Problem 4-1

a. accounts receivable 775000

notes receivable 100000
installments receivable 300000
advances to suppliers 150000
advances to subsidiary 400000
claim receivable 15000
subscriptions receivable 300000
accrued interest receivable 10000
customer's credit balances 30000
advances from customers 20000
receivables 2000000

b. accounts receivable 775000

allowance for doubtful accounts -50000
notes receivable 100000
installments receivable 300000
advances to suppliers 150000
claim receivable 15000
subscription receivable 300000
accrued interest receivable 10000
Total trade and other receivables 1600000

c. The advances to subsidiary should be classified as noncurrent and presented as long-term investment
The customers' credit balances and advances from customers should be classified as current liabilities and included as part of

Problem 4-2
a. accounts receivable - January 1 600000
Charge sales 6000000
Total 6600000
Less: Collections from customers 5300000
writeoff 35000
merchandise returns 40000
allowances to customers 25000 5400000
Accounts receivable - december 31 1200000

b. subscription receivable 150000

deposit on contract 120000
claim receivable 60000
advances to employees 10000
advances to affiliated 100000
advances to supplier 50000
accounts receivable 490000

c. accounts receivable 1200000

claim receivable 60000
advances to employees 10000
dvances to supplier 50000
total trade and other receivables 1320000

d. the subscriptions receivable should be presented as deduction from subscribed share capital
the deposit on contract should be classified as noncurrent and presented as other noncurrent asset
the advances to affilitates should ebe classified as noncurrent and presented as long-term investment

Problem 4-3
FOB destination and freight collect
1. accounts receivable 500000
freight out 10000
sales 500000
allowance for freight charge 10000

2. cash 475000
sales discount 15000
allowance for freight charge 10000
accounts receivable 500000

FOB destination and freigth prepaid

1. accounts receivable 500000
freight out 10000
sales 500000
cash 10000

2. cash 485000
sales discount 15000
accounts receivable 500000

FOB shipping point and freight collect

1. accounts receivable 500000
sales 500000

2. cash 485000
sales discount 15000
accounts receivable 500000

FOB shipping point and freight collect

1. accounts receivable 500000
sales 500000

2. cash 485000
sales discount 15000
 accounts receivable 500000

FOB shipping point and freight prepaid

1. accounts receivable 510000
sales 500000
cash 10000

2. cash 495000
sales discount 15000
accounts receivable 510000

Problem 4-4
1. accounts receivable 4000000
sales 4000000

2. cash 1470000
sales discount 30000
accounts receivable 1500000

3. cash 1000000
accounts receivable 1000000

4. sales return 100000

accounts receivable 100000

5. sales return 20000

allowance for sales return 20000

Problem 4-5
1. accounts receivable 4500000
sales revenue 4500000

2. cash 4410000
sales discount 90000
accounts receivable 4500000

3. cash 4500000
accounts receivable 4500000

Problem 4-6
1. accounts receivable 2450000
sales revenue 2450000

2. cash 2450000
accounts receivable 2450000
3. cash 2500000
accounts receivable 2450000
sales discount forfeited 50000

Problem 4-7
1. accounts receivable 4000000
sales revenue 4000000

2. sales return 300000

accounts receivable 300000

3. sales return 100000

allowance for sales returns 100000

estimated sales returns (10% x 4000000) 4000000

actual returns 3000000
balance 100000

problem 4- 8 answer A
trade accounts receivable 200000
allowance for doubtful accounts -100000
claim receivable 300000
total trade and other receivables 2200000

Prolem 4-9 anwer B

accounts receivable - january 1 1300000
credit sales 5500000
collections from customers -5000000
sales return -150000
accounts written off -100000
accounts receivable - december 31 1550000
allowance for doubtful accounts -250000
allowance for sales return -50000
net realizable value 1250000

Problem 4-10 answer A

accounts receivable - january 1 1300000
add: credit sales 5400000
total 6700000
less: collection from customers 4750000
accounts written off 125000 4875000
accounts receivabl - december 31 1825000
Problem 4-11 answer A
accounts receivable 3500000
trade installments receivable(850000-50000) 800000
accounts receivable from officers 150000
accounts on which postdated checks are held 200000
total trade accounts receivable 4650000

