On Feb 28, a company had a balance in its accounts receivable of Php 3,019,019. Mar 2. Sold merchandise on account, Php 576,000. The cost of the merchandise was Php 420,000. Mar 8. Sold Php 150,000 worth of accounts receivable which had been overdue for 70 days to Metrobank. Metrobank charged a 5% factoring fee. Mar 20. Borrowed Php 500,000 cash from UCPB, pledging Php 650,000 worth of accounts receivable as collateral for the loan. Prepare journal entries to record the above transactions from March. Assume the company uses a perpetual inventory system. Assume also that the company uses Aging of Accounts receivable to estimate its bad debts. The credit balance of Allowance for Bad Debts as of February is 285,000. The company estimates the following uncollectible rates per age: Balance Est. Uncollectible % Account Age Current (not yet due) 1-30 days past due 30-60 days past due 61-90 days past due Over 90 days past due 1,207,607.60 754,754.75 2.00% 3.00% 452,852.85 543,423.42 8.00% 40.00% 60,380.38 80.00% Prepare the Schedule of Aging of Accounts Receivable. What will be the journal entry in Bad Debts expense and Allowance for Bad Debts as of end of March.
On Feb 28, a company had a balance in its accounts receivable of Php 3,019,019. Mar 2. Sold merchandise on account, Php 576,000. The cost of the merchandise was Php 420,000. Mar 8. Sold Php 150,000 worth of accounts receivable which had been overdue for 70 days to Metrobank. Metrobank charged a 5% factoring fee. Mar 20. Borrowed Php 500,000 cash from UCPB, pledging Php 650,000 worth of accounts receivable as collateral for the loan. Prepare journal entries to record the above transactions from March. Assume the company uses a perpetual inventory system. Assume also that the company uses Aging of Accounts receivable to estimate its bad debts. The credit balance of Allowance for Bad Debts as of February is 285,000. The company estimates the following uncollectible rates per age: Balance Est. Uncollectible % Account Age Current (not yet due) 1-30 days past due 30-60 days past due 61-90 days past due Over 90 days past due 1,207,607.60 754,754.75 2.00% 3.00% 452,852.85 543,423.42 8.00% 40.00% 60,380.38 80.00% Prepare the Schedule of Aging of Accounts Receivable. What will be the journal entry in Bad Debts expense and Allowance for Bad Debts as of end of March.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...
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