LOANS AND RECIEVABLES Your audit disclosed that on December 2021, the accounts receivable control account of AJ Company had a balance of P 2,865,000. An analysis of the accounts receivable account showed the following : a. Accounts known to be worthless P 37,500 b. Advance payments to creditors on purchase orders 150,000 c. Advances to affiliated companies P 375,000 d. Customer’s accounts reporting credit balances arising from sales return (225,000) e. Interest receivable on bonds 150,000 f. Other trade accounts receivable -unassigned 750,000 g. Subscription receivables due in 30 days 825,000 h. Trade accounts receivable -assigned (Lim Company’s equity in assigned accounts is P150,000) 375,000 i. Trade installment receivable due 1-18 months, including unearned finance charges of P 30,000 330,000 j. Trade receivables from officers due currently 22,500 k. Trade accounts on which post-dated checks are held (no entries were made on receipts of checks) 75,000 TOTAL AMOUNT P 2,865,000 REQUIRED : The trade accounts receivable as at December 31, 2021 is The net current trade and other receivables as at December 31, 2021 is How much of the receivable will be presented as non-current as at December 31, 2021
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
LOANS AND RECIEVABLES
Your audit disclosed that on December 2021, the
|
a. Accounts known to be worthless |
P 37,500 |
|
b. Advance payments to creditors on purchase orders |
150,000 |
|
c. Advances to affiliated companies |
P 375,000 |
|
d. Customer’s accounts reporting credit balances arising from sales return |
(225,000) |
|
e. Interest receivable on bonds |
150,000 |
|
f. Other trade accounts receivable -unassigned |
750,000 |
|
g. Subscription receivables due in 30 days |
825,000 |
|
h. Trade accounts receivable -assigned (Lim Company’s equity in assigned accounts is P150,000) |
375,000 |
|
i. Trade installment receivable due 1-18 months, including unearned finance charges of P 30,000 |
330,000 |
|
j. Trade receivables from officers due currently |
22,500 |
|
k. Trade accounts on which post-dated checks are held (no entries were made on receipts of checks) |
75,000 |
|
TOTAL AMOUNT |
P 2,865,000 |
REQUIRED :
- The trade accounts receivable as at December 31, 2021 is
- The net current trade and other receivables as at December 31, 2021 is
- How much of the receivable will be presented as non-current as at December 31, 2021
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