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Chapter 11 Answers Repport

The document provides details on three problems related to accounting for accounts receivable. Problem 11-5 lists account balances and transactions for Template Company's accounts receivable for 2015. Problem 11-7 lists similar beginning balances and transactions for Relentless Company. Problem 11-20 asks about allowance for sales discounts for Aghast Company. Problem 11-21 provides information on accounts receivable aging and allowance for doubtful accounts for Ludicrous Company. The problems ask for journal entries to be prepared, adjustments to allowance accounts to be calculated, and net realizable value of accounts receivable to be determined.

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5K views12 pages

Chapter 11 Answers Repport

The document provides details on three problems related to accounting for accounts receivable. Problem 11-5 lists account balances and transactions for Template Company's accounts receivable for 2015. Problem 11-7 lists similar beginning balances and transactions for Relentless Company. Problem 11-20 asks about allowance for sales discounts for Aghast Company. Problem 11-21 provides information on accounts receivable aging and allowance for doubtful accounts for Ludicrous Company. The problems ask for journal entries to be prepared, adjustments to allowance accounts to be calculated, and net realizable value of accounts receivable to be determined.

Uploaded by

Judy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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P R O B L E M 11 - 5

On January 1, 2015, Template Company showed the following account balances:


accounts receivable
allowance for doubtful accounts
the following summary transactions occurred during the current year:
1. sales on account, 2/30, n/30
2. collections from customers within the discount period
3. collection from customers beyond the discount period
4. accounts receivable written off as worthless
5. recovery of accounts previously written off not included in the above collections
6. credit memo for sales return
Required:

a. Prepare journal entries pertaining to accounts receivable


b. Prepare the adjustment for doubtful accounts on December 31, 2015 if the entity
uses the percentage of accounts receivable method consistently
c. what is the net realizable value of accounts receivable on Dec 31, 2015
Problem 11-7
Relentless company reported the following balances on January 1, 2015:
Accounts receivable
Allowance for doubtful accounts
The following transactions took place in the current year.
1. sales– cash and credit
2. cash received from credit customers
3. cash received from credit customers who took advantage of the 3/10, n/30 credit
terms (included in No.2
4. accounts receivable written off as worthless
5. cash received from cash customers
6. Credit memo for sales return and allowances issued to credit customers
7. cash refunds to cash customers
8. Recoveries of accounts written off, not included in above collections
Required:

a. Prepare journal entries to record the transactions.


b. Prepare the adjustment for doubtful accounts if the entity
provides for doubtful accounts equal to 2% of net credit
sales
c. Determine the net realizable value of accounts receivable on
December 31, 2015
Problem 11-20
Aghast company sold goods to wholesalers on terms 2/15, net 30. the entity had
no cash sales but 50% of the customers took advantage of the discount. An
analysis of the accounts receivable considered collectible at year end revealed
the following:

0– days
16—30 days
31—60 days
Over 60 days
What amount should be reported as allowance for sales discount?
a. 200,000
b. 100,000
c. 83,000
d. 50,000
Problem 11-21
At year end, ludicrous company reported accounts receivable of P6,000,000 and
allowance for doubtful accounts of P300,000 before year-end adjustment:
Outstanding accounts receivable probability of collection

The accounts which have been outstanding over 75 days and have zero probability of
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