Problem 4-12
Question 1 answer B
Accounts receivable - january 1 560000
charge sales 5250000
accounts written off but recovered 10000
total 5820000
collections from customers -5150000
writeoff -35000
merchandise returns -25000
allowance fro customers for shipping damage -15000
accounts receivable - december 31 595000

accounts receivable - january 1 530000

credit balance fo customer 30000
adjusted accounts receivable 560000

collections from customers 5200000

overpayment -50000
adjusted collections 5150000

Question 2 answer c
accounts receivable 595000
claim receivable (400000-50000) 350000
advances to supplier 300000
total trade and other receivables 1245000

question answer c
subscription receivable (1000000-200000) 800000
deposit on contract 500000
total long-term receivables 1350000

Problem 4-13
Question1 answer A
accounts receivable - january 1 950000
credit sales 3800000
total 4750000
cash received form credit customers -3024000
sales discounts -126000
accounts receivable written off -50000
sales returns and allowances -250000
accounts receivable - december 31 1300000

total sales 5900000

cash received from cash customers - cash sale -2100000
credit sales 3800000

gross accounts receivable collected (3024000 3150000

sales discounts (4% x 3150000) -126000
cash received from credit customers 3024000

gross amount 100%

cash discount (4/10 or 4% within 10 days) 4%
net amount 96%

Question2 answer B
allowance for doubtful accounts - january 1 100000
recovery of accounts written off 80000
doubtful accounts expense for current year 70000
total 250000
accounts written off -50000
allowance for doubtful accounts - december 200000

Problem 4-14 Problem 4-15

1. D 1. A
2. D 2. A
3. A 3. A
4. C 4. D
5. D 5. B
6. C
7. D
8. C
9. A
10. C
ities and included as part of "trade and other payables"
Problem 5-1
a. Credit Sales(75%x5000000) 3750000
Doubtful accounts 75000

Doubtful accounts 75000

Allowance for doubtful accounts 75000

b. Doubtful accounts (1%x5000000) 50000

Allowance for doubtful accounts 50000

c. Rquired allowance 80000

Less: Credit balance of allowance 20000
Doubtful accounts expense 60000

Doubtful accounts 60000

Allowance for doubtful accounts 60000

d. Required allowance (10%x500000 50000

Less: Credit balance of allowance 20000
Doubtful accounts expense 30000

Problem 5-2
1. Accounts Receivable 7000000
Sales 7000000

2. Cash 2450000
Sales discount 50000
Accounts Receivable (2450000/98%) 2500000

3. Cash 3900000
Accounts Receivable 3900000

4. Allowance for doubtful accounts 30000

Accounts receivable 30000

5. Accounts receivable 10000

Allowance for doubtful accounts 10000

Cash 10000
Accounts Receivable 10000

6. Sales Return 70000

Accounts Receivable 70000

Requirement b
Doubtful accounts 40000
Allowance for doubtful accounts 40000
Rate=40000/1000000 = 4%

Allow for doubtful accts - Dec 31 ( 60000

Less:Allow before adjustment 20000
Doubtful accts expense 40000

Requirement c
Accounts Rec - Dec 31 1500000
Allowance for doubtful accounts -60000
Net realizable value 1440000

Problem 5-3
Requirement a
1.Cash 800000
Accounts receivable 7200000
Sales(800000/10%) 8000000

2. Cash 684000
Sales Discount(5%x720000) 36000
Accounts Receivable(10%x7200000) 720000

3. Cash 5940000
Accounts Receivable 5940000

4. Sales Discount 10000

Allowance for sales discount 10000

5. Sales Return 80000

Accounts Recevable 80000

6. Allowance for doubtful accounts 60000

Accountts Receivable 60000

Accounts Receivable 10000

Allowance for dountful accounts 10000

Cash 10000
Accounts Receivable 10000

7. Doubtful accounts 70000

Allowance for doubtful accounts 70000

Required allowance - Dec 31 (5%x24 120000

Less: Allowance before adjustment 50000
Doubtful accounts 70000

Rate = 100000/2000000 = 5%

Requirement b
Accounts Receivable 2400000
Less: Allow for doubtful accts 120000
Allow for sales disct 10000 130000
Net realizable value 2270000

Problem 5-4
Requirement a
1. Accounts Receivable 2600000
Sales(3070000-470000) 2600000

2. Cash (2455000-1455000) 1000000

Accounts Receivable 1000000

3. Cash 1455000
Sales discount 45000
Accounts Receivable (1455000/97%) 1500000

4. Allowance for doubtful accounts 20000

Accounts Receiable 20000

5. Cash 470000
Sales 470000

6. Sales return and allowances 55000

Accounts receivable 55000

7. Sales return and allowances 10000

Accounts receivable 10000

8. Accounts receivable 5000

Allowance for doubtful accounts 5000

Cash 5000
Accounts receivable 5000

Requirement b
Doubtful accounts 50000
Allowance for doubtful accounts 50000
Credit Sales 2600000
Less: Sales discount 45000
Sales return and allowances 55000 100000
Net credit sales 2500000

