Assessment Part 1

ASSESSMENT
1. C Company provided the following information related to its account receivable:

Last Year 12/31 estimated that 7,000 of accounts receivable would become uncollectible
Current Year 1/05 Wrote – off the 800 balance owed by J Company and the 500 balance
owed owed by F company
3/18 Reinstated the account of J Company that had been written off as
uncollectible upon receipt of payment in full.
Required: Journalize the transactions
2. Uncollectible account expense is estimated at ¼ of 1% of net sales of 4,000,000 for the year.
The current balance in allowance for doubtful account is 300 credit.
Required: what is the uncollectible account expense for the year?

Prepare the adjusting entry to be made on December 31.
What is the balance in allowance for doubtful accounts after adjustment?
3. The F Company uses the allowance method to account for uncollectible receivables. It had
the following transactions during the year.
05/14 received 75% of the 20,000 balance owed by Webb.Co., a bankrupt business. Wrote –
off remainder as uncollectible
6/20 reinstated the account of Zorn, Co., which had been written off in the preceding year as
uncollectible. Received 5,225 cash full payment of Zorn’s account
7/27 wrote off the 2, 500 balance owed by Smich, Inc which had no assets.
12/31 based on an analysis of Accounts Receivable, it is determined that 11,500 will become
uncollectible. The balance in allowance for doubtful accounts on December 31 prior to
adjustment is 200 credit.
Requirement:
1. the balance in allowance for doubtful account after adjustment.
2. the net realizable value of accounts receivable if the balance if the balance of account
receivable is 62,000
a
4. The allowance for Doubtful Accounts has a debit balance of 1,000 at the end of the year
(before adjustment), and uncollectible account expense is estimated at 2% of net sales. if the
net sales are 600,000, the amount of the adjusting entry to record the provision for doubtful
account is ,
a. 1,000
b. 13,000
c. 11,000
d. 12,000
5. the allowance for doubtful account has an unadjusted debit balance of 1,000 at the end of
the year. Estimate uncollectible accounts are 10,000. If accounts receivable are 600,000, the
amount entry is
a. 10,000
b. 11,000
c. 9,000
d.16,000
6. Allowance for doubtful account has a credit balance of 500 at the end of the year(before
adjustment), and an analysis of customer’s account indicates doubtful accounts of 11,500.
Which of the following entries records the proper provision for doubtful accounts?
a. debit uncollectible account expense, 11,000; credit allowance for doubtful accounts 11,000
b. debit uncollectible accounts expense, 12,000; credit allowance for doubtful accounts, 12,000
c. debit allowance for doubtful accounts, 12,000; credit uncollectible account expense, 12,000
d. debit allowance for doubtful accounts, 11,000; credit uncollectible account expense 11,000
7. on January 1, D company had balances in accounts receivable and allowance for uncollectible
accounts of 53,600 and 1, 325, respectively. During the year, D Company wrote off 1,465 in
accounts receivable and determined that there should be an allowance for uncollectible
account of 1,280 at December 31. Bad debt expense for 2016 would be;
a. 1,280
b. 1,465
c. 1,420
d. 1.140
8. A company expects 5% of its new accounts receivable to be uncollectible and 20% of its older
accounts to be uncollectible. If the company has 40,000 of newer accounts and 5,000 of older
accounts, the balance in the allowance of uncollectible accounts should be;
a. 3,000
b. 10,500
c. 42,000
d. 0
9. On January 1, 20x1, ABC Co. sold a transportation equipment with a historical cost of ₱1,000,000 and
accumulated depreciation of ₱300,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱800,000 due on January 1, 20x4. The prevailing rate of interest for this type of note is
12%.
How much is the interest income in 20x1?
a. 68,331
b. 76,532
c. 85,714
d. 96,000
10. How much is the carrying amount of the receivable on December 31, 20x2?
a. 800,000
b. 569,424
c. 637,755
d. 714,286
On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of ₱20,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱500,000 and a noninterest-bearing
note receivable of ₱8,000,000 due in 4 equal annual installments starting on December 31, 20x1 and
every December 31 thereafter. The prevailing rate of interest for this type of note is 12%.
11. How much is the interest income in 20x1?

a. 728,946
b. 678,334
c. 728,964
d. 704,236
12. How much is the current portion of the receivable on December 31, 20x1?
a. 1,271,036
b. 1,423,560
c. 3,380,102
d. 1,594,388
a. 4,803,663
b. 3,380,102
c. 6,074,699
d. 6,000,000
On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing
note receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every
January 1 thereafter. The prevailing rate of interest for this type of note is 12%.
a. 408,230
b. 278,334
c. 328,964
d. 288,220
a. 1,690,510
b. 892,857
c. 2,690,051
d. 1,594,388
16. How much is the carrying amount of the receivable on January 1, 20x3?
a. 892,857
b. 3,380,102
c. 6,074,699
d. 6,000,000
On January 1, 20x1, ABC Co. sold machinery with historical cost of ₱3,000,000 and accumulated
depreciation
16 of ₱900,000 in exchange for a 3-year, ₱2,100,000 noninterest-bearing note receivable due
in equal semi-annual payments every July 1 and December 31 starting on July 1, 20x1. The prevailing
rate of interest for this type of note is 10%.

a. 88,825
b. 177,649
c. 128,964
d. 164,591
a. 1,241,083
b. 982,378
c. 1,690,051
d. 1,594,388
On January 1, 20x1, ABC Co. sold machinery costing ₱3,000,000 with accumulated depreciation of
₱1,100,000 in exchange for a 3-year, ₱900,000 noninterest-bearing note receivable due as follows:
Date Amount of installment

December 31, 20x1 400,000
December 31, 20x2 300,000
December 31, 20x3 200,000
Total 900,000
The prevailing rate of interest for this type of note is 10%.
a. 467,354
b. 438,016
c. 376,345
d. 428,346
On January 1, 20x1, ABC Co. sold inventory costing ₱1,800,000 with a list price of ₱2,200,000 and a cash
price of ₱2,000,000 in exchange for a ₱2,400,000 noninterest-bearing note due on December 31, 20x3.
20. How much is the initial measurement of the receivable?

a. 1,800,000
b. 2,200,000
c. 2,000,000
d. 2,400,000
a. 2,125,390
b. 2,135,341
c. 2,098,343
d. 2,000,000

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ASSESSMENT

1. C Company provided the following information related to its account receivable:

Required: Journalize the transactions

Required: what is the uncollectible account expense for the year?

How much is the interest income in 20x1?

11. How much is the interest income in 20x1?

14. How much is the interest income in 20x1?

17. How much is the interest income in 20x1?

Date Amount of installment

The prevailing rate of interest for this type of note is 10%.

20. How much is the initial measurement of the receivable?

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