Assignment.

Financial Accounting 1
1. On January 1, 2012, the balance of accounts receivable of Chans Company was
P5,000,000 and the allowance for bad debts on same date was P 800,000. The following data were
gathered:
Credit sales
Writeoffs
Recoveries
2009
10,000,000
250,000
20,000
2010
14,000,000
400,000
30,000
2011
16,000,000
650,000
50,000
2012
25,000,000
1,100,000
145,000
Bad debts are provided for as percentage of credit sales. The accountant calculates the
percentage annually by using the experience of the three years prior to the current year.
How much is the bad debts expense for 2012?
Ans: P750,000
2. Chayze Company uses the balance sheet approach in estimating bad debts expense. The
company prepares an adjusting entry to recognize this expense at the end of each month.
During the month of July, the company wrote off a P1,000 receivable and recovered P200
of previous writeoffs. Following the adjusting entry for July, the credit balance in the allowance
for bad debts account was P2,500 larger than it was on July 1. What amount of uncollectible
accounts expense was recorded in July?
3. Chlenz Company has a note receivable of
P200,000 from Hyuen Company that it is carrying at face value and is due on December 31, 2013.
Interest on the note payable at 9% each December 31. Hyuen Company paid the interest
due on December 31, 2009, but informed
Chlenz that it would probably miss the next two years interest payments because of its
Financial difficulties. After that, it expected to resume its
annual interest payments, but it would make
the principal payment one year late, with interest paid for that additional year at the
time of the principal payment. How much should be recognized as loss on impairment in
2009? (Round off present value factors to 4 decimal places)
4.
Sydney Company reported the following balances (after adjustment) at the END of 2012 and 2011.
2012
2011
Total Accounts receivable
105,000
96,000
Net Accounts receivable
102,000
94,500
During 2012, Sydney wroteoff P3,200 and recovered P800 on accounts previously written
off in previous years. How much is the doubtful accounts expense for the year 2012?
Answer: 3,900
5.
Jaylen Company obtained a one year loan of P5,000,000 from a bank on April 1, 201 The
loan was discounted at 12%. The company signed a note and pledged its accounts
receivable of P5,000,000 as collateral for the loan. In relation to the loan, what is the
carrying value of the notes payable on December 31, 2012? (use straight line amortization).
6. On November 30, 2012, accounts receivable in the amount of P900,000 were assigned by Huie
company to a Finance company as a security for a
loan of P750,000. Finance company charged a 3%
commission. The interest rate on the note is 12%. During December, Huie collected
P350,000 on assigned accounts after deducting P560 of discounts. Huie wrote off P530
assigned accounts. On December 31, Huie remitted the amount collected to Finance
company plus one month interest on the note. How much is Huies
EQUITY in the assigned accounts receivable as of December 31,
7. Hyuan company factored P600,000 of accounts
receivable to a financing company on October 1, 2012. The control of these receivables were

surrendered to the finance company.

Commission is 3% and hold back is 5% of the accounts receivable. In addition, the
financing company charged 15% interest computed on a weighted average time to maturity
of the receivables of 54 days. The fair value of the recourse obligation is P9,000.
How much will Hyuan received (cash) from this factoring?
Ans: 538685
8. On May 17, Hyuen company accepted a P6,500, 8%, 90day note from a customer. On June 11,
the not e was discounted at 10%. At maturity date, the note was dishonored and the bank
charged a P25 protest fee. The amount the Hyuen company would debit to Notes
receivable dishonored (accounts receivable) is?
9. On October 1, 2012, Cloyce company discounted with recourse at 12% a one year non
interest bearing note of P5,000,000 maturing on January 1, 2013. What amount of contingent
liability for this note must Cloyce disclose in its 2012 financial statement?
10. At December 31, 2012, the balance of the inventory account was P502,000, and
theallowance for inventory writedown was P33,000.
The inventory cost and other data at December 31, 2012 are as follows: (amounts in thousands).
Item
Cost
Replace. Cost
Sales P.
NRV
A
89
86
91
87
B
94
92
93
85
C
125
135
129
111
D
194
114
205
197
What is the gain on reversal of inventory writedown?
Answer: 8 000
The following information for the month of August is given below:
Date
Units
unit Cost
1
2,000
36
Beg.
7
3,000
37.2
Pur
12
3,600
Sale
21
4,800
38
Pur
22
3,800
Sale
29
1,600
38.60
Pur
How much is the cost of ending inventory using:
11. FIFO perpetual? 152 960
12. Weighted average periodic? 150 080
A physical inventory taken on December 31,
2012 resulted in an ending inventory of P1,440,000. The company suspects some inventory
may have been taken by employees. To estimate the cost of missing inventory, the following
information were gathered:
Inventory Dec 31, 2011
Purchases during 2012
Cash sales during 2012

