:blank 26/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Computation of Deposit in Transit - July 31

Deposit in Transit - June 30 400,000
Add: Deposits (July)
Book Debits 4,000,000
Less: June CM for Note Collected (300,000) 3,700,000

Total 4,100,000
Less: Deposits credited by bank (July)
Bank Credits 3,500,000
Less: July CM for Bank Loan (500,000) (3,000,000)
Deposit in Transit - July 31 1,100,000

Computation of Outstanding Checks - July 31

Outstanding Checks - June 30 854,000
Add: Checks drawn by Company (July)
Book Credits 3,600,000
Less: June DM for NSF Check (100,000)
June DM for Service Charge (4,000) 3,496,000
Total 4,350,000
Less: Checks paid by bank (July)
Bank Debits 2,500,000
Less: July DM for Service Charge (1,000) (2,499,000)
Outstanding Checks - July 31 1,851,000

PROBLEM 3-2 (ACP) - BEEHIVE COMPANY

Bank Reconciliation - October 31

Adjusted Book Balance 600,000

Bank Balance 400,000

Deposit in Transit 300,000
Outstanding Checks - ? (100,000)
Adjusted Bank Balance 600,000

Bank Reconciliation - November 30

Book Balance (600,000 + 2,200,000 - 1,800,000) 1,000,000
Book Receipt Error (100,000 - 10,000) 90,000
Book Disbursement Error (300,000 - 30,000) ( 270,000)
Adjusted Book Balance 820,000

[email protected]

about:blank 27/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Bank Balance 930,000

Deposit in Transit - ? 190,000
Bank Disbursement Error 200,000
Outstanding Checks ( 400,000)
Bank Receipt Error ( 100,000)
Adjusted Bank Balance 820,000

Adjusting Entries - November 30

a.) Cash in Bank 90 000

Accounts Receivable 90 000

b.) Accounts Payable 270 000

Cash in Bank 270 000

Computation of Deposit in Transit - November 30

Deposit in Transit - October 31 300,000
Add: Deposits (November)
Book Receipts 2,200,000
Add: Book Error - Collection from Cust. 90,000 2,290,000
Total 2,590,000
Less: Deposits credited by bank (November)
Bank Receipts 2,500,000
Less: Bank Error - Erroneous Credit (100,000) (2,400,000)
Deposit in Transit - July 31 190,000

Computation of Outstanding Checks - October 31 (SQUEEZE)

Outstanding Checks - October 31 100,000
Add: Checks drawn by Company (November)
Book Disbursements 1,800,000
Add: Book Error - Payment of Account 270,000 2,070,000

Total 2,170,000
Less: Checks paid by bank (November)
Bank Disbursements 1,970,000
Less: Bank Error - Erroneous Charge (200,000) (1,770,000)
Outstanding Checks - November 30 400,000

[email protected]

about:blank 28/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 3-3 (IAA) - FABULOUS COMPANY

Bank Reconciliation - July 1

Adjusted Book Balance 1,270,000

Bank Balance (SQUEEZE) 1,720,000

Deposit in Transit - ? 500,000
Outstanding Checks - ? ( 950,000)
Adjusted Bank Balance 1,270,000

Bank Reconciliation - July 31

Book Balance (SQUEEZE) 470,000
Note collected by Bank 1,500,000
Service Charge ( 20,000)
Adjusted Book Balance 1,950,000

Bank Balance 2,700,000

Deposit in Transit 400,000
Outstanding Checks (C#107, C#108) ( 1,150,000)
Adjusted Bank Balance 1,950,000

Adjusting Entries - July 31

a.) Cash in Bank 1 500 000

Note Receivable 1 500 000

b.) Bank Service Charge 20 000

Cash in Bank 20 000

Computation of Deposit in Transit - July 1 (SQUEEZE)

Deposit in Transit - July 1 500,000
Cash Receipts per Book 3,400,000
Deposits Credited by Bank (July 31) (3,500,000)
Deposit in Transit - July 31 400,000

Computation of Outstanding Checks - October 31 (SQUEEZE)

Outstanding Checks - July 1 950,000
Checks drawn by Company ( July 31) 4,200,000
Checks paid by bank ( July 31) (4,000,000)
Outstanding Checks - November 30 1,150,000

[email protected]

about:blank 29/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 3-4 (ACP) - FLAMBOYANT COMPANY

Bank Reconciliation - November 30

Balance per Book (990,000 + 710,000 - 1,200,000) 500,000
Service Charge (  10,000)
NSF Check (  50,000)
Book Error - Erroneously Recorded ( 100,000)
Adjusted Book Balance 340,000

Balance per Bank (1,100,000 + 500,000 - 1,000,000) 600,000

Deposit in Transit - ? 120,000
Outstanding Checks - ? ( 380,000)
Adjusted Bank Balance 340,000

Adjusting Entries - November 30

a.) Bank Service Charge 10 000

Accounts Receivable 50 000
Notes Receivable 100 000
Cash in Bank 160 000

Computation of Deposit in Transit - November 30

Deposit in Transit - October 31 45,000
Add: Deposits (October)
Book Debits 710,000
Unrecorded Collections in October (45,000)
Book Error - Erroneously Recorded (100,000) 565,000
Total 610,000
Less: Deposits credited by bank (October)
Bank Credits 500,000
Bank Error - Correction (10,000) (490,000)
Deposit in Transit - July 31 120,000

