ACT1104- Assignment 4 (No Supporting computations, no credit)

Sylvie Corp. has a current account in BDO. Your examination of the company’s cash reveals the following:
a. Balances taken from the company’s general ledger:
Cash balance, November 30, 2023 P637,860
Cash balance, December 31, 2023 576,420
Receipts, December 1 - 31, 2023 306,220
b. Balances taken from the December bank statement:
Bank balance, December 31, 2023 P637,220
Bank balance, November 30, 2023 685,180
Disbursements (debit) 356,080
c. Outstanding checks, November 30, 2023 (P26,140 was paid by the bank in December), P64,140.
d. Deposit in Transit:
November 30, 2023 P15,260
December 31, 2023 16,140
e. Checks written and recorded in December; not included in the checks returned with the December bank
statement, P36,080.
f. A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500.
g. Note collected by the bank in December (company was not informed of the collection), 2,060.
h. A check for 2,020 (payable to supplier) was recorded in the Check register in December as P3,000.
i. A check for P2,240 was charged by the bank as P2,420 in December.
j. Sylvie Co. issued a stop payment order to the bank in December. This pertains to a check written in December
which was not received by the payee. A new check was written and recorded in the Check Register in
December. The old check was written off by a journal entry also in December, P780.
k. Bank service charge, November 30, 2023, P60.
Requirements: Based on the above information, compute the following: (Prepare Proof of cash to answer below
questions)
1. What are the total book disbursements in December?
a. 244,780
b. 367,660
c. 368,540
d. 369,720
2. What are the total bank receipts in December?
a. 260,160
b. 306,060
c. 308,120
d. 309,020
3. What are the total outstanding checks on December 31?
a. 38,000
b. 62,220
c. 74,080
d. 100,220

4. What is the adjusted bank balance on November 30?

a. 634,800
b. 636,600
c. 637,800
d. 685,180

5. What are the adjusted book receipts in December?

a. 303,380
b. 305,440
c. 306,220
d. 307,500
6. What are the adjusted bank disbursements in December?
a. 345,960
b. 359,980
c. 365,840
d. 366,020

7. What is the adjusted book balance on December 31?

a. 576,420
b. 577,400
c. 577,500
d. 579,460

The accountant of Freestyle Company gathered the following data in his attempt to reconcile its records with the data
from the bank statements sent by BPI for the months of June and July:

June July
Cash in bank per ledger Php 4,076,600 Php 6,039,000
Balances per bank statement 4,407,000 6,194,500
Credits to cash in bank 9,239,600
Deposit and credit memos per
bank statement 10,503,000
Outstanding checks 550,000 1,160,000
Deposits in transit 250,000 1,340,000
Erroneous bank credit 40,000
Note collected by bank 34,000
Bank service charge 3,600 4,900

Freestyle Company discounted its own note with BPI in July. The not proceeds of P376,000 was credited by the bank in
July but has not yet been recorded in the books.

Book receipts for July is understated by P9,000. Book disbursements for July is overstated by P5,400.

Loan amortization for July amounting to P90,000 was covered by a check payment but a debit memo for the same
amount was issued by the bank in July.

Requirements: Based on the above information, compute the following: (Prepare proof of cash to answer below
questions)
8. How much is the adjusted July cash receipts?
a. P10,431,000
b. P10,503,000
c. P11,202,000
d. P11,553,000

9. How much is the adjusted July cash disbursements?

a. P8,715,500
b. P9,235,140
c. P9,235,500
d. P9,239,600

10. How much is the correct cash in bank balance on July 31?
a. P6,039,000
b. P6,194,500
c. P6,424,500
d. P9,415,500
Wright Company reported accounts receivable, net of allowance for doubtful accounts of P50,000, amounting to
P450,000 on December 31, 2022. Data for years 2019 to 2022 are provided to you by the company:

Year Credit Sales Write-offs Recoveries

2019 750,000 P7,500 Zero
2020 1,125,000 19,000 1,350
2021 1,475,000 26,000 1,250
2022 1,650,000 32,500 2,400

During the 2023, the company reported sales of P5,000,000 of which 40% is on account, collected P1,500,000 from
customers on account (excluding recoveries), written off uncollectible accounts amounting to P40,000 and recovered
P2,500 of accounts written off as uncollectible in prior years.

