The following information were taken from the balance sheet of Juan Repair shop as of March 31, 2017: Cash P70,000; Notes Receivable, P10,000; supplies, P5,000; Prepaid Rent,P20,000; total non-current assets, P80,000; Total Liabilities and Capital, P200,000. How much is the Accounts Receivable?Select one:a.P 120, 000b.Answers not given.c.P 15,000d.P 25,000
Question
The following information were taken from the balance sheet of Juan Repair shop as of March 31, 2017: Cash P70,000; Notes Receivable, P10,000; supplies, P5,000; Prepaid Rent,P20,000; total non-current assets, P80,000; Total Liabilities and Capital, P200,000. How much is the Accounts Receivable?Select one:a.P 120, 000b.Answers not given.c.P 15,000d.P 25,000
Solution
To find the Accounts Receivable, we need to calculate the total assets first.
Total assets = Current assets + Non-current assets
Current assets include Cash, Notes Receivable, Supplies, and Prepaid Rent. So,
Current assets = Cash + Notes Receivable + Supplies + Prepaid Rent Current assets = P70,000 + P10,000 + P5,000 + P20,000 = P105,000
Total assets = Current assets + Non-current assets Total assets = P105,000 + P80,000 = P185,000
According to the balance sheet equation, Total Assets = Total Liabilities and Capital. Given that Total Liabilities and Capital is P200,000, there is a discrepancy of P15,000 (P200,000 - P185,000).
This discrepancy is the Accounts Receivable. So, the Accounts Receivable is P15,000.
Therefore, the correct answer is c. P15,000.
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