[email protected]

about:blank 30/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Computation of Outstanding Checks - November 30

Outstanding Checks - October 31 125,000
Add: Checks drawn by Company (October)
Book Credits 1,200,000
Bank Service Charge ( October) (5,000) 1,195,000
Total 1,320,000
Less: Checks paid by bank (October)
Bank Debits 1,000,000
Bank Service Charge ( November) (10,000)
NSF Check ( November) (50,000) (940,000)
Outstanding Checks - November 30 380,000

PROBLEM 3-5 (ACP) - EFFICIENCY COMPANY

Book to Bank Method:

March 31 Receipts Disbursements April 30
Book Balance 200,000 800,000 720,000 280,000
Note Collected by Bank
March 60,000 (60,000)
April 100,000 100,000
Service Charge
March (8,000) (8,000)
April 2,000 (2,000)
NSF Check
March (20,000) (20,000)
April 30,000 (30,000)
Deposit in Transit
March 31 (80,000) 80,000
April 30 (220,000) (220,000)
Outstanding Checks
March 31 178,000 178,000
April 30 (372,000) 372,000
Bank Balance 330,000 700,000 530,000 500,000

Adjusting Entry:
Bank Service Charge 10 000
Accounts Receivable 50 000
Notes Receivable 100 000
Cash in Bank 160 000

[email protected]

about:blank 31/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 3-6 (IAA) - BIGOTRY COMPANY


Bank to Book Method:
 July 31 Receipts Disbursements August 31
Bank Balance 800,000 5,000,000 3,940,000 1,860,000
Book Error on Collection (180,000) (180,000)
Book Error on Payment (540,000) 540,000
Bank Error on Deposit (200,000) (200,000)
Bank Error on Payment (400,000) 400,000
NSF Check:
July 100,000 100,000
August (50,000) 50,000
Note Collected by Bank:
July (200,000) 200,000
August (300,000) (300,000)
Deposit in Transit:
July 600,000 (600,000)
August 480,000 480,000
Outstanding Checks:
July (100,000) (100,000)
August 650,000 (650,000)
Book Balance 1,200,000 4,400,000 3,600,000 2,000,000

PROBLEM 3-7 (IAA) - BEDLAM COMPANY

November 30 Receipts Disbursements December 31

Book Balance 2,032,000 2,568,000 1,440,000 3,160,000
Bank Service Charge
November 30 (2,000) (2,000)
December 31 4,000 (4,000)
Collection of Note
November 30 (200,000) 200,000
December 31 (300,000) (300,000)
Adjusted Book Balance 1,830,000 2,468,000 1,442,000 2,856,000

Bank Balance 1,890,000 2,090,000 1,080,000 2,900,000

Outstanding Checks
November 30 (180,000) (180,000)
December 31 592,000 (592,000)
Deposit in Transit
November 30 80,000 (80,000)
December 31 498,000 498,000
Bank Error
November 30 40,000 (40,000)
December 31 (50,000) 50,000
Adjusted Bank Balance 1,830,000 2,468,000 1,442,000 2,856,000

[email protected]

about:blank 32/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Adjusting Entry:
Bank Service Charge 4 000
Notes Receivable 300 000
Cash in Bank 304 000

PROBLEM 3-8 (IAA) - JARGON COMPANY

September 30 Receipts Disbursements October 31

Book Balance 1,900,000 1,400,000 2,400,000 900,000
NSF Check:
September 30 (60,000) (60,000)
October 31 40,000 (40,000)
Collection of A/R
September 30 30,000 (30,000)
October 31 50,000 50,000
Book Error
September 30 90,000 (90,000)
October 31 (120,000) 120,000
Adjusted Book Balance 1,960,000 1,330,000 2,260,000 1,030,000

Bank Balance 2,100,000 1,200,000 2,500,000 800,000

Deposit in Transit
September 30 130,000 (130,000)
October 31 260,000 260,000
Outstanding Checks
September 30 (270,000) (270,000)
October 31 30,000 (30,000)
Adjusted Bank Balance 1,960,000 1,330,000 2,260,000 1,030,000

Adjusting Entry:
Accounts Receivable 40 000
Cash in Bank 40 000

Cash in Bank 170 000

Accounts Receivable 50 000
Salaries 120 000

PROBLEM 3-9 (PHILCPA) - HUMANIZER COMPANY

Outstanding Checks, May 31 100,000

Checks recorded by Book in June 2,500,000
Total Checks to be paid by Bank 2,600,000
Checks recorded by Bank in June ( 2,200,000)
Outstanding Checks, June 30 400,000 → B.

[email protected]

about:blank 33/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Deposits in Transit, May 31 300,000

Deposits recorded by Book in June 1,800,000
Total Deposits to be acknowledged by Bank 2,100,000
Deposits recorded by Bank in June ( 1,600,000)
Deposits in Transit, June 30 500,000 → D.

Balance per Bank, June 30 2,400,000

Deposits in Transit, June 30 500,000
Outstanding Checks, June 30 ( 400,000)
Adjusted Bank Balance 2,500,000

Balance per Book, June 30 2,100,000

Note Collected by Bank, June 30 550,000
Service Charges, June 30 ( 50,000)
NSF Checks, June 30 ( 100,000)
Adjusted Book Balance 2,500,000 → A.

