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Assignment 2.2

The document provides financial information for V Company including accounts receivable balances, sales, collections, write-offs, and recovered accounts. It then asks 4 questions: 1) Calculate net realizable value of accounts receivable if bad debt is 2% of sales, 2) Journal entries if bad debt is 2% of sales, 3) Calculate net realizable value if bad debt is 2% of ending receivables, 4) Journal entries if bad debt is 2% of ending receivables.

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GLEN JORDAN ANTONIO
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40 views

Assignment 2.2

The document provides financial information for V Company including accounts receivable balances, sales, collections, write-offs, and recovered accounts. It then asks 4 questions: 1) Calculate net realizable value of accounts receivable if bad debt is 2% of sales, 2) Journal entries if bad debt is 2% of sales, 3) Calculate net realizable value if bad debt is 2% of ending receivables, 4) Journal entries if bad debt is 2% of ending receivables.

Uploaded by

GLEN JORDAN ANTONIO
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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The related data of V Company:

Accounts receivable, beginning 395,200


Allowance for bad debts, beginning 8,500
Sales for the year 5,000,000
Collection(except recovered account) 4,680,000
Accounts written-off 25,000
Recovered accounts 10,000

Question:
1. If the Allowance for doubtful accounts is 2% of sales, how much is the net realizable value of the Accounts receiv

Solution:
Accounts receivable, beginning 395,200
Sales for the period 5,000,000
Less: Collection for the period 4,680,000
Accounts receivable, ending 715,200
% of Bad debts 2%
Allowance for bad debts, ending 14304
Less: Allowance for bad debts, beginning 8500
Bad debt expense 5804

T accounts:
Account receivable
Beginning balance 395,200 Collection
Net sales 5,000,000 Written-off
Accounts Recovered 10,000 Acconts Recovered
5,405,200 Ending balance

Allowance for bad debts


Accounts written off 25,000 Beginning balance
Ending balance 93,500 Bad debts for the period
118,500 Accounts recovered

Accounts Receivable 690,200


Less: Allowance for bad debts 93,500
Net Realizable Value 596,700

2. If the Allowance for doubtful accounts is 2% of sales, what are the related journal entries?

Particular
Accounts receivables
Sales
To record sales

Bad debts expense


Allowance for bad debts
To record allowance for bad debts

Allowance for bad debts


Accounts receivable
To record accunts collected written off

Cash
Allowance for bad debts
To record accounts collected from previous write-off.

3. If the Allowance for doubtful accounts is 2% of the Accounts receivable ending balance, how much is the net real

Solution:
Accounts receivable, beginning 395,200
Sales for the period 5,000,000
Less: Collection for the period 4,680,000
Accounts written off 25,000
Add: Accounts recovered 0
Accont receivable, ending 690,200
% of bad debts 2%
Allowance for bad debts, beginning 13804

T accounts:
Account receivable
Beginning balance 395,200 Collection
Net sales 5,000,000 Written-off
Accounts Recovered 10,000 Acconts Recovered
5,405,200 Ending balance

Allowance for bad debts


Accounts written off 25,000 Beginning balance
Ending balance 13,804 Bad debts for the period
38,804 Accounts recovered

Accounts Receivable 690,200


Less: Allowance for bad debts 13,804
Net Realizable Value 676,396
4. If the Allowance for doubtful accounts is 2% of the Accounts receivable ending balance, what are the related jour

Particular Debit
Accounts receivable 5,000,000.00
Sales
To record sales

Cash 4,680,000.00
Accounts receivable
To record collection

Allowance for bad debts 25,000.00


Accounts receivable
To record bad debts

Accounts receivable 10,000.00


Allowance for bad debts

Cash 10,000.00
Accounts receivable
To record recovered accounts

Bad debts expense 13,804.00


Allowance for bad debts
To record bad debts
net realizable value of the Accounts receivable?

5,000,000
Sales during the year 2%
% of Bad debts 100,000
Bad debts for the period

4,680,000
25,000
10,000
690,200
5,405,200

8,500
100,000
10,000
118,500

ted journal entries?

Debit Credit
5,000,000.00
5,000,000.00

100,000.00
100,000.00

25,000.00
25,000.00

10,000.00
10,000.00
us write-off.

e ending balance, how much is the net realizable value of the Accounts receivable?

4,680,000
25,000
10,000
690,200
5,405,200

8,500
20,304
10,000
38,804
e ending balance, what are the related journal entries?

Credit

5,000,000.00

4,680,000.00

25,000.00

10,000.00

10,000.00

13,804.00

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