ACCTG101 Receivables II
Presentation
•
Business
•
University
•
Medium
Quen Ross
Used 1+ times
FREE Resource
30 Slides • 7 Questions
1
ACCTG101
Receivables II
Arthur Rosada, CPA
2
CURRENT
AND NON-CURRENT RECEIVABLES
3
Assets are considered as current if they are realizable within one year or within the operating cycle, whichever is longer.
Receivables are considered current if they are trade receivables and non-trade receivables are current if realizable within one year or the operating cycle, whichever is longer.
Trade receivable and nontrade receivable which are currently collectible shall be presented as one line item called “trade and other receivables”
4
In the case of long-term installments receivable (real estate installment sales) where a major portion of the receivables will be collected beyond the normal operating cycle only the portion currently due is shown as current and the balance as noncurrent.
5
TRADE RECEIVABLES
Trade receivables are receivables arising from the ordinary course of the business.
Hence, they are always considered as current assets.
6
Illustration:
The company sold inventory for P50,000 on account. It has a receivable from insurance amounting to P10,000. Such is collectible within one year. It also has a P25,000 receivables from other sources, which are collectible after two years.
How much should be considered as current receivables?
7
Answer to Illustration:
P50,000 + P10,000 = P60,000
8
Multiple Choice
Review Question:
The company sold inventory for P80,000 on account. It has a receivable from insurance amounting to P20,000. Such is collectible within one year. It also has a P30,000 receivables from other sources, which are collectible after two years.
How much should be considered as current receivables?
P20,000
P80,000
P100,000
9
Explanation:
P80,000 + P20,000 = P100,000
10
Multiple Choice
Review Question:
On the December 31, 2020 statement of financial position of Roger Co., the current receivables consisted of the following:
Trade accounts receivable P93,000
Allowance for uncollectible accounts (2,000)
At December 31, 2020, the correct total of Roger’s current net receivables was
91,000
94,000
93,000
11
Explanation:
93,000 - 2,000 = 91,000
NOTE: It is presented net of the allowance which is a contra-asset account.
12
Multiple Choice
Review Question:
On the December 31, 2020 statement of financial position of Roger Co., the current receivables consisted of the following:
Trade accounts receivable P93,000
Allowance for uncollectible accounts (2,000)
Claim against shipper for goods lost in transit
(November 2020) 3,000
At December 31, 2020, the correct total of Roger’s current net receivables was
91,000
94,000
93,000
13
Explanation:
93,000 - 2,000 + 3,000 = 94,000
The claims against the shipper is presumed to be currently collectible. Hence, it is part of current assets.
14
CONSIGNED GOODS
Consigned goods are goods left by the consignor in the possession of the consignee to be sold by the consignee to third parties.
There is no sale yet.
There will only be a sale once the goods have actually been sold to third parties.
Hence, the consigned goods still belongs to the consignor. There is no receivable yet.
15
Illustration:
Pete Company bought P100,000 inventory. Pete sold half of this on account for P70,000. Later, it sent P25,000 of this on consignment at a selling price of P40,000. No collection has yet been made. How much should be the accounts receivable at the end of the period?
16
Answer to Illustration:
P70,000
The sale made on account was P70,000.
It will be recorded with a debit to accounts receivable and a credit to sales.
The consigned goods still belong to Pete.
No journal entry is made as regards that.
17
Multiple Choice
Review Question:
Pete Company bought P100,000 inventory. Pete sold half of this on account for P70,000. P40,000 of the P70,000 was already collected. Later, it sent P25,000 of this on consignment at a selling price of P40,000. No collection has yet been made. How much should be the accounts receivable at the end of the period?
105,000
125,000
30,000
15,000
18
Explanation
P70,000 – P40,000 = P30,000
The sale made on account was P70,000. It will be recorded with a debit to accounts receivable and a credit to sales.
But collection was amounting to P40,000 was already made.
Hence, a debit to cash and a credit to accounts receivable shall be recorded.
The consigned goods still belong to Pete. No journal entry is made as regards that.
19
The choices will be included on the next slide
20
Multiple Choice
At December 31, 2020, the correct total of Roger’s current net receivables was
91,000
94,000
93,000
21
Explanation:
93,000 - 2,000 + 3,000 = 94,000
Unsold goods should not be recorded in accounts receivable and sales.
Consigned goods are goods left by the consignor in the possession of the consignee to be sold by the consignee to third parties.
There is no sale yet.
22
There will only be a sale once the goods have actually been sold to third parties.
Hence, the consigned goods still belongs to the consignor. There is no receivable yet.
Security deposit amounting to P30,000 on lease of warehouse is a non-current asset.
23
SALES RETURNS
Sales have a normal balance of credit because they positive income items.
Sales returns on the other hand are reductions in the computation of net sales.
Hence, they are recorded by debiting them.
24
Illustration 1:
Rice Company sold inventory on account for P100,000. How is the sale recorded?
25
Answer to Illustration:
Accounts receivable 100,000
Sales 100,000
26
Illustration 2:
The customer returned one fourth of the goods it received. How is the return of P25,000 recorded by Rice?
27
Answer to Illustration:
Sales Returns 25,000
Accounts receivable 25,000
28
Illustration 3:
If the gross sales amounted to P100,000 and the sales returns amounted to P25,000, how much is the net sales?
29
Answer to Illustration:
P100,000 – P25,000 = P75,000
30
Illustration 4:
Lyn Corp. has a beginning balance for accounts receivable amounting to P20,000. It has net sales of P75,000 and collection of P40,000.
How much is the ending balance of the accounts receivable?
31
Answer to Illustration:
P20,000 + P75,000 – P40,000 = P55,000
32
Multiple Choice
Review Question:
Lyn Corp. has a beginning balance for accounts receivable amounting to P30,000. It has net sales of P75,000 and collection of P45,000. How much is the ending balance of the accounts receivable?
30,000
75,000
15,000
60,000
33
Explanation:
P30,000 + P75,000 – P45,000 = P60,000
34
The choices will be included on the next slide
35
Multiple Choice
What amount should Sonya report for account receivable, before allowances, at December 31, 2020?
2,625,000
3,375,000
1,125,000
1,000,000
36
Explanation:
650,000 + 2,700,000 - 75,000 – 2,150,000 = 1,125,000
NOTE: The requirement is before allowances.
37
E N D
Make sure to answer the
Receivables Part 2 Activity
ACCTG101
Receivables II
Arthur Rosada, CPA
Show answer
Auto Play
Slide 1 / 37
SLIDE
Similar Resources on Wayground
30 questions
House
Presentation
•
University
33 questions
B1 week 4
Presentation
•
University
30 questions
Mouse vs. Scorpion
Presentation
•
University
30 questions
Comparative and Superlative Adjectives
Presentation
•
Professional Development
33 questions
Expressing possession: Spanish possessive adjectives
Presentation
•
University
30 questions
Verb and Tense
Presentation
•
University
33 questions
Demanda de un producto
Presentation
•
University
Popular Resources on Wayground
24 questions
PBIS-HGMS Day 10
Quiz
•
6th - 8th Grade
10 questions
HCS SCI 03 Summer School Review 3
Quiz
•
3rd Grade
11 questions
Home Scope
Quiz
•
7th - 8th Grade
15 questions
HCS SCI 05 Summer School Assessment 3 Review
Quiz
•
5th Grade
35 questions
Lufkin Road Middle School Student Handbook & Policies Assessment
Quiz
•
7th Grade
18 questions
Geo 11.3 Area of Circles and Sectors
Quiz
•
9th - 11th Grade