PROBLEM 3-10 (AICPA) - COOL COMPANY

Balance per Bank, November 30 3,600,000

December Deposits 5,500,000
Total 9,100,000
December Disbursements ( 4,400,000)
Balance per Bank, December 31 4,700,000
Deposits in Transit, December 31 700,000
Outstanding Checks, December 31 ( 500,000)
Adjusted Bank Balance, December 31 4,900,000 → B.

Balance per Book, December 31 (SQUEEZE) 4,300,000 → D.

Note Collected by Bank, December 31 1,000,000
Service Charges, December 31 ( 50,000)
NSF Checks, December 31 ( 350,000)
Adjusted Book Balance, December 31 4,900,000

December Bank Deposits 5,500,000

Note Collected by Bank, December 31 ( 1,000,000)
Deposits in Transit, November 30 ( 800,000)
Deposits in Transit, December 31 700,000
December Book Receipts 4,400,000 → B.

[email protected]

about:blank 34/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

December Bank Disbursements 4,400,000

NSF Checks, December 31 ( 350,000)
Service Charge, December 31 ( 50,000)
Erroneous Bank Credit, November 30 ( 200,000)
Outstanding Checks, November 30 ( 1,200,000)
Outstanding Checks, December 31 500,000
December Book Receipts 3,100,000 → C.

PROBLEM 3-11 (AICPA) - LOVABLE COMPANY

Balance per Bank, June 30 3,000,000

July Bank Receipts 9,000,000
July Bank Disbursements ( 7,000,000)
Balance per Bank, July 31 5,000,000
Deposits in Transit, July 31 1,000,000
Outstanding Checks, July 31 ( 600,000)
Adjusted Bank Balance, December 31 5,400,000 → D.

Balance per Book, July 31 (SQUEEZE) 5,350,000 → B.

Note Collected by Bank, July 31 200,000
Service Charges, July 31 ( 10,000)
NSF Checks, July 31 ( 140,000)
Adjusted Book Balance, July 31 5,400,000

July Bank Deposits 9,000,000

Note Collected by Bank, July 31 ( 200,000)
Deposits in Transit, June 30 ( 400,000)
Deposits in Transit, July 31 1,000,000
July Cash Receipts per Book 9,400,000 → A.

July Bank Disbursements 7,000,000

NSF Checks, July 31 ( 140,000)
Service Charge, July 31 ( 10,000)
Outstanding Checks, June 30 ( 900,000)
Outstanding Checks, July 31 600,000
July Cash Disbursements per Book 6,550,000 → A.

[email protected]

about:blank 35/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 3-12 (AICPA) - LOQUACIOUS COMPANY

Balance per Bank, June 30 9,800,000

July Bank Receipts 6,500,000
July Bank Disbursements ( 9,000,000)
Balance per Bank, July 31 7,300,000
Deposits in Transit, July 31 600,000
Outstanding Checks, July 31 ( 1,000,000)
Adjusted Bank Balance, December 31 6,900,000 → C.

Balance per Book, June 30 8,800,000

Book Receipts, July 31 6,700,000
Book Disbursements, July 31 ( 8,600,000)
Adjusted Book Balance, July 31 6,900,000 → A.

July Bank Deposits 6,500,000

Deposits in Transit, June 30 ( 400,000)
Deposits in Transit, July 31 600,000
July Cash Receipts per Book 6,700,000 → A.

July Bank Disbursements 9,000,000

Outstanding Checks, June 30 ( 1,400,000)
Outstanding Checks, July 31 1,000,000
July Cash Disbursements per Book 8,600,000 → A.

PROBLEM 3-13 (AICPA) - OPAQUE COMPANY

Balance per Bank, March 31 4,650,000

April Bank Receipts 6,000,000
April Bank Disbursements ( 5,000,000)
Balance per Bank, April 30 5,650,000
Deposits in Transit, April 30 1,500,000
Outstanding Checks, April 30 ( 750,000)
Adjusted Bank Balance, December 31 6,400,000 → D.

Balance per Book, March 31 8,800,000

Book Receipts, July 31 6,500,000
Book Disbursements, July 31 ( 4,500,000)
Adjusted Book Balance, April 30 6,400,000 → A.

[email protected]

about:blank 36/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

April Bank Deposits 6,000,000

Deposits in Transit, March 31 ( 1,000,000)
Deposits in Transit, April 30 1,500,000
April Cash Receipts per Book 6,500,000 → B.

April Bank Disbursements 5,000,000

Outstanding Checks, March 31 ( 1,250,000)
Outstanding Checks, April 30 750,000
April Cash Disbursements per Book 4,500,000 → C.

