In connection with your examination of the financial statements of Ringo, Inc. for the year ended December 31, 2020, you were able to obtain certain information during your audit of the accounts receivable and related accounts. The December 31, 2020 balance in the Accounts Receivable control account is P837,900. An aging schedule of the accounts receivable as of December 31, 2020 is presented below: Age Net Debit Balance Percentage to be applied after corrections have been made 60 days & under P387,800 1 percent 61 to 90 days 307,100 2 percent 91 to 120 days 89,800 5 percent Over 120 days 53,200 Definitely uncollectible, P9,000; the remainder is estimated to be 25% uncollectible. P837,900 The Allowance for Doubtful Accounts schedule is presented below: Debit Credit Balance January 1, 2020 P19,700 November 30, 2020 P6,100 13,600 December 31, 2020 (P837,900 x 5%) P41,895 P55,495 Entries made in the Doubtful Accounts Expense account were: A debit on December 31 for the amount of the credit to the Allowance for Doubtful Accounts. A credit for P6,100 on November 30, 2020, and a debit to Allowance for Doubtful Accounts because of a bankruptcy. The related sales took place on October 1, 2020 There is a credit balance in one account receivable (61 to 90 days) of P11,000; it represents an advance on a sales contract. Questions: 1. How much is the net adjustment to the Doubtful Accounts expense account? Provide (-) sign if credit adjustment. - need answer and solution for this one please, thank you 2. How much is the adjusted balance of the Allowance for Doubtful Accounts as of December 31, 2020? 3. How much is the Doubtful Accounts expense for the year 2020? 4. How much is the adjusted balance of Accounts Receivable as of December 31, 2020?
In connection with your examination of the financial statements of Ringo, Inc. for the year ended December 31, 2020, you were able to obtain certain information during your audit of the
The December 31, 2020 balance in the Accounts Receivable control account is P837,900.
An aging schedule of the accounts receivable as of December 31, 2020 is presented below:
| Age | Net Debit Balance |
Percentage to be applied after corrections have been made |
| 60 days & under |
P387,800 |
1 percent |
| 61 to 90 days |
307,100 |
2 percent |
| 91 to 120 days |
89,800 |
5 percent |
| Over 120 days |
53,200 |
Definitely uncollectible, P9,000; the remainder is estimated to be 25% uncollectible.
|
|
P837,900 |
- The Allowance for Doubtful Accounts schedule is presented below:
Debit Credit Balance
January 1, 2020 P19,700
November 30, 2020 P6,100 13,600
December 31, 2020 (P837,900 x 5%) P41,895 P55,495
- Entries made in the Doubtful Accounts Expense account were:
-
A debit on December 31 for the amount of the credit to the Allowance for Doubtful Accounts.
-
A credit for P6,100 on November 30, 2020, and a debit to Allowance for Doubtful Accounts because of a bankruptcy. The related sales took place on October 1, 2020
There is a credit balance in one account receivable (61 to 90 days) of P11,000; it represents an advance on a sales contract.
Questions:
1. How much is the net adjustment to the Doubtful Accounts expense account? Provide (-) sign if credit adjustment. - need answer and solution for this one please, thank you
2. How much is the adjusted balance of the Allowance for Doubtful Accounts as of December 31, 2020?
3. How much is the Doubtful Accounts expense for the year 2020?
4. How much is the adjusted balance of Accounts Receivable as of December 31, 2020?
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