Sample problem 1

Information from the records of ABC Company is shown below:

o Accounts receivable - net of P10,000 credit balance 50,000
o Notes receivable (trade) 5,000
o Notes receivable (non-trade) - P5,000 due in one year 25,000
o Dividends receivable 1,000
o Subscriptions receivable 2,000
o Advances to officers and employees - due in 18 months 4,000
o Accounts payable - net of P6,000 debit balance 3,000

Requirements: Compute for (a) total trade receivables and (b) total current receivables.

Accounts receivable (50,000 + 10,000 credit balance) 60,000

Notes receivable (trade) 5,000
TOTAL TRADE RECEIVABLES 65,000

Notes receivable (non-trade) – current portion only 5,000

Dividends receivable 1,000
Advances to suppliers (from debit balance in AP) 6,000
Total current non-trade receivables 12,000
Add: Total trade receivables 65,000
TOTAL CURRENT RECEIVABLES 77,000

Sample Problem 2
On December 31, Miami Co's "Accounts receivable" balance per ledger of P1,250,000 includes:
1. MasterCard or VISA credit card sale of merchandise to customer P10,000
2. Overpayment to supplier for inventory purchased on account
20,000
3. Insurance claim on automobile accident 2,000
4. Advance to sales manager due in one year 4,000
5. 5-year note receivable due from company president
(This was issued by the president for the loan granted to him)
300,000
6. Interest due on 5-year note from company president, interest payable
annually 6,000
7. Acceptance of 6-month note for past due-account arising from
sale of inventory 5,000
8. Accrued interest receivable on the note above 100
9. Overpayment by customer of an account receivable
(5,000)
10. Accounts receivable to customers definitely uncollectible 4,000
11. Other trade accounts receivable-unassigned
50,000
12. Trade accounts receivable-assigned 10,000
13. Note receivable customer (this note is for a cash loan made to
this customer collectible in 3 years) 30,000
14. Claim for a tax refund from last year 3,000
15. Prepaid insurance-4 months remaining in the policy period 4,000
16. Advances to or receivables from stockholders, (P100,000 is
collectible currently) 250,000
17. Advances to affiliates 125,000
18. Subscription receivables 150,000
19. Special deposits on contract bids 30,000
20. Dividend receivables 10,000
21. Notes receivable dishonored 5,000
22. Accrued rent receivables 6,000
23. Claims against common carriers 4,900
24. Acceptance of 8-month note from employees arising from sale of inventory
6,000
25. Trade installment receivable due within 16 months, gross of
unearned interest income of P20,000 220,000
TOTAL P1,250,000

Required:
Based on the above data, compute for the following:
1) Trade accounts receivable as of December 31
2) Trade notes receivable as of December 31
3) Trade and other receivables to be presented in the current asset section of the balance
sheet
4) Noncurrent receivables as of December 31
5) Non-trade receivables as of December 31

ANSWER:

MasterCard or VISA credit card sale of merchandise to customer P10,000

Other trade accounts receivable-unassigned 50,000
Trade accounts receivable-assigned 10,000
Notes receivable dishonored 5,000
Trade installment receivable due within 16 months, gross of
unearned interest income of P20,000 (220,000 – 20,000) 200,000
TOTAL TRADE ACCOUNTS RECEIVABLE 275,000

Acceptance of 6-month note for past due-account arising from

sale of inventory 5,000
Acceptance of 8-month note from employees arising from sale of inventory 6,000
TOTAL TRADE NOTES RECEIVABLE 11,000

Total trade accounts receivable 275,000

Total trade notes receivable 11,000
Overpayment to supplier for inventory purchased on account 20,000
Insurance claim on automobile accident 2,000
Advance to sales manager due in one year 4,000
Interest due on 5-year note from company president, interest payable
annually 6,000
Accrued interest receivable on the note above 100
Claim for a tax refund from last year 3,000
Advances to or receivables from stockholders, (P100,000 is
collectible currently) 250,000
Dividend receivables 10,000
Accrued rent receivables 6,000
Claims against common carriers 4,900
TOTAL TRADE AND OTHER RECEIVABLES – CURRENT 442,000

5-year note receivable due from company president

(This was issued by the president for the loan granted to him) 300,000
Note receivable customer (this note is for a cash loan made to
this customer collectible in 3 years) 30,000
Advances to or receivables from stockholders, (P100,000 is
collectible currently) 250,000
Advances to affiliates 125,000
Special deposits on contract bids 30,000
TOTAL NONCURRENT RECEIVABLES 635,000

OR

Unadjusted accounts receivable (net of P20,000 unearned interest

Income and P4,000 uncollectible account) – P1,250,000
- P20,000 - P4,000 P1,226,000
Add: Overpayment by customer of an AR 5,000
Total 1,231,000
Less: Prepaid insurance – 4 months 4,000
Subscription receivables – noncurrent 150,000
Total trade and other receivables current asset 442,000
TOTAL NONCURRENT RECEIVABLES 635,000

Unadjusted accounts receivable (net of P20,000 unearned interest

Income and P4,000 uncollectible account) – P1,250,000
- P20,000 - P4,000 P1,226,000
Add: Overpayment by customer of an AR 5,000
Total 1,231,000
Less: Prepaid insurance – 4 months 4,000
Total trade accounts receivable 275,000
Total trade notes receivable 11,000

Subscription receivables-noncurrent 442,000

TOTAL NON-TRADE RECEIVABLES 791,000