[email protected]

about:blank 37/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition

CHAPTER 4

PROBLEM 4-1 (IAA) - DREAMER COMPANY

Requirement 1 - Compound Entry

Accounts Receivable 775 000
Notes Receivable 100 000
Installments Receivable 300 000
Advances to Suppliers 150 000
Advances to Subsidiary 400 000
Claim Receivable 15 000
Subscriptions Receivable 300 000
Accrued Interest Receivable 10 000
Customer’s Credit Balances 30 000
Advances from Customers 20 000
Receivables 2 000 000

Requirement 2 - CA (Trade and Other Receivables)

Accounts Receivable 775,000
Allowance for Doubtful Accounts ( 50,000)
Notes Receivable 100,000
Installments Receivable 300,000
Advances to Suppliers 150,000
Claims Receivable 15,000
Subscription Receivable 300,000
Accrued Interest Receivable  10,000
Total Trade and other Receivables 1,600,000

[email protected]

about:blank 38/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 4-2 (IAA) - CREDIBLE COMPANY

Requirement 1 - Computation of Accounts Receivable

Accounts Receivable - January 1 600,000
Charge Sales 6,000,000
Total 6,600,000
Less: Collections from Customers 5,300,000
Write-off 35,000
Merchandise Returns 40,000
Allowance to Customers 25,000 (5,400,000)
Accounts Receivable - December 31 1,200,000

Requirement 2 - Compound Entry

Subscriptions Receivable 150 000
Deposit on Contract 120 000
Claim Receivable 60 000
Advances to Employees 10 000
Advances to Affiliated 100 000
Advances to Supplier 50 000
Accounts Receivable 490 000

Requirement 3 - CA (Trade and Other Receivables)

Accounts Receivable 1,200,000
Claims Receivable 60,000
Advances to Employees 10,000
Advances to Supplier  50,000
Total Trade and other Receivables 1,320,000

[email protected]

about:blank 39/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 4-3 (ACP) - AFFECTIONATE COMPANY

Requirement 1 - FOB Destination, Freight Collect

Accounts Receivable 500 000
Freight Out 10 000
Sales 500 000
Allowance for Freight Charges 10 000

Cash 475 000

Sales Discount 15 000
Allowance for Freight Charges 10 000
Accounts Receivable 500 000

Requirement 2 - FOB Destination, Freight Prepaid

Accounts Receivable 500 000
Freight Out 10 000
Sales 500 000
Cash 10 000

Cash 485 000

Sales Discount 15 000
Accounts Receivable 500 000

Requirement 3 - FOB Shipping Point, Freight Collect

Accounts Receivable 500 000
Sales 500 000

Cash 485 000

Sales Discount 15 000
Accounts Receivable 500 000

[email protected]

about:blank 40/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 4-4 (ACP) - FIANCEE COMPANY

Requirement 1 - Sale of Merchandise on Account, 2/10, n/30

Accounts Receivable 4 000 000
Sales 4 000 000

Requirement 2 - Collection within the Discount Period

Cash 1 470 000
Sales Discount 30 000
Accounts Receivable 1 500 000

Requirement 3 - Collection beyond the Discount Period

Cash 1 000 000
Accounts Receivable 1 000 000

Requirement 4 - Sales Return granted

Sales Return 100 000
Accounts Receivable 100 000

Requirement 5 - Sales Return estimated at the end of the year

Sales Return 20 000
Accounts Receivable 20 000

PROBLEM 4-5 (IAA) - ROMELA COMPANY

Requirement 1 - Sale of Merchandise on Account, 2/10, n/30

Accounts Receivable 4 500 000
Sales Revenue 4 500 000

Requirement 2 - Collection within the Discount Period

Cash 4 410 000
Sales Discount 90 000
Accounts Receivable 4 500 000

Requirement 3 - Collection beyond the Discount Period

Cash 4 500 000
Accounts Receivable 4 500 000

[email protected]

about:blank 41/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 4-6 (IAA) - PRIME COMPANY

Requirement 1 - Sale of Merchandise on Account, 2/10, n/30

Accounts Receivable 2 450 000
Sales Revenue 2 450 000

Requirement 2 - Collection within the Discount Period

Cash 2 450 000
Accounts Receivable 2 450 000

Requirement 3 - Collection beyond the Discount Period

Cash 2 500 000
Accounts Receivable 2 450 000
Sales Discount - Forfeited 50 000

PROBLEM 4-7 (IAA) - RAVEN COMPANY

Requirement 1 - Sale of Merchandise on Account, 2/10, n/30

Accounts Receivable 4 000 000
Sales Revenue 4 000 000

Requirement 2 - Sales Returns

Sales Return 300 000
Accounts Receivable 300 000

Requirement 3 - Year-end Adjusting Entry for Estimated Sales Returns

Sales Return 100 000
Accounts Receivable 100 000

Estimated Sales Returns (10% x 4,000,000) 400,000

Actual Returns 300,000
Balance 100,000

[email protected]

about:blank 42/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 4-8 (AICPA) - VALIANT COMPANY

Trade Accounts Receivable 2,000,000

Allowance for Doubtful Accounts ( 100,000)
Claims Receivable  300,000
Total Trade and other Receivables 2,200,000 → A.

PROBLEM 4-9 (AICPA) - JINX COMPANY

Accounts Receivable, January 1 1,300,000

Credit Sales 5,500,000
Collections from Customers ( 5,000,000)
Sales Returns ( 150,000)
Accounts Written-off ( 100,000)
Accounts Receivable, December 31  1,550,000
Allowance for Doubtful Accounts ( 250,000)
Allowance for Sales Returns ( 50,000)
Net Realizable Value 1,250,000 → B.