Doubtful accounts are provided for as a percentage of credit sales. The company calculated the percentage annually by
using the experience of the three years prior to the current year.

Requirements: Based on the above information, compute the following: (Present supporting computations properly)
11. The percentage to be used in computing the doubtful accounts expense for 2023 is…
a. 1.60%
b. 1.71%
c. 1.76%
d. 1.86%

12. The company should report doubtful accounts expense for 2023 amounting to…
a. 21,700
b. 34,200
c. 51,300
d. 85,500

13. The amount to be reported as accounts receivable on the statement of financial position ( Net Realizable value of
Accounts Receivable) on December 31, 2023, is…
a. 863,300
b. 913,300
c. 925,800
d. 960,000

On January 1, 2022, State Co. sold an equipment to Nation Co. Nation Co issued a 5-year, P500,000, 10% note to
State Co. The note requires the interest to be paid annually every December 31, starting December 31, 2022 until the
maturity of the note on December 31, 2026. The equipment has a cost of P1,000,000 and accumulated depreciation as
of January 1, 2022 of P550,000. The prevailing interest rate for a note of this type is 12%.
Round off PV factors to four decimal places.

Requirements: Based on the above information, compute the following:

14. Prepare amortization table.

15. At what amount shall the note be initially measured on January 1, 2022?
a. 425,550
b. 450,000
c. 463,940
d. 500,000
16. What amount should be reported as gain (loss) on sale of equipment?
a. 13,940 gain
b. 13,940 loss
c. 50,000 gain
d. 50,000 loss

On January 1, 2022, TGIF Company sold equipment with historical cost of P10,000,000 and accumulated depreciation
of P6,000,000 in exchange for a P5,000,000 noninterest-bearing note due December 31, 2024. There was no
established exchange price for the equipment.

The prevailing rate of interest for a note of this type on January 1, 2022 was 10%.

Round off PV factors to four decimal places.

Requirements: Based on the above information, compute the following:

17. Prepare amortization table

18. At what amount shall the note be initially measured on January 1, 2022?
a. 3,756,500
b. 4,000,000
c. 5,000,000
d. 10,000,000

19. What amount should be reported as gain (loss) on sale of equipment?

a. 243,500 gain
b. 243,500 loss
c. 1,000,000 gain
d. 1,000,000 loss

20. What amount should be reported as interest income for 2022?

a. Zero
b. 375,650
c. 413,215
d. 500,000

21. Pau Company showed the following information related to the accounts receivable in order to estimate bad debts
through the use of the aging. The credit of the Company is 30 days on the average.
Age of Receivables Amount
Under 30 days Php 4,000,000
31-60 days 1,500,000
61-90 days 1,000,000
91-120 days 500,000
121-150 days 200,000
151-180 days 100,000
The Company based on experience has the following percent of collectability:
Accounts which are overdue for less than 30 days 97%
Accounts which are overdue 31-60 days 90%
Accounts which are overdue 61-90 days 75%
Accounts which are overdue 91-120 days 55%
Accounts which are overdue 121-150 days 30%
Accounts which are overdue for over 150 days 25%
What is the carrying value of accounts receivable for statement of financial position purposes?
a. Php430,000
b. Php960,000
c. Php6,340,000
d. Php6,870,000

22. Mari Corp. sells to wholesalers on terms of 2/15, n/30. Mari has no cash sales but 50% of Mari’s customers take
advantage of the discount. Mari uses the gross method of recording sales and trade receivables. An analysis of
Mari’s trade receivables balances at December 31, 2023 revealed the following:
Age Amount Collectibility
0-15 days Php 300,000 100%
16-30 days 180,000 95%
31-60 days 15,000 90%
Over 60 days 7,500 Php1,500
Php 502,500
In its December 31, 2023 statement of financial position, what amount should Mari report for allowance for sales
discounts?
a. Php3,000
b. Php4,860
c. Php5,025
d. Php6,000