Receivables Mock Quiz
Receivables Mock Quiz
Receivables Mock Quiz
A. ACCOUNTS RECEIVABLE
A portion of the sales journal for the Qatar Company for year 2018 are as follows:
1. Under the gross method, how much will Qatar recognize as sales discounts for
the year ended December 31, 2018? Assume that any account whose discount
period has not yet expired is still expected to be collected within the discount
period.
2. Under the net method, how much will Qatar recognize as sales discounts
forfeited for the year ended December 31, 2018?
3. Under the allowance method, how much is the balance of “allowance for sales
discount” account as of December 31, 2018? Assume that these are the only
customers that have not yet paid their accounts
Mongolia, Inc. total credit sales for the year ended December 31, 2018 are as follows:
Remittances from Diners Club and Mastercard were already received by Mongolia during
the year, while Mongolia expects that Visa will remit the collections on January 7, 2019.
5. How much is Mongolia’s total cash receipts from its credit card sales in 2018?
6. How much is the total credit card service charge recognized by Mongolia for the
year ended December 31, 2018?
On March 1, 2019, Bhutan Inc. sold one of its vehicles with a cost of P3,500,000 and
accumulated depreciation of P1,800,000. Bhutan received a three-year, non-interest
bearing note for P2,200,000 payable on February 28, 2022. There is no readily available
fair value for the machine, nut notes of the similar amount and tenor are issued at a
prevailing rate of 9%.
7. How much is the gain or loss on sale of the transportation equipment on March
1, 2019?
8. How much is the interest income recognized by Bhutan for the year ended
December 31, 2020?
9. How much is the current portion of the notes receivable as of December 31,
2019?
On July 1, 2019, Seychelles Company sold a piece of land carried in its books for
P8,000,000 in exchange for a 10% promissory note with a face amount of P9,000,000.
The note is payable in annual installments of P3,000,000 plus accrued interest every June
30, starting June 30, 2020. There is no established cash price for the land but the
prevailing interest rate is 12%:
10. How much is the gain or loss on sale of land on July 1, 2019?
11. How much is the total interest receivable as of December 31, 2019?
12. How much is the interest income recognized by Seychelles from the note for the
year ended December 31, 2020?
13. How much is the carrying value of the note is classified as current as of
December 31, 2019?
On January 1, 2019, Seychelles Company sold a piece of land carried in its books for
P8,000,000 in exchange for a 12% promissory note with a face amount of P9,000,000.
The note is payable in annual installments of P3,000,000 plus accrued interest every
December 31, starting December 31, 2019. There is no established cash price for the
land but the prevailing interest rate is 8%:
14. How much is the gain or loss on sale of land on January 1, 2019?
15. How much is the total interest collected from the note as of December 31, 2019?
16. How much is the interest income recognized in the statement of comprehensive
income for the year ended December 31, 2020?
17. How much is the carrying value of the note is classified as non-current as of
December 31, 2019?
18. How much is the balance of the Allowance for Doubtful Accounts as of
December 31?
19. How much is the bad debts expense for the year?
20. How much is the total debits to the allowance account during the year?
21. How much is the amortized cost of the accounts receivable as of December 31?
After examination of the records of Armenia Inc., you determined the following year-end
amounts:
2019 2020
Net credit sales 2,500,000 1,750,000
Accounts receivable 550,000 510,000
Allowance for doubtful accounts 150,000 96,000
Written-off accounts during the 27,000
previous year but was
subsequently recovered
Accounts written-off 35,000
On December 31, 2019, the company changed its accounting estimate for its required
allowance for doubtful accounts at 20% of the Accounts Receivable.
22. How much is the bad debts expense for the year ended December 21, 2019
before the change in estimate?
23. How much is the under/overstatement of the bad debts expense after the change
in estimate?
24. How much is the amortized cost of the accounts receivable as of December 31,
2019?
26. How much is Pyongyang’s liability arising from the discounted note, assuming
that the discounting is with recourse?
ANSWER KEY
1. 33,000
2. 21,000
3. 33,000
4. 2,800,000
5. 3,038,000
6. 362,000
7. 1160 loss
8. 164,363
9. 0
10. 701,170 gain
11. 450,000
12. 872,789
13. 2,877,211
14. 1,633,996
15. 1,080,000
16. 505,977
17. 3,110,693
18. 31,000
19. 28,500
20. 12,500
21. 769,000
22. 62,000
23. 40,000 overstated
24. 440,000
25. 875,000
26. 843,398