PROBLEM 4-10 (AICPA) - RAPTURE COMPANY

Accounts Receivable, January 1 1,300,000

Credit Sales 5,400,000
Collections from Customers ( 4,750,000)
Accounts Written-off ( 125,000)
Accounts Receivable, December 31  1,825,000 → A.

PROBLEM 4-11 (PHILCPA) - HAREM COMPANY

Trade Accounts Receivable 3,500,000

Trade Installments Receivable (850,000 - 50,000) 800,000
Trade Accounts Receivable from Officers 150,000
Accounts on which PDC are held  200,000
Total Trade Accounts Receivable 4,650,000 → A.

[email protected]

about:blank 43/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 4-12 (IAA) - VON COMPANY

Accounts Receivable, January 1 560,000

Charge Sales 5,250,000
Accounts written-off but recovered 10,000
Total 5,820,000
Collections from Customers ( 5,150,000)
Accounts Written-off ( 35,000)
Merchandise Returns ( 25,000)
Allow. to customers for shipping damages ( 15,000)
Accounts Receivable, December 31  595,000 → B.

Accounts Receivable, January 1 530,000

Credit balance of Customer 30,000
Adjusted Accounts Receivable 560,000

Collections from Customers 5,200,000

Overpayment ( 50,000)
Adjusted Collections  5,150,000

Accounts Receivable 595,000

Claim Receivable (400,000 - 50,000) 350,000
Advances to Supplier  300,000
Total Trade and other Receivables 1,245,000 → C.

Subscriptions Receivable (1,000,000 - 200,000) 800,000

Deposit on Contract  500,000
Total long-term other Receivables 1,300,000 → C.

PROBLEM 4-13 (IAA) - WONDER COMPANY

Accounts Receivable, January 1 950,000

Credit Sales 3,800,000
Total 4,750,000
Cash received from Credit Customers ( 3,024,000)
Sales Discounts ( 126,000)
Accounts Receivable Written-off ( 50,000)
Sales Returns and Allowances ( 250,000)
Accounts Receivable, December 31  1,300,000 → A.

[email protected]

about:blank 44/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Total Sales 5,900,000

Cash from Cash Customers - Cash Sales ( 2,100,000)
Credit Sales 3,800,000

Gross A/R Collected (3,024,000/96%) 3,150,000

Sales Discounts (4% x 3,150,000) ( 126,000)
Cash Received from Credit Customers  3,024,000

Gross Amount 100%

Cash Discounts ( 4%)
Net Amount 96%

Allow. for Doubtful Accounts, January 1 100,000

Recovery of Accounts Written-off 80,000
Doubtful Accounts Expense for Cur. Year  70,000
Total 250,000
Accounts Written-off ( 50,000)
Allow. for Doubtful Accounts, December 31 200,000 → B.

PROBLEM 4-14 (IAA) PROBLEM 4-15 (AICPA)

1. D. 1. C.
2. D. 2. A.
3. A. 3. A.
4. C. 4. D.
5. D. 5. B.
6. C.
7. D.
8. B.
9. A.
10. C.

[email protected]

about:blank 45/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

SOLUTION MANUAL
Intermediate Accounting
Valix Peralta Valix
VOLUME ONE - 2020 Edition

CHAPTER 5

PROBLEM 5-1 (IAA) - MARVELOUS COMPANY

Requirement 1
Credit Sales (5,000,000 x 75%) = 3,750,000
Doubtful Accounts (3,750,000 x 2%) = 75,000

Doubtful Accounts 75 000

Allowance for Doubtful Accounts 75 000

Requirement 2
Doubtful Accounts (5,000,000 x 1%) 50 000
Allowance for Doubtful Accounts 50 000

Requirement 3
Required Allowance 80,000
Credit Balance of Allowance (20,000)
Doubtful Accounts Expense 60,000

Doubtful Accounts 60 000

Allowance for Doubtful Accounts 60 000

Requirement 4
Required Allowance (500,000 x 10%) 50,000
Credit Balance of Allowance 20,000
Doubtful Accounts Expense 30,000

Doubtful Accounts 30 000

Allowance for Doubtful Accounts 30 000

[email protected]

about:blank 46/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 5-2 (IAA) - TEMPLATE COMPANY

Requirement 1 - Journal Entries pertaining to Accounts Receivable

1. Accounts Receivable 7 000 000
Sales 7 000 000

2. Cash 2 450 000

Sales Discount 50 000
Accounts Receivable 2 500 000

3. Cash 3 900 000

Accounts Receivable 3 900 000

4. Allowance for Doubtful Accounts 30 000

Accounts Receivable 30 000

5. Allowance for Doubtful Accounts 10 000

Accounts Receivable 10 000

Cash 10 000
Accounts Receivable 10 000

6. Sales Return 70 000

Accounts Receivable 70 000

Requirement 2
Allow. for Doubtful Accounts - 12/31
(1,500,000 x 4%) 60,000
Allowance before Adjustment (20,000)
Doubtful Accounts Expense 40,000
(40,000/1,000,000 = 4% )
(7,000,000 + 1,000,000 - 2,500,000 - 3,900,000 - 30,000 - 70,000 = 1,500,000 )
(40,000 + 10,000 - 30,000 = 20,000 )

Doubtful Accounts 40 000

Allowance for Doubtful Accounts 40 000

Requirement 3
Accounts Receivable - 12/31 1,500,000
Allowance for Doubtful Accounts ( 60,000)
Net Realizable Value 1,440,000

