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i) If the selling price of Product A is P20 and 10,000 units were sold

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i) If the selling price of Product A is P20 and 10,000 units were sold.  How much is the receivable to be taken up in the books if the terms are as follows: trade discount is 10%, 5/10,n/30, FOB Shipping Point?  Freight charges is P1,000.

 

a. 180,000

b. 181,000

c. 179,000

d. 172,000

e. none of the above

 

 

 

ii. If the selling price of Product A is P20 and 10,000 units were sold.  How much is the receivable to be taken up in the books if the terms are as follows: trade discount is 10%, 5/10,n/30, FOB Shipping Point, Freight Collect?  Freight charges is P1,000.

 

a. 180,000

b. 181,000

c. 179,000

d. 172,000

e. none of the above

 

 

iii. If the selling price of Product A is P20 and 10,000 units were sold.  How much is the receivable to be taken up in the books if the terms are as follows: trade discount is 10%, 5/10,n/30, FOB Shipping Point, Freight Prepaid?  Freight charges is P1,000.

 

a. 180,000

b. 181,000

c. 179,000

d. 172,000

e. none of the above

 

 

iiii. If the selling price of Product A is P20 and 10,000 units were sold.  How much is the receivable to be taken up in the books if the terms are as follows: trade discount is 10%, 5/10,n/30, FOB Destination?  Freight charges is P1,000.

 

a. 180,000

b. 181,000

c. 179,000

d. 172,000

e. none of the above

 

 

iiiii. In preparing the draft financial statements of Candice Company for the year ended December 31, 2018, an analysis of the Accounts Receivable account revealed the following:

 

Trade accounts receivable (current)

P   2,000,000

Past due trade accounts

450,000

Uncollectible accounts

75,000

Credit balances in customer's accounts

(80,000)

Trade notes receivable dishonored

220,000

Due from consignee

350,000

Total

P    3,015,000

 

• The uncollectible accounts were identified as worthless accounts.

 

• The due from consignee accounts represents the cost of the goods sent out to Grace Company, the consignee. Of the goods sent out, Grace Company was able to sell goods costing for P100,000 for P150,000. A 10% commission was charged by Grace Company as per agreement with Candice Company and remitted the balance.  The cash was received in January 2019.

 

• The balance of the allowance for doubtful accounts before adjustment is a credit of P45,000.  Based on past experience the allowance should be maintained to equal 6% of trade receivables, net of amount due from the consignee who is bonded.  Candice Company has not provided yet for the 2018 bad debt expense.

 

The allowance for doubtful accounts after adjustment is

a. 160,200

b. 164,700

c. 168,300

d. 169,200