1,280,000
5,640,000
1,400,000
Shipment received on 26 December 2012, included in inventory but not recorded as purchases
40,000
Deposits made with suppliers, entered as purchases. Goods were not received in 2012
80,000
Collections on accounts receivable in 2012
7,200,000
Accounts receivable Beg 2012
1,000,000
Accounts receivable End 2012
1,200,000
Gross profit percentage on sales
40%

On December 31, 2012, what are:

13. Total credit sales? 7 400 000
14. Total cost of goods available for sale? 6 880 000
15. Cost of goods sold? 4 440 000
16. Estimated cost of missing inventory? 160,000
Chans uses the retail inventory method. The following information is available for the
current year:
Cost
Retail
Beg. Inv.
1,300,000
2,600,000

Purchases
18,000,000
29,200,000
Freight in
400,000
Purchase returns
600,000
1,000,000
Purchase allowance
300,000
Departmental T. in
400,000
600,000
Net markups
600,000
Net markdowns
2,000,000
Sales
24,700,000
Sales returns
350,000
Sales discount
200,000
Employee discounts
600,000
Loss from breakage
50,000
18. What is the estimated cost of ending inventory:
19. Conventional approach? 3 000,000
20. Average approach? 3 200,000
21. FIFO? 3 250,000
20. On January 1, Chayzes assets totaled P210,000,
and its liabilities amounted to P120,000. During the
year, owner investments amounted to P72,000, and owner withdrawals totaled P75,000. At
year end, assets totaled P270,000, and liabilities amounted to
P171,000. The amount of net income for the year was?
21.Chlenz Company sells goods with a cost of P100,000 for P140,000 and a credit
period of 6 months. Chlenz normal cash price would have been P125,000 with a credit period
of one month or with a P5,000 cash discount for cash on delivery. How much should Chlenz
recognize as revenue?
22. The unadjusted trial balance of Cloyce Company as at December 31, 2012 showed
Accounts receivabletrade with a balance of P693,000. Investigation revealed that it
included amounts due from officers P75,000; claim pending against freight company P9,000;
and refund on insurance policy P4,500. According to the subsidiary ledger which
have been thoroughly checked and rechecked, the trade accounts receivable totaled P600,000
(composed of current accounts P375,000; two
months account P120,000; and three months or more
P105,000). Responsible officials have acknowledged definite uncollectibility of three
months account with balance totaling P22,500; they have expressed doubt with respect to
anadditional P24,000 worth of accounts in the same category, and they consider all other
accounts collectible. At what net realizable value should the accounts receivable
trade be carried in the balance sheet as of December 31, 2012?
23. On June 9, 2012, Trey Company sold
merchandise with a list price of P5,000 to a customer.Trey allowed a trade discounts of 30%
and 20%. Credit terms were 2/15, n/40 and the sale was made FOB shipping point. Trey
prepaid P200 of delivery cost as an accommodation.On June 25, Trey received
a remittance in full payment in the amount of?
24.Chans company purchased the following portfolio of trading securities during 2012
and reported the following balances at December 31, 2012. No sales occurred during 2012.
Security
Cost
FMV (12/31)
A
240,000
255,000
B
420,000
390,000
C
296,000
290,000
On January 6, 2013, all the securities were sold at
P1,100,000 net of P20,000 transaction cost. What is the amount of realized gain or loss on
this sale?
25.On September 31, 2012, Chayze company exchanged its equipment for 2,500 shares of
Hyuan ordinary shares. On that date, the equipment had a carrying value of P300,000 and
its fair value was P260,000. The book value of Hyuans ordinary shares
was P96 per share. On December 31, 2012, Hyuan

had 25,000 number of ordinary shares outstanding but its market

value was not clearly determinable. What amount should Chayze report as carrying value of the
investment?