[email protected]

about:blank 47/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 5-3 (IAA) - JOCOSE COMPANY

Requirement 1 - Journal Entries pertaining to Transactions

1. Cash 800 000
Accounts Receivable 7 200 000
Sales ( 800,000/10%) 8 000 000

2. Cash 684 000

Sales Discount (720,000 x 5%) 38 000
Accounts Receivable (7,200,000 x 10%) 720 000

3. Cash 5 940 000

Accounts Receivable 5 940 000

4. Sales Discount 10 000

Allowance for Sales Discount 10 000

5. Sales Return 80 000

Accounts Receivable 80 000

6. Allowance for Doubtful Accounts 60 000

Accounts Receivable 60 000

Accounts Receivable 10 000

Allowance for Doubtful Accounts 10 000

Cash 10 000
Accounts Receivable 10 000

7. Doubtful Accounts 70 000

Allowance for Doubtful Accounts 70 000

Required Allowance - 12/31

(2,400,000 x 5%) 120,000
Allowance before Adjustment (50,000)
Doubtful Accounts Expense 70,000
(100,000/2,000,000 = 5% )
(7,200,000 + 2,000,000 - 720,000 - 5,940,000 - 80,000 - 60,000 = 2,400,000 )
(100,000 + 10,000 - 60,000 = 50,000 )

[email protected]

about:blank 48/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Requirement 2
Accounts Receivable - 12/31 2,400,000
Allowance for Doubtful Accounts ( 120,000)
Allowance for Sales Discount ( 10,000)
Net Realizable Value 2,270,000

PROBLEM 5-4 (IAA) - RELENTLESS COMPANY

Requirement 1 - Journal Entries pertaining to Transactions

1. Accounts Receivable 2 600 000
Sales ( 3,070,000 - 470,000) 2 600 000

2. Cash (2,455,000 - 1,455,000) 1 000 000

Accounts Receivable 1 000 000

3. Cash 1 455 000

Sales Discount (1,455,000 x 3%) 45 000
Accounts Receivable (1,455,000/97%) 1 500 000

4. Allowance for Doubtful Accounts 20 000

Accounts Receivable 20 000

5. Cash 470 000

Sales 470 000

6. Sales Return and Allowances 55 000

Accounts Receivable 55 000

7. Sales Returns and Allowances 10 000

Cash 10 000

8. Accounts Receivable 5 000

Allowance for Doubtful Accounts 5 000

Cash 5 000
Accounts Receivable 5 000

[email protected]

about:blank 49/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Requirement 2 - Adjustment
Doubtful Accounts 50 000
Allowance for Doubtful Accounts 50 000

Credit Sales 2,600,000

Sales Discount ( 45,000)
Sales Return and Allowances ( 55,000)
Net Credit Sales 2,500,000

Doubtful Accounts (2,500,000 x 2%) = 50,000

Requirement 3
Accounts Receivable 625,000
Allowance for Doubtful Accounts ( 60,000)
Net Realizable Value 565,000
(2,600,000 + 600,000 - 1,000,000 - 1,500,000 - 20,000 - 55,000 = 625,000 )
(50,000 + 25,000 + 5,000 - 20,000 = 60,000)

PROBLEM 5-5 (IAA) - NOSTALGIA COMPANY

Requirement 1 - Journal Entries pertaining to Transactions

1. Accounts Receivable 7 935 000
Sales 7 935 000

2. Cash 4 410 000

Sales Discount (4,500,000 x 2%) 90 000
Accounts Receivable (4,410,000/98%) 4 500 000

3. Cash 2 475 000

Sales Discount (2,500,000 x 1%) 25 000
Accounts Receivable (2,475,000/99%) 2 500 000

4. Accounts Receivable 15 000

Allowance for Doubtful Accounts 15 000

Cash 15 000
Accounts Receivable 15 000

5. Cash 1 100 000

Accounts Receivable 1 100 000
(8,000,000 - 4,410,000 - 2,475,000 - 15,000)

[email protected]

about:blank 50/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

6. Allowances for Doubtful Accounts 55 000

Accounts Receivable 55 000

7. Sales Return 30 000

Accounts Receivable 30 000

Requirement 2 - Adjustment
Doubtful Accounts 30 000
Allowance for Doubtful Accounts 30 000

Required Allowance (1,250,000 x 4%) 50,000

Allowance before Adjustment (20,000)
Doubtful Accounts Expense 30,000
(60,000/1,500,000 = 4% )
(7,935,000 + 1,500,000 - 4,500,000 - 2,500,000 + 15,000 - 15,000 - 1,100,000 - 55,000 - 30,000 =  1,250,000 )
(60,000 + 15,000 - 55,000 = 20,000 )

Requirement 3
Accounts Receivable 1,250,000
Allowance for Doubtful Accounts ( 50,000)
Net Realizable Value 1,200,000

PROBLEM 5-6 (PHILCPA) - RAMPANT COMPANY

Percent of Required
Amount Uncollectible Allowance
1. Not yet due 1,700,000 - -
1 – 30 days past due 1,200,000 5% 60,000
31 – 60 days past due 100,000 25% 25,000
61 – 90 days past due 150,000 50% 75,000
Over 90 days past due 1,200,000 100% 120,000
 3,270,000 280,000

