Reference no: EM133078315

Questions -

Q1. SAL Company prepared an aging of accounts receivable on December 31 and determined that the net realizable value of the accounts receivable was P1,500,000. Allowance for doubtful accounts on January 1 is debit balance of P100,000. Accounts written off as uncollectible is P200,000 while recovery of accounts previously written off is P50,000. Accounts receivable balance on December 31 is P1,900,000. As part of year-end adjusting entries, what amount should be debited to Bad debts expense at year end?

Q2. MIR Company disclosed the following changes:

Cash- P480,000 decrease

Accounts receivable- P300,000 increase

Merchandise inventory- P3,100,000 increase

Accounts payable- P420,000 increase

During the year, the owner borrowed P4,000,000 in notes from the bank and paid of notes of P3,000,000 and interest of P240,000. Interest of P100,000 is accrued on December 31. There is no interest payable at the beginning of the year. Also, the owner transferred certain investment in equity securities to the business and these were sold for P1,500,000 to finance purchase of merchandise. The owner made a weekly withdrawal of P10,000. If there are 52 weeks in a year, what is the net income for the current year?

Q3. The Supplies asset account began the year with a balance of P 190,000. During the year, supplies in the amount of P 490,000 were purchased. At the end of the year the inventory of supplies on hand was P 220,000. The adjusting entry to record the transaction has:

a. Debit to Supplies amounting to P490,000

b. Credit to Supplies expense amounting to P190,000

c. Debit to Supplies expense amounting to P460,000

d. Debit to Supplies amounting to P460,000