Items 21 to 27 are based on the following information: The balance sheet for the Litex Corporation on December 31, 2004, includes the following receivables balances: Notes Receivable Less notes discounted Accounts Receivable Less allowance for doubtful accounts Interest Receivable P365,000 155,000 856,000 41,500 P210,000 814,500 5,250 Transactions during 2005 included the following: a. Sales on account were P7,670,000. b. Cash collected on accounts totaled P5,765,000, which included accounts of P930,000 on which cash discounts of 2% were allowed. c. Notes received in settlement of accounts totaled P825,000 d. Notes receivable discounted as of December 31, 2004, were paid at maturity with the exception of one P30,000 note on which the company had to pay the bank P30,900, which included interest and protest fees. It is expected that recovery will be made on this note early 2006. e. Customer's notes of P600,000 were discounted with recourse during the year, proceeds from their transfer being P585,000. Of this total, P480,000 matured during the year without notice of protest. f. Customer's accounts of P87,200 were written off during the year as worthless. & Recoveries of doubtful accounts written off in prior years were P20,200. h. Notes receivable collected during the year totaled P270,000 and interest collected was P24,500. i. On December 31, accrued interest on notes receivable was P6,300. j. Uncollectible accounts are estimated to be 5% of the December 31, 2005 Accounts Receivable balance. k. Cash of P350,000 was borrowed from the bank, accounts receivable of P400,000 being pledged on the loan. Collections of P195,000 had been made on these receivables (included in the total given in transaction (b) and this amount was applied on December 31, 2005, to payment of accrued interest on the loan of P6,000 and the balance to partial payment of the loan. Determine the adjusted balances of the following accounts as of December 31, 2005:
Items 21 to 27 are based on the following information: The balance sheet for the Litex Corporation on December 31, 2004, includes the following receivables balances: Notes Receivable Less notes discounted Accounts Receivable Less allowance for doubtful accounts Interest Receivable P365,000 155,000 856,000 41,500 P210,000 814,500 5,250 Transactions during 2005 included the following: a. Sales on account were P7,670,000. b. Cash collected on accounts totaled P5,765,000, which included accounts of P930,000 on which cash discounts of 2% were allowed. c. Notes received in settlement of accounts totaled P825,000 d. Notes receivable discounted as of December 31, 2004, were paid at maturity with the exception of one P30,000 note on which the company had to pay the bank P30,900, which included interest and protest fees. It is expected that recovery will be made on this note early 2006. e. Customer's notes of P600,000 were discounted with recourse during the year, proceeds from their transfer being P585,000. Of this total, P480,000 matured during the year without notice of protest. f. Customer's accounts of P87,200 were written off during the year as worthless. & Recoveries of doubtful accounts written off in prior years were P20,200. h. Notes receivable collected during the year totaled P270,000 and interest collected was P24,500. i. On December 31, accrued interest on notes receivable was P6,300. j. Uncollectible accounts are estimated to be 5% of the December 31, 2005 Accounts Receivable balance. k. Cash of P350,000 was borrowed from the bank, accounts receivable of P400,000 being pledged on the loan. Collections of P195,000 had been made on these receivables (included in the total given in transaction (b) and this amount was applied on December 31, 2005, to payment of accrued interest on the loan of P6,000 and the balance to partial payment of the loan. Determine the adjusted balances of the following accounts as of December 31, 2005:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Please answer items 24-27 correctly and provide computation. Thank youu:)
Transcribed Image Text:Items 21 to 27 are based on the following information:
The balance sheet for the Litex Corporation on December 31, 2004, includes the following receivables
balances:
Notes Receivable
P365,000
155,000
Less notes discounted
P210,000
Accounts Receivable
856,000
Less allowance for doubtful accounts
41,500
814,500
Interest Receivable
5,250
Transactions during 2005 included the following:
a. Sales on account were P7,670,000.
b. Cash collected on accounts totaled P5,765,000, which included accounts of P930,000 on which
cash discounts of 2% were allowed.
c. Notes received in settlement of accounts totaled P825,000
d. Notes receivable discounted as of December 31, 2004, were paid at maturity with the exception
of one P30,000 note on which the company had to pay the bank P30,900, which included
interest and protest fees. It is expected that recovery will be made on this note early 2006.
e. Customer's notes of P600,000 were discounted with recourse during the year, proceeds from
their transfer being P585,000. Of this total, P480,000 matured during the year without notice of
protest.
f. Customer's accounts of P87,200 were written off during the year as worthless.
g. Recoveries of doubtful accounts written off in prior years were P20,200.
h. Notes receivable collected during the year totaled P270,000 and interest collected was P24,500.
On December 31, accrued interest on notes receivable was P6,300.
j. Uncollectible accounts are estimated to be 5% of the December 31, 2005 Accounts Receivable
i.
balance.
k. Cash of P350,000 was borrowed from the bank, accounts receivable of P400,000 being pledged
on the loan. Collections of P195,000 had been made on these receivables (included in the total
given in transaction (b) and this amount was applied on December 31, 2005, to payment of
accrued interest on the loan of P6,000 and the balance to partial payment of the loan.
Determine the adjusted balances of the following accounts as of December 31, 2005:
Transcribed Image Text:24. Accounts Receivable
a. P1,861,100
b.
P1,830,200 c.
P1,860,720
d. P1,461,100
25. Allowance for Doubtful Accounts
a. P93,055
b. P188,555
C.
P93,036
d.
P67,536
26. Bank Loan or Notes Payable - Bank
a. P350,000
b. P155,000
C.
P161,000
d.
P211,000
27. Doubtful Accounts Expense for the year ended December 31, 2005
b. Р118,555
a. P93,055
C.
P93,036
d.
P67,536
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