2. Allowance – January 1 170,000

Receivables 30,000
Doubtful Accounts Expense (SQUEEZE) 345,000
Total 545,000
Less: Writeoff (235,000 + 30,000) 265,000
Required Allowance – December 31 280,000

3. Doubtful Accounts 345 000

Allowance for Doubtful Accounts 345 000

[email protected]

about:blank 51/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

4. Accounts Receivable 3,270,000

Less: Allowance for Doubtful Accounts  280,000
Net Realizable Value 2,990,000

PROBLEM 5-7 (AICPA) - SAVVY COMPANY

170,000 – 10,000 258,000 – 20,000

Rate in 2019 = ------------------------ = .016 Rate in 2020 = -------------------------- = .017
10,000,000 14,000,000

1. Retained Earnings (.016 x 1,250,000) 20,000

Allowance for Doubtful Accounts 20,000

2. Allowance – January 1 20,000

Recoveries – 2020 10,000
Doubtful Accounts – 2019 (SQUEEZE) 92,000
Total 122,000
Less: Writeoff – 2020  88,000
Allowance – December 31 (.017 x 2,000,000)  34,000

3. Accounts Receivable 2,000,000

Less: Allowance for Doubtful Accounts  34,000
Net Realizable Value 1,966,000

PROBLEM 5-8 (AICPA) - PARAMOUNT COMPANY

1. Allowance – January 1, 2020 500,000

Doubtful accounts recorded (2% x 20,000,000) 400,000
Recovery  50,000
Total 950,000
Less: Writeoff (300,000 + 100,000) 400,000
Allowance balance before adjustment 550,000

2. 5,000,000 x 5% 250,000
2,000,000 x 10% 200,000
1,000,000 x 25% 250,000
500,000 – 100,000 x 75%  300,000
Required Allowance – December 31, 2020 1,000,000

3. Doubtful accounts 450,000

Allowance for doubtful accounts (1,000,000 – 550,000) 450,000

[email protected]

about:blank 52/59
2/3/24, 6:34 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 5-9 (AICPA) - SCION COMPANY

1. Allowance – 1/1/2020 (1% x 2,800,000) 28,000

2. Allowance – 1/1/2020 28,000

Doubtful Accounts recorded in 2020 (1% x 3,000,000) 30,000
Recovery 7,000
Total 65,000
Writeoff (27,000)
Allowance before adjustment 38,000

3. 300,000 x 1% 3,000
80,000 x 5% 4,000
60,000 x 20% 12,000
25,000 x 80% 20,000
Required allowance – 12/31/2020 39,000

4. Doubtful accounts 1,000

Allowance for doubtful accounts (39,000 – 38,000) 1,000

PROBLEM 5-10 (IAA) - GRUESOME COMPANY

Allowance – January 1 200,000

Doubtful Accounts Expense (SQUEEZE) 500,000 → C.
Total 700,000
Less: Writeoff  300,000
Required Allowance – December 31  400,000

PROBLEM 5-11 (AICPA) - TANTRUM COMPANY

1,200,000 x 1% 12,000
900,000 x 2% 18,000
1,000,000 x 6%  60,000
Allowance – December 31  90,000

Allowance – January 1 60,000

Uncollectible Accounts Expense (SQUEEZE) 80,000 → B.
Recovery 20,000
Total 160,000
Less: Writeoff  70,000
Allowance – December 31  90,000

[email protected]

about:blank 53/59
2/3/24, 6:35 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 5-12 (AICPA) - DELTA COMPANY

Available Discount (2,000,000 x 2%) 40,000

Allowance for Sales Discount (40,000 x 50%) 20,000 → A.

1,400,000 x 5% 70,000
400,000 x 10% 40,000
200,000 x 50%  100,000
Allowance for Doubtful Accounts 210,000 → B.

Accounts Receivable 4,000,000

Less: Allowance for Doubtful Accounts 210,000
Allowance for Sales Discounts 20,000
Net Realizable Value 3,770,000 → C.

PROBLEM 5-13 (AICPA) - NAMESAKE COMPANY

Doubtful Accounts Expense (3% x 3,000,000 + 10,000) 100,000 → B.

PROBLEM 5-14 (AICPA) - BESTIAL COMPANY

Doubtful Accounts Expense (2% x 7,000,000) 140,000 → A.

PROBLEM 5-15 (AICPA) - CASTAWAY COMPANY

Allowance – January 1 200,000

Doubtful Accounts Expense (5% x 8,000,000) 400,000
Recovery 50,000
Total 650,000
Less: Writeoff  100,000
Allowance – December 31 550,000 → D.

PROBLEM 5-16 (AICPA) - FATEFUL COMPANY

Allowance – January 1 250,000

Doubtful Accounts Expense (SQUEEZE) 175,000 → D.
Total 425,000
Less: Writeoff  205,000
Allowance – December 31  220,000

[email protected]

about:blank 54/59
2/3/24, 6:35 PM IA VOL 1 Valix Peralta Valix 2020 Edition

PROBLEM 5-17 (AICPA) - COMPREHENSIVE COMPANY

Allowance – January 1 1,000,000

Provisions for Doubtful Accounts (20,000,000 x 2%) 400,000
Recoveries 50,000
Less: Writeoff (200,000 + 100,000)  300,000
Allowance – December 31 before adjustment  1,150,000 → B.

