Questions:a. What is the correct bad debt expense for the year assuming that the allowance for doubtful accounts had a balance of P120,500 as of January 1, 2022?b. Your proposed adjusting journal entry to correct the balance of allowance for bad debts would include a net debit or credit of? (just indicate the amount) The client's accountant also provided you the following aging of accounts receivable, along withthe company's policy of providing allowance for doubtful accounts:AgeCurrent (60 days)1-60 days past due61-120 days past dueMore than 120 days past dueAmountP1,650,0001,100,000750,000500,000% Uncollectible6%12%24%The company has recorded bad debt expense of P75,000 for the year. During the year, however,it had a P25,000 recovery of a previously written-off account and a P135,000 write-off ofuncollectible accounts (see reconciliation above). In line with your audit of Charlie Marupok Corporation receivable balances as of December 31,2022, the client's accountant provided you the following SL to GL reconciliation:Balance per Subsidiary Ledger1. Charge for consignment sales, goods delivered on (200,000)December 5, 2022. Consignee's response to inquiryindicated that the goods are still unsold.2. Charge for deliveries on December 29, goods still in-transit under FOB Shipping point term3. Charge for deliveries on December 30, goods still in-transit under FOB Destination term5. Subscriptions receivable from shareholders due March2, 2024 (dated March 2, 2022)6. Deposits on long-term contracts (dated September 10,2022)4. Charge for goods delivered on January 2, 2023 in (20,000)transit as of December 31, 2022, under FOB destinationterms.7. Credit balance in customer accountsP4,000,0008. Credit memos for merchandise returns for invoiceoriginally dated October 1050,000Balance per General Ledger(60,000)120,000400,000(90,000)(12,000)9. Portion of a November 15 outstanding invoice to acustomer, returned by the customer on December 31,2022.10. Cash advances to an affiliated company11. Write-off of a receivable from customer who recently (135,000)declared bankruptcy. Outstanding invoices were datedApril 5 (P60,000), and July 20, 2022 (P75,000)(100,000)350,000P4,303,000

It has been assumed that the bankruptcy case isn't included in the ending statement provided by…

Questions: a. What is the correct bad debt expense for the year assuming that the allowance for doubtful accounts had a balance of P120,500 as of January 1, 2022? b. Your proposed adjusting journal entry to correct the balance of allowance for bad debts would include a net debit or credit of? (just indicate the amount)

Questions: a. What is the correct bad debt expense for the year assuming that the allowance for doubtful accounts had a balance of P120,500 as of January 1, 2022? b. Your proposed adjusting journal entry to correct the balance of allowance for bad debts would include a net debit or credit of? (just indicate the amount)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 8P

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