At December 31, 2020, end of the annual reporting period, the accounts of ABC company showed the following: a. Sales Revenue for 2020, P 180,000 of which one-sixth was on credit b. Allowance for doubtful accounts, balance January 1, 2020, P900 credit c. Account Receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2019), P18,050 d. Uncollectible accounts to be written off, December 31, 2020, P1,050 e. Aging Schedule at December 31, 2020, showing the following breakdown of total accounts receivable: Status Amount Not past Due P10,000 Past Due 1-60 days 4,000 Past Due over 60 days 3,000 Required: 1. Give the 2020 entry to write off the uncollectible accounts. 2. Give the 2020 adjusting entry to record bad debt expense for each of the following independent assumptions concerning bad debt loss rates: a. On total receivables at year-end, 2.5 percent b. On aging schedule: not past due, 0.5 percent; past due 1-60 days, 1 percent; and past due over 60 days, 8 percent 3. Show what would be reported on the 2020 statement of financial position relating to accounts receivable for each assumption. Please provide a clear explanation and clear answer to ALL THE REQUIRED QUESTIONS. I really need a correct answer to this. Thank you.
At December 31, 2020, end of the annual reporting period, the accounts of ABC company showed the following:
a. Sales Revenue for 2020, P 180,000 of which one-sixth was on credit
b. Allowance for doubtful accounts, balance January 1, 2020, P900 credit
c. Account Receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2019), P18,050
d. Uncollectible accounts to be written off, December 31, 2020, P1,050
e. Aging Schedule at December 31, 2020, showing the following breakdown of total
| Status | Amount | |
|---|---|---|
| Not past Due | P10,000 | |
| Past Due 1-60 days | 4,000 | |
| Past Due over 60 days | 3,000 |
Required:
1. Give the 2020 entry to write off the uncollectible accounts.
2. Give the 2020
a. On total receivables at year-end, 2.5 percent
b. On aging schedule: not past due, 0.5 percent; past due 1-60 days, 1 percent; and past due over 60 days, 8 percent
3. Show what would be reported on the 2020
Please provide a clear explanation and clear answer to ALL THE REQUIRED QUESTIONS. I really need a correct answer to this. Thank you.
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