6,000,000 x 10% 600,000

2,000,000 x 20% 400,000
1,500,000 x 30% 450,000
(500,000 - 100,000) x 50%  200,000
Allowance for Doubtful Accounts – December 31 1,650,000 → A.

Allowance – January 1 1,000,000

Recoveries 50,000
Doubtful Accounts Expense (SQUEEZE) 900,000 → C.
Total 1,950,000
Less: Writeoff  300,000
Allowance – December 31  1,650,000

Doubtful Accounts Expense 900,000

Less: Recorded Amount (20,000,000 x 2%) 400,000
Year-end Adjustment to the Allowance Account (Credit) 500,000 → D.

Accounts Receivable – December 31 9,900,000

Less: Allowance for Doubtful Accounts 1,650,000
Net Realizable Value  8,250,000 → B.

PROBLEM 5-18 (PHILCPA) - EASY COMPANY

855,000 – 95,000
Rate in 2020 = ---------------------------- = .02 or 2%
38,000,000

Doubtful Accounts Expense (2% x 7,000,000) 300,000 → B.

Allowance – January 1 80,000

Doubtful Accounts Expense 300,000
Recovery 40,000
Total 420,000
Less: Writeoff  310,000
Allowance – December 31 110,000 → A.

[email protected]

about:blank 55/59
2/3/24, 6:35 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Accounts Receivable – January 1 2,070,000

Credit Sales 15,000,000
Less: Collection from Customers 14,000,000
Writeoff 310,000
Accounts Receivable – December 31 2,760,000

Accounts Receivable 2,760,000

Less: Allowance for Doubtful Accounts 110,000
Net Realizable Value 2,650,000 → A.

PROBLEM 5-19 (AICPA) - FLAPPABLE COMPANY

3,000,000 x 5% 150,000
1,500,000 x 20% 300,000
1,200,000 x 25% 300,000
1,200,000 x 50%  600,000
Allowance for Doubtful Accounts – December 31 1,350,000 → A.

Doubtful Accounts Expense 2017, 2018, 2019 (5% x 23,500,000) 1,175,000

Recoveries 2018, 2019 75,000
Less: Writeoff 2018, 2019  200,000
Allowance – December 31 before adjustment  1,050,000

Allowance – January 1 1,050,000

Recoveries 2020 100,000
Doubtful Accounts Expense (SQUEEZE) 500,000 → A.
Total 1,650,000
Less: Writeoff  300,000
Allowance – December 31  1,350,000

Accounts Receivable 6,900,000

Less: Allowance for Doubtful Accounts 1,350,000
Net Realizable Value 5,550,000 → C.
(3,000,000 + 1,500,000 + 1,200,000 + 1,200,000 = 6,900,000 )

PROBLEM 5-20 (AICPA) - SKY COMPANY

Allowance for Doubtful Accounts – December 31, 2019 15,000

Doubtful Accounts Expense 2020 30,000
Total 45,000
Less: Allowance for Doubtful Accounts – December 31, 2020  10,000
Accounts Written-off – 2020 35,000 → A.

[email protected]

about:blank 56/59
2/3/24, 6:35 PM IA VOL 1 Valix Peralta Valix 2020 Edition

Accounts Receivable – December 31, 2019 800,000

Gross Sales 6,150,000
Total 6,950,000
Less: Accounts Receivable – December 31, 2020 880,000
Accounts Written-off – 2020 35,000
Sales Returns – Actual 15,000
Allowance – December 31 6,020,000 → C.

Allowance for Sales Returns – December 31, 2019 25,000

Estimated Sales Return (SQUEEZE) 10,000 → A.
Total 35,000
Less: Sales Returns – Actual 15,000
Allowance for Sales Returns – December 31, 2020  20,000

Gross Sales 6,150,000

Less: Estimated Sales Returns – 2020 10,000
Net Sales 6,140,000 → B.

PROBLEM 5-21 (AICPA)

1. C.
2. A.
3. A.
4. B.
5. C.
6. D.
7. A.
8. A.
9. D.
10. B.

[email protected]

about:blank 57/59
2/3/24, 6:35 PM IA VOL 1 Valix Peralta Valix 2020 Edition

More from:
Financial
Accounting And…
ACCY 101
Negros Oriental Stat…
95 documents

Go to course

AFAR- Business
Combination (Testbank)
26
Financial
100% (1)
Accounting…

ACCY 101 Financial

Accounting AND…
6
Financial
100% (1)
Accounting…

FAR 8 - Financial
Accounting and…
3
Financial
100% (1)
Accounting…

Earth Life Science ABM

TVL
22
Financial
100% (1)
Accounting…

Recommended for you

about:blank 58/59
2/3/24, 6:35 PM IA VOL 1 Valix Peralta Valix 2020 Edition
361059751-Business-
and-Transfer-Taxation…
48
Accountancy 100% (24)

List of PFRS, PAS , PIC

Titles Compilation
3
Accountancy 100% (12)

UTS Module 1 -
Understanding Self…
25
Accountancy 100% (7)

Intermediate
accounting 3 by millan
16
Accountancy 100% (6)

about:blank 59/59