TJC recognizes profit on credit sales on an installment basis. At the end of 20x2, before the accounts are adjusted, the ledger shows the following: Installment receivable, 20x1 P675,000 Installment receivable, 20x2 1,050,000 Deferred gross profit, 20x1 P370,000 Deferred gross profit, 20x2 545,000 Regular sales 3,000,000 Cost of regular sales 1,920,000 Each year the gross profit on installment sales was 8% lower than the regular sales. In 20x2, the gross profit on installment sales was 4% higher than 20x1. Compute: Adjusted deferred gross profit balance (DGP) in 20x2 Total realized gross profit (RGP) in 20x2

TJC recognizes profit on credit sales on an installment basis. At the end of 20x2, before the accounts are adjusted, the ledger shows the following: Installment receivable, 20x1 P675,000 Installment receivable, 20x2 1,050,000 Deferred gross profit, 20x1 P370,000 Deferred gross profit, 20x2 545,000 Regular sales 3,000,000 Cost of regular sales 1,920,000 Each year the gross profit on installment sales was 8% lower than the regular sales. In 20x2, the gross profit on installment sales was 4% higher than 20x1. Compute: Adjusted deferred gross profit balance (DGP) in 20x2 Total realized gross profit (RGP) in 20x2

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...

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Required: Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:Determine the amount to be charged to the uncollectible expense account.Prepare the Allowance for uncollectible account. Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 Journal Entries Date Particulars Debit($) Credit($) 10.1.20 Accounts Receivable 11000 To sales 11000 15.5.20 Allowance for uncollectible accounts(2500+400) 2900 To accounts receivable 2900 4.8.20 Cash(70% of 11000) 7700 Allowance for uncollectible accounts(30% of $11000) 3300 To Accounts Receivable 1100 26.10.20 Accounts Receivable(30% of $400) 120 To allowance for uncollectible accounts 120 26.10.20 Cash 120 To accounts receivable 120…
n the credit account statement below, the values of the annual percentage rate (APR), finance charge, and the new balance must be calculated. PreviousBalance AnnualPercentageRate (APR) MonthlyPeriodicRate(as a %) FinanceCharge(in $) Purchasesand CashAdvances PaymentsandCredits NewBalance(in $) $1,026.61 1.75% $322.20 $300.00 Recall that the annual percentage rate (APR) is tied to the monthly periodic rate by the following formula. monthly periodic rate = APR 12 By solving this equation for the APR, the known value for the monthly periodic rate can be substituted to calculate the APR. APR = monthly periodic rate ✕ 12 The monthly periodic rate is given to be 1.75%. Find the APR. APR = 12 ✕ monthly periodic rate = 12 ✕ ____ % = ____%
GCASH accounts for sales under the installment method. On January 1, 2020 its ledger accounts included the following balances:Installment Receivable, 2018 P 38,500Installment Receivable, 2019 155,000Deferred Gross Profit, 2018 11,550Deferred Gross Profit, 2019 62,000Installment Sales in 2020 were made at 42% gross profit rate. December 31, 2019 account balances before adjustment were as follows:Installment Receivable, 2018 P 0Installment Receivable, 2019 42,000Installment Receivable, 2020 100,500Deferred Gross Profit, 2018 11,550Deferred Gross Profit, 2019 62,000Deferred Gross Profit, 2020 75,810The total realized gross profit on December 31, 2020 is:a. P90,350 c. P98,910b. P97,510 d. P97,350
ii) An analysis of the records shows that trade receivables (accounts receivable) for sales on account are settled according to the following credit pattern, in accordance with the credit terms 5/30, n90:50% in the month of sale 35% in the first month following the sale15% in the second month following the saleiii) Accounts Payable are settled as follows, in accordance with the credit terms – 4/30, n60:70% in the month in which the inventory is purchased 30% in the following monthiv) Computer equipment, which is estimated to cost $350,000, will be acquired in August. The manager has planned with the supplier to make a cash deposit of 50% of the amount upon signing of the agreement in August, with the balance to be settled in four equal monthlyinstalments, starting in September 2022.v) A treasury bond purchased by the company with a face value of $560,000 is expected to mature on July 20, 2022. To meet the financial obligations of the business the management team has decided to…
Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2019, prior to adjustments: Net credit sales for the year Php 680,000 Accounts receivable at December 31, 2019 92,000 Allowance for uncollectible accounts at December 31, 2019 1,850 Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales. REQUIRED: 1. Determine the net balance of AR to be reflected in the balance sheet using net credit sales 2. Assume that Allowance for uncollectible accounts has a debit balance of 1,850 and Aging revealed that 11,040 may proved to be uncollectible, What amount of AR should be reflected in the balance sheet
company reported credit sale of 6252900 and cost of goods sold of 3300000 for the year. the acconunt receivable balance at the beginning and end of the year were 516000 and 581000. receivables turnover ratio is 1. 10.8 2. 6.0 3. 11.4 4. 5.7
The following information has been extracted from the annual reports of Lilydale Ltd and Monbulk Ltd. Lilydale Ltd Monbulk Ltd $2 950 300 17 100 Sales (net credit) revenue for year Allowance for Doubtful Debts, 1/7/18 Allowance for Doubtful Debts, 30/6/19 Accounts receivable (gross) 1/7/18 Accounts receivable (gross) 30/6/19 $2 204 300 27 100 19780 28 100 722 650 368 000 485 800 384 200 (a) Calculate the receivables turnover ratio and average collection period for both companies. Comment on the difference in their collection experiences. (b) Compare the success or otherwise of their cash collection policies, given that the average receivables turnover for the industry in which the companies operated is 7. Credit terms for both companies are 2/10, n/30.
Rosalie Co. uses the gross method to record sales made on credit. On June 10,2018, it made sales of P100,000 with terms 2/10, n/30 to Finley Farms, Inc. On June 19, 2018, Rosalie received payment for % the amount due from Finley Farms. Rosalie's fiscal year end is on June 30,2018. What amount will be reported in the statement of financial position for the accounts receivable due from Finley Farms, Inc. ?
(MODIFIED) Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2020, prior to adjustments: Net credit sales for the year Php 680,000 Accounts receivable at December 31, 2020 92,000 Allowance for uncollectible accounts at December 31, 2020 1,850 Debit Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales. REQUIRED: A. Prepare the adjusting entry to record uncollectible account expense on December 31, 2020. В. Determine the balance in allowance for uncollectible accounts after the adjusting entry is prepared. С. Show how the receivables would be reported on the December 31, 2020 balance sheet for Seed Enterprise.
On December 31, 2025, the “Receivables” account of AA. Company show a debit balance of P5,950,000 Subsidiary details show the following: Accounts receivable, P725,000; Loans receivable, P100,000; Instalments receivable, normally due 1 year to two years, P300,000; Customers’ accounts reporting credit balances arising from sales returns, P30,000; Advance payments for purchase of merchandise, P150,000; Customers’ accounts reporting credit balances arising from advance payments, P20,000; Cash advances to subsidiary, P400,000; Claim from insurance company, P15,000; Subscription receivable due in 60 days, P300,000; Accrued interest receivable, P10,000, Deposit on contract bids, P3,000,000 and Advances to shareholders (collectible in 2024), P1,000,000. How much is the amount to be presented as “loans and receivables” under current assets section of the balance sheet?
At the beginning of the current year, Art Company had a credit balance of P260,000 in the allowance for uncollectible accounts. Based on the past experience, 2% of credit sales would be uncollectible. During the current year, the entity wrote off P325,000 of uncollectible acCounts. Credit sales for the year totaled P9,000,000. What is the adjusted balance of allowance for uncollectible accounts?
A P2,400,000, 6-month, 10% note dated May 1 is received from a customer by an entity and discounted with recourse by First Bank on July 1 at 12%. Based on conditional sale, compute for the following; a. Net proceeds b. Discount period c. Carrying amount of note receivable d. Gain or loss on note receivable discounting e. Journal entry for the conditional sale f. Journal entry, note is paid by maker on maturity g. Journal entry, note is dishonored by maker, entity pays the Bank the maturity value plus protest fee and other bank charges of P5,200.

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Installment receivable, 20x1	P675,000
Installment receivable, 20x2	1,050,000
Deferred gross profit, 20x1	P370,000
Deferred gross profit, 20x2	545,000
Regular sales	3,000,000
Cost of regular sales	1,920,000