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How much is net realizable value of the accounts receivable

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Question - Vic Vivar started business on January 1, 2019. His ledger on December 31, 2019 among others showed:

Accounts receivable P125,650

Sales 367,280

Sales returns and allowances 3,180

Bad debts provided for 2019 was 3% of net sales. During 2020, sales amounted P460,700 out of which P3,700 were returned by the customers. Cash received from customers amounted to P235,112.50, of which P132,112.50, after 2-1/2 percent discount, pertains to 2020 sales.

Of the 2019 accounts, P1,500 are worthless.

Bad debts provision for 2020 is 2% of net sales.

Required - all entries should have explanation (To record sales computed as follows:. Etc.)

1. Entries to record sales in 2019, including its subsequent collection.

2. Entry to record the allowance for bad debts on December 31, 2019.

3. Entries to record sales in 2020, including collection of previous and current receivables.

4. Entry to record the write-off of worthless accounts.

5. Entry to record the allowance for bad debts on December 31, 2020.

6. How much is net sales for the year 2020?

7. How much is net realizable value of the accounts receivable on December 31, 2020?

Reference no: EM132857801

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