Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 9, Problem 8CP
(1)
To determine
Calculate the accounts receivable turnover for Year 2 and Year 1.
(2)
To determine
Calculate the day’s sales in receivables at the end of Year 2 and Year 1.
(3)
To determine
Conclude the Efficiency of Corporation C’s management in collecting accounts receivables.
(4)
To determine
Ascertain whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.
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BC Corp. reported a P500,000 account receivable balance at the beginning of the calendar year. For the year, it reported net credit sales of P4,000,000 and collections from customers of P4,050,000. An analysis of the sales showed that a sale amounting to P40,000 was shipped to the buyer on Dec. 31 under FOB destination term while a sale amounting to P50,000 was shipped to the buyer on Jan. 1 under FOB shipping point term. Included in the collections was an over-payment by a customer in the amount of P13,000. Not included in the initial sales and collections amounts are the following:(A) Sales made to officers made under customary terms, P200,000 of which were collected – P700,000 and(B) Claims against common carrier – P 200,000. How much should ABC report as accounts receivables as of Dec. 31?
Main Corporation has operated a branch in Cavite for one year. Shipments are billed to
the branch at cost. The branch carries its own accounts receivable, makes its own
collections, and pays its own expenses. The branch reported an inventory on December
31, 2021: Outsiders, P3,391; Home office, P7,625 The transactions for the year are
given effect to in the trial balance below: (see image)
Debit
5,040
Accounts
Credit
Cash..
Home Office Current
Purchases from outsiders .
Shipments from Home Office
Accounts receivable
P 21,000
25,000
56,216
15,360
7,500
684
Expenses..
Interest expense.
Gain on sale of equipment.
Sales..
8,800
80,000
P109.800
P109.800
11. Using the same information above, shipments to Branch account in the Home Office
books on January 1, 2022.
Main Corporation has operated a branch in Cavite for one year. Shipments are billed to
the branch at cost. The branch carries its own accounts receivable, makes its own
collections, and pays its own expenses. The branch reported an inventory on December
31, 2021: Outsiders, P3,391; Home office, P7,625 The transactions for the year are
given effect to in the trial balance below: (see image)
9. Determine the net profit of the Cavite Branch for 2021.
Credit
Debit
P 5,040
Accounts
Cash
Home Office Current
P 21,000
Purchases from outsiders
Shipments from Home Office.
Accounts receivable ..
Expenses
Interest expense..
Gain on sale of equipment.
Sales..
25,000
56,216
15,360
7,500
684
8,800
80,000
P109.800
P109.800
Chapter 9 Solutions
Financial Accounting
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