Reference no: EM133189840
Question - Classification of receivables - When examining the accounts of Tripoli Company, you ascertain that balances relating to both receivables and payables are included in a single controlling account (called receivables), which has a P23,050 debit balance. An analysis of the details of this account revealed the following:
Items
Debit Credit
Accounts receivable - customers P40,000
Accounts receivable - officers (current collection expected) 2,500
Debit balances - creditors 450
Expense advances to salespersons 1,000
Share capital subscriptions receivable 4,600
Accounts payable for merchandise P19,250
Unpaid salaries 3,300
Credit balance in customer accounts 2,000
Cash received in advance from customers for goods not yet shipped 450
Expected bad debts, cumulative 500
1. Give journal entry to eliminate the above account and to set up the appropriate accounts to replace it.
2. How should the items be reported on Tripoli's Company's balance sheet?