Doubtful accounts (2500000x2%) 50000

Requirement c
Accounts receivable 625000
Less: Allowance for doubtful account 60000
Net realzable value 565000

Problem 5-5
Requirement a
1. Accounts receivable 7935000
Sales 7935000

2. Cash 4410000
Sales discount 90000
Accounts receivable (4410000x98%) 4500000

3. Cash 2475000
Sales discount 25000
Accounts receivable(2475000/99%) 2500000

4. Acconts receivable 15000

Allowance for doubtful accounts 15000

Cash 15000
Accounts receivable 15000

5. Cash 1100000
Accounts receivable 1100000
(8000000-4410000-2475000-15000)

6. Allowance for doubtful accounts 55000

Accounts receivable 55000

7. Sales return 30000

Accounts receivable 30000

Requiremnet b
Rate (60000/1500000) = 4%
Required allowance (4%x1250000) 50000
Allow before adjustment (60000+15 20000
Increase in allowance 30000

Doubtful accounts 30000

Allowance for doubtful accounts 30000

Requirement c
Accounts receivable - Dec 31 1250000
Allowance for doubtful accounts -50000
Net realizable value 1200000

Problem 5-6
Amount % of UncollRequired allowance
1. Not yet due 1700000 - -
1-30 days past due 1200000 5% 60000
31-60 days past due 100000 25% 25000
61-90 days past due 150000 50% 75000
over 90 days past due 1200000 100% 120000
3270000 280000

2. Allowance-January 1 170000
Recoveries 30000
Doubtful accounts expense 345000
Total 545000
Less: Writeoff (235000+30000) 265000
Required allownce - Dec 31 280000

3. Doubtful accounts expense 345000

Allowance for doubtful accounts 345000

4. Accounts receivable 3270000

Less: Allow for doubtful accounts 280000
Net realizable value 2990000

Problem 5-7
Rate in 2019 = 170000-10000/10000000 = .016
Rate in 2020 = 258000-20000/14000000 = .017

1. Retained earnings (.016x1250000) 20000

Allowance for doubtful accounts 20000

2. Allowance - January 1,2020 20000

Recoveries - 2020 10000
Doubtful accounts - 2019 (SQUEEZE) 92000
Total 122000
Less: Writeoff - 2020 88000
Allowance - Dec 31,2020 (.017x200 34000

3. Accounts receivable - Dec 31, 202 2000000

Less: Allowance for doubtful account 34000
Net realizable value 1966000

Problem 5-8
1. Allowance - Jan 1, 2020 500000
Doubtful accounts recorded(2%x200 400000
Recovery 50000
Total 950000
Less: Writeoff (300000+100000) 400000
Allow before adjustment 550000

2. 5000000x5% 250000
2000000x10% 200000
1000000x25% 250000
500000-100000x75% 300000
Required allowance - Dec 31,2020 1000000

3. Doubtful accounts 450000

Allowance for doubtful accounts(100 450000

Problem 5-9
1. Allowance - 1/1/2020 (1%2800000 28000

2. Allowance - 1/1/2020 28000

Doubtful accounts recorded in 202 30000
Recovery 7000
Total 65000
Writeoff -27000
Allowance before adjustment -12/3 38000

3. 300000x1% 3000
80000x5% 4000
60000x20% 12000
25000x80% 20000
Required allowance - 12/31/2020 39000
Problem 5-10 Answer C

Problem 5-11 Answer B

0-60 days (1200000x1%) 12000
61-120 days (900000x2%) 18000
Over 120 days (1000000x6%) 60000
Allowance - 12/31/2020 90000

Allowance - Jan 1, 2020 60000

Uncollectible accounts expense (Squeeze) 80000
Recovery 20000
Total 160000
Accounts written off -70000
Allowance - Dec 31, 2020 90000

Problem 5-12
Question 1 Answer A
Available disc (2%x2000000) 40000
Allowance for sales discounts (50%x 20000

Question 2 Answer B
16-30 days (1400000x5%) 70000
31-60 days(400000x10%) 40000
Over 60 days (200000 x50%) 100000
Allowance for doubtful accounts 210000

Question 3 Answer C
Accounts receivable 4000000
Allowance for doubtful accounts -210000
Allowance for sales discount -20000
Net realizable vale 3770000

