Analysis of accounts receivable reveals that with two exceptions, all appeared collectible as at December 31, 2021. These are:b.) The company’s receivable from Redding Corporation in the amount of P58,000 was written off as uncollectible during the year based on the suggestion of the company’s legal counsel. However, on January 25, 2022, two months before the issuance of the audited financial statements, P8,000 was received as final settlement on this account.Required: Adjusting entries You have been engaged to audit FAR EASTERN COMPANY, a new client, for the year ended,December 31, 2021. The company prepared the trial balance set forth below, as of December 31,2021,theclose of its second year of operations.Account TitlesUnadjusted Trial BalanceDebitCreditCash112,600.00Marketable Securities72,000.00Allowance for decline in value of securitiesAccounts Receivable - Trade1,758,220.00Allowance for doubtful accounts40,000.00Accounts Receivable - OthersAdvances to affiliate48,000.00250,000.00Inventory, December 31, 2021Property, Plant and EquipmentAccumulated Depreciation2,770,000.00Accounts PayableIncome Tax PayableLong-term DebtOrdinary Share CapitalRetained EarningsRevaluation IncrementSalesCost of Sales2,269,604.00170,622.00Operating ExpensesOther Charges100,000.00Provision for Income Taxes (35%)80,954.00Discontinued Operations (Net)6,500.00Cumulative Effect of Change in Accounting Principle (Net)13,000.007,691,500.0020,000.0068,100.001,240,000.00408,616.0071,260.0060,000.002,042,000.00770,000.00240,000.002,771,524.007,691,500.00

Bad debts: When the company sells the goods on credit, it allows some period for the customer to…

Answered: Required: Adjusting entries

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Analysis of accounts receivable reveals that with two exceptions, all appeared collectible as at December 31, 2021. These are:

b.) The company’s receivable from Redding Corporation in the amount of P58,000 was written off as uncollectible during the year based on the suggestion of the company’s legal counsel. However, on January 25, 2022, two months before the issuance of the audited financial statements, P8,000 was received as final settlement on this account.

Required: Adjusting entries

You have been engaged to audit FAR EASTERN COMPANY, a new client, for the year ended,
December 31, 2021. The company prepared the trial balance set forth below, as of December 31,2021,the
close of its second year of operations.
Account Titles
Unadjusted Trial Balance
Debit
Credit
Cash
112,600.00
Marketable Securities
72,000.00
Allowance for decline in value of securities
Accounts Receivable - Trade
1,758,220.00
Allowance for doubtful accounts
40,000.00
Accounts Receivable - Others
Advances to affiliate
48,000.00
250,000.00
Inventory, December 31, 2021
Property, Plant and Equipment
Accumulated Depreciation
2,770,000.00
Accounts Payable
Income Tax Payable
Long-term Debt
Ordinary Share Capital
Retained Earnings
Revaluation Increment
Sales
Cost of Sales
2,269,604.00
170,622.00
Operating Expenses
Other Charges
100,000.00
Provision for Income Taxes (35%)
80,954.00
Discontinued Operations (Net)
6,500.00
Cumulative Effect of Change in Accounting Principle (Net)
13,000.00
7,691,500.00
20,000.00
68,100.00
1,240,000.00
408,616.00
71,260.00
60,000.00
2,042,000.00
770,000.00
240,000.00
2,771,524.00
7,691,500.00

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