Chapter 1 Problem 5-5
a. Accounts receivable – January 1 600,000
Charge sales 6,000,000
Total 6,600,000
Less: Collections from customers 5,300,000
Writeoff 35,000
Merchandise returns 40,000
Allowances to customers 25,000 5,400,000
Accounts receivable – December 31 1,200,000
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b. Subscription receivable 150,000
Deposit on contract 120,000
Claim receivable 60,000
Advances to employees 10,000
Advances to affiliated 100,000
Advances to supplier 50,000
Accounts receivable 490,000
c. Accounts receivable 1,200,000
Claim receivable 60,000
Advances to employees 10,000
Advances to supplier 50,000
Total trade and other receivables 1,320,000
d. The subscriptions receivable should be deducted from subscribed share capital.
The deposit on contract should be classified as noncurrent and presented as other
noncurrent asset.
The advances to affiliates should be classified as noncurrent and presented as long-term investment.
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