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Acctg. For RECEIVABLES - Docx 1

The document outlines various accounting scenarios involving accounts receivable, bad debts, and notes receivable for different companies. It includes calculations for cash collections, bad debts expense, allowance for doubtful accounts, and impairment losses based on provided financial data. The document presents multiple-choice questions related to these accounting principles and calculations.

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8 views3 pages

Acctg. For RECEIVABLES - Docx 1

The document outlines various accounting scenarios involving accounts receivable, bad debts, and notes receivable for different companies. It includes calculations for cash collections, bad debts expense, allowance for doubtful accounts, and impairment losses based on provided financial data. The document presents multiple-choice questions related to these accounting principles and calculations.

Uploaded by

kuromiya826
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Montion, Earl Lance D.

Assignment#6
Intermediate Accounting 1 April 11, 2025

6. On January 1, 2022, Matiyaga Company has Accounts Receivable of P360,000 and


Allowance for bad debts of P12,000. Sales (all on account) during 2022 amounted to
P1,800,000. During the year 2022, accounts of P7,500 were written off. Analysis of
Matiyaga’s accounts receivable at December 31, 2022, revealed the following:

Age Amount Estimated.Uncollectible


0-60 days P 89,000 1%
61-120 days 90,000 3%
Over 120 days 100,000 10%
​ ​ ​ ​ ​ 279,000
​ There are no other transactions affecting accounts receivable. How much cash is collected
from customers during 2022?

a. 1,837,500 b. P1,873,500 c. P1,845,000 d. P1,485,000

7. Using the data for no. 6, How much bad debts expense was reported by Matiyaga FY
2022?
a. P9,090 b. P13,550 c. P9,450 d. P4,000

8.​ McGlone Corporation had a 1/1/22 balance in the Allowance for Doubtful Accounts of
P15,000. During 2022, it wrote off P10,800 of accounts and collected P3,150 on
accounts previously written off. The balance in Accounts Receivable was P300,000 at
1/1 and P360,000 at 12/31. At 12/31/22, McGlone estimates that 5% of accounts
receivable will prove to be uncollectible. What should McGlone report as its Allowance
for Doubtful Accounts at 12/31/22?
a.​ P7,200
b.​ P7,350
c.​ P10,350
d.​ P18,000

9. ​ Sun Inc. factors P2,000,000 of its accounts receivables without guarantee (recourse)
for a finance charge of 5%. The finance company retains an amount equal to 10% of the
accounts receivable for possible adjustments. What would be recorded by Sun as a gain
(loss) on the transfer of receivables?
a.​ Loss of P100,000
b.​ Gain of P100,000
c.​ Loss of P300,000
d. ​ gain of P300,000

10.​ Maxwell Corporation factored, with guarantee (recourse), P100,000 of accounts


receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to
cover sales discounts, sales returns, and sales allowances. What amount of cash would
Maxwell receive on the sale of receivables?
a.​ P97,000
b.​ P95,000
c.​ P92,000
d.​ P100,000

11. Geary Co. assigned P400,000 of accounts receivable to Kwik Finance Co. as security for
a loan of P335,000. Kwik charged a 2% commission on the amount of the loan; the
interest rate on the note was 10%. During the first month, Geary collected P110,000 on
assigned accounts after deducting P380 of discounts. Geary accepted returns worth
P1,350 and wrote off assigned accounts totaling P2,980.
The amount of cash Geary received from Kwik at the time of the transfer was
a.​ P301,500. ​ ​
b.​ P327,000.
c.​ P328,300.
d.​ P335,000.
12. On March 19, a note receivable with a face value of P50,000 was discounted with JiMin
Bank at a discount rate of 10%. The P50,000 note was dated Feb. 15, 2021 and is due on
June 15, 2021. (use 360 days). How much is the proceeds? P328,300
The next four questions are based on the following information:

On January 1, 2019, Rose company received from a customer non-interest-bearing notes


receivable for P400,000, due December 31, 2021. The prevailing rate of interest for a note
of this type at this date is 10%. The present value of 1 at 10% for three periods is 0.75

13. How much is the interest income of Rose Company FY 2019? P30,000
14. What is the carrying value of the note receivable at Dec. 31, 2019? P330,000
15. How much is the interest income of Rose Company FY 2020? P33,000
16. What is the carrying value of the note receivable at Dec. 31, 2020? P363,000

The next questions are based from the following information:


On January 1, 2021, Tom sold equipment to Jerry. Tom received P 200,000 as down payment
and received a non-interest-bearing note for P600,000 payable in five equal annual installments
of P120,000 with the first payment due on December 31,2021. The prevailing rate of interest for
this type of note is 12%. The present value (PV) and future value (FV) factors for 5 periods at
12% are:
PV of P1 – 0.57 PV of an annuity of P1- 3.60
FPV of P1 – 1.76 FV of an annuity of P1- 6.35

17. What is the interest revenue for year 2021? P51,840


18. What is the interest revenue for year 2022? P43,660.80
19. What is the amortized cost of the note receivable at Dec. 31, 2021? P363,840

20. On July 1, 2021, West Co. received a P400,000 non-interest-bearing note due on July 1,
2023. The prevailing rate of interest for a note of this type at this date was 10%. The
present value of P1 at 10% for three periods is 0.75. What amount of interest revenue
should be included in West’s 2021 income statement? P15,000
The next two questions are based from the ff. data

On Dec. 31, 2019, Lemon Corporation has a 10% notes receivable of P5 million from Apple
Company, with accrued interest of P500,000 on this date. Because of financial distress
being suffered by Apple, Lemon agreed to restructure the terms of the loan as follows:

●​ Reduction of principal to P4,000,000

●​ Reduction of interest to 8% payable annually beginning Dec. 31, 2020

●​ Accrued interest on Dec. 31, 2019 is condoned

●​ Principal payment was reset to Dec. 31, 2021

round off present value factor to 2 decimal places.

21. How much impairment loss was reported by Lemon company on Dec. 31,2019?
P1,623,200
22. At what amount should the restructured notes receivable be reported on Dec. 31, 2019?
P3,876,800

23. White company has a 10% notes receivable of P500,000 with accrued interest of P50,000
from Blue company as of December 31, 2019. Blue company is suffering financial difficulty
making it unable to pay its liability with White company. Thus, both parties have agreed to
restructure the debt terms with the following modifications:
●​ Extend the payment of the principal for two years.
●​ Forgive the accrued interest on December 31, 2019.

●​ Reduce the interest rate to 8%, payable annually.

The present value factors are: .8265 and 1.7355


How much impairment loss should White company recognize on December 31, 2019?
P67,330

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