Question

IMPORTANT:

• Always put comma to separate figures.
• Wrong spelling wrong.
• Unnecessary spaces will be marked as incorrect (e.g. There are two spaces between the words accounts and receivables: Accounts Receivable)

CHART OF ACCOUNTS:

• Cash
• Accounts Receivable
• Accounts Receivable (Credit)
• Due from Factor
• Subscription Receivable
• Refundable Contract Deposit
• Claims Receivable
• Advances to Employees
• Advances to Affiliates
• Notes Receivable Discounted
• Unearned Sales Revenue
• Sales Revenue
• Unearned Interest Income
• Interest Income
• Loss on Discounting of Notes Receivable
• Loss on Factoring
• Allowance for Doubtful Accounts
• Allowance for Sales Allowances
• Allowance for Sales Discount
• Allowance for Sales Returns

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Question 1-A

On July 1, 2020, Bookshelf Co. sold goods in exchange for a P200,000 8-month noninterest-bearing note receivable. At the time of the sale, the note's market rate of interest was 12%.

What amount did Lee receive when it discounted the note at 10% on September 1, 2020?

Question 1-B

On December 31, 2020 the accounts receivable control account of Ever Co. had a balance of P191,000.  An analysis of the accounts receivable account showed the following:

Accounts known to be worthless	P     2,500
Advance payments to creditors on purchase orders	10,000
Advances to affiliated companies	25,000
Customers’ accounts reporting credit balance arising from sales return	(15,000)
Interest receivable on bonds	10,000
Other trade accounts receivable – unassigned	50,000
Subscriptions receivable for common stock due in 30 days	55,000
Trade accounts receivable – assigned (Finance company’s equity in assigned accounts is P10,000)	25,000
Trade installment receivable due 1 – 18 months, (including unearned     finance charges, P2,000)	22,000
Trade receivables from officers, due currently	1,500
Trade accounts on which post-dated checks are held (no entries were made on receipts of checks)	5,000
Total	P 191,000

What is the correct balance of trade accounts receivable of Ever Co. on December 31, 2020?

Answer 1

BALANCE OF TRADE ACCOUNTS RECIEVABLES IS 166500