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3. The following data were taken from the records of Millet Corporation for the
year ended December 31, 2018:
Sales on account 7,200,000
Accounts receivables written off 50,000
Notes receivable to settle accounts 800,000
Purchases on account 7,800,000
Payments to creditors 6,400,000
Purchase discounts 520,000
Sales returns 30,000
Collections received to settle accounts 4,900,000
Notes given to settle accounts 500,000
Purchase returns 140,000
Payments of notes 200,000
Discounts taken by customers 80,000
Collection on notes receivable 360,000
What is the carrying value of the accounts receivable on December 31,
2018?
4. On May 9, 2018, Paul Corp. sold merchandise with a list price of P 150,000 to
Camry on account. Paul allowed trade discounts of 30% and 20%. Credit
terms were 2/15, n/40 and the sale was made FOB shipping point. Paul
prepaid P 6,000 of delivery cost for Camry as an accommodation. What
amount should Camry remit to Paul as full payment on May 24, 2018?
5. On June 1, 2018. Thomas Corp. sold merchandise with a list price of P 300,000
to Peter Co. on account. Peter was given the following trade discounts of
30% and 20%. Credit terms were 2/15, n/40 and the sale was made FOB
destination. On June 10, 2018, when the merchandise were delivered. Peter
Co. paid P 5,000 of delivery costs for Thomas as an accommodation. What
amount should Peter Co. remit to Thomas Co. as full payment on June 4,
2018?
7. Bake Co. has the following account balances at December 31, 2018:
Accounts receivable 900,000
Allowance for doubtful accounts (before any
provision for 2018 doubtful accounts expense) 16,000
Credit sales for 2018 1,750,000
Bake is considering the following methods of estimating doubtful accounts
expense for 2018:
Based on credit sales of 2%
Based on accounts receivable at 5%
What amount should Bake charge to doubtful accounts expense under
each method?
9. Pearl Co. began operations on January 1, 2017. On December 31, 2017, Pearl
provided for uncollectible accounts based on 1% of annual credit sales. On
January 1, 2018, Pearl changed its method of determining its allowance for
uncollectible accounts by applying certain percentage to the accounts
receivable aging as follows:
Days past invoice date % deemed to be uncollectible
0 – 30 1%
31 – 90 5%
91 – 180 20%
Over 180 80%
In addition, Pear wrote off all accounts receivable that were over 1 year old.
The following additional information relate to the years ended December 31,
2017 and 2018:
2018 2017
Credit sales 6,000,000 5,600,000
Collection 5,830,000 4,800,000
Accounts written off 54,000 None
Recovery of accounts previously written off 14,000 None