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before write-off. (Write-off of the year was P20,000) No.2: P5,000 from accounts written off in a year which had a net loss before write-off of P36,

before write-off. (Write-off of the year was P20,000) No.2: P5,000 from accounts written off in a year which had a net loss before write-off of P36,

FINANCIAL ACCOUNTