The beginning balances of the accounts receivable and allowance for bad debts accounts of Goodness Co. are P3,000,000 and P30,000, respectively. On your audit of the financial statements for the period ended and as of December 31, 2016, you have gathered the following information: Credit sales; terms 2/10, 1/15, n/30 10,000,000 Total Collections 7,430,000 Accounts written-off 20,000 Recoveries 5,000 Sales returns 15,000 Additional information: 50% of the credit sales were collected within the 10-day discount period and 20% were collected within the 15-day discount period Recoveries were immediately collected upon setting back the receivable The entity follows the percentage of accounts receivable to determine the balance of allowance for bad debt Requirement What is the carrying value of accounts receivable as of December 31, 2016?
The beginning balances of the accounts receivable and allowance for bad debts accounts of Goodness Co. are P3,000,000 and P30,000, respectively. On your audit of the financial statements for the period ended and as of December 31, 2016, you have gathered the following information: Credit sales; terms 2/10, 1/15, n/30 10,000,000 Total Collections 7,430,000 Accounts written-off 20,000 Recoveries 5,000 Sales returns 15,000 Additional information: 50% of the credit sales were collected within the 10-day discount period and 20% were collected within the 15-day discount period Recoveries were immediately collected upon setting back the receivable The entity follows the percentage of accounts receivable to determine the balance of allowance for bad debt Requirement What is the carrying value of accounts receivable as of December 31, 2016?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The beginning balances of the accounts receivable and allowance for bad debts accounts of Goodness Co. are P3,000,000 and P30,000, respectively. On your audit of the financial statements for the period ended and as of December 31, 2016, you have gathered the following information:
| Credit sales; terms 2/10, 1/15, n/30 | 10,000,000 |
| Total Collections | 7,430,000 |
| Accounts written-off | 20,000 |
| Recoveries | 5,000 |
| Sales returns | 15,000 |
Additional information:
- 50% of the credit sales were collected within the 10-day discount period and 20% were collected within the 15-day discount period
- Recoveries were immediately collected upon setting back the receivable
- The entity follows the percentage of accounts receivable to determine the balance of allowance for bad debt
RequirementWhat is the carrying value of accounts receivable as of December 31, 2016?
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