Prob 5-13 Answer B

Doubtful accounts expense (3%x300 100000

Prob 5-14 Answer A

Doubtful accounts expense (2% x 70 140000

Prob 5-15 Answer D

Allowance - Jan 1 200000
Doubtful accounts expense(5%x8000 400000
Recovery of accounts written off 50000
Total 650000
Accounts written off -100000
Allowance - Dec 31 550000

Prob 5-16 Answer D

Allowance - Jan 1 250000
Doubtful accounts expense (SQUEEZ 175000
Total 425000
Accounts written off 205000
Allowance - Dec 31 220000

Prob 5-17
Question 1 Answer B
Allowance - Jan 1 1000000
Recorded doubtful accounts (2%x20 400000
Recovery 50000
Writeoff (200000+100000) -300000
Allowance - Dec 31 before adjustme 1150000

Question 2 Answer A
0-60 days (6000000x10%) 600000
61-180 days (2000000x20%) 400000
181-360 days (1500000x30%) 450000
Over 360 days (500000 - 100000 x 5 200000
Required allowance 12/31/2020 1650000

Question 3 Answer C
Allowance - 1/1/2020 1000000
Recoveries 50000
Doubtful accts expense 900000
Total 1450000
Writeoff (200000+100000) -300000
Required allowance - 12/31/2020 1650000

Question 4 Answer D
Doubtful accounts expense 900000
Recorded amount (2%x20000000) 400000
Year-end adjustment to the allow ac 500000

Question 5 Answer B
Accounts receivable - 12/31/2020 9900000
Allow for doubtful accounts -1650000
Net Realizable value 8250000
Prob 5-18
Question 1 Answer B
Credit Sales Writeoffs Recoveries
2017 11100000 260000 22000
2018 12250000 295000 37000
2019 14650000 300000 36000
38000000 855000 95000

Rate = 855000-95000/38000000 = .02

Doubtful accounts expense for 2020 300000

Question 2 Answer a
Allowance for doubtful accounts - Ja 80000
Doubtful accounts exp for 2020 300000
Recoveries in 2020 40000
Total 420000
Writeoff in 2020 -310000
Allowance for doubtful accounts - D 110000

Question 3 Answer A
Accounts rec - Jan 1, 2020 2070000
Credit sales in 2020 15000000
Collection from customers in 2020 -14000000
Writeoff in 2020 -310000
Accts rec - 12/31/2020 2760000

Accts rec - 12/31/2020 2760000

Allow for doubtful accounts - 12/31 -110000
Net realizable value 26500000

Problem 5-19
Question 1 Answer A
30 days or less (3000000x50%) 150000
Between 31 and 60 days (1500000x 300000
Between 61 and 180 days (1200000 300000
Between 181 and one year (120000 600000
Allow for doubtful accts - 12/31/20 1350000

Question 2 Answer A
Doubtful accts expense 2017, 2018 1175000
Accounts written off 2018 and 2019 -200000
Recovery of accounts written off 20 75000
Allow for doubtful accts - 1/1/2020 1050000

Allow for doubtful accounts - 1/1/20 1050000

Recovery of accounts written off 20 100000
Dubtful accts exp for 2020 (SQUEEZE 500000
Total 1650000
Writeoffs (200000 + 100000 addition -300000
Allow for doubtful accounts - 12/3 1350000

Question 3 Answer C
Accts rec - 12/31/2020 6900000
Allow for doubtful accts - 12/31/202 -1350000
Net Realizable Value 5550000

30 days or less 3000000

Between 31 and 60 days 1500000
Between 61 and 180 days 1200000
Between 181 and one year 1200000
Over one year - to be written off -
Total accts rec 6900000

Problem 5-20
Question 1 Answer A
Allow for doubtful accts - 12/31/201 15000
Doubtful accts expense for 2020 30000
Total 45000
Allow for doubtful accts - 12/31/202 -10000
Accounts written off in 2020 35000

Question 2 Answer C
Accts rec - 12/31/2019 800000
Gross Sales 6150000
Total 6950000
Accts rec - 12/31/2020 -880000
Accts written off in 2020 -35000
Sales return - actual -15000
Collection from customers in 2020 6020000

Question 3 Answer A
Allowance for sales returns - 12/31/ 25000
Estimated sales returns (SQUEEZE) 10000
Total 35000
Actual sales returns -15000
Allowance for sales returns - 12/31 20000

Question 4 Answer B
Gross Sales 6150000
Estimated sales returns in 2020 -10000
Net Sales 6140000

Problem 5-21
1. C
2. A
3. A
4. B
5. C
6. D
7. A
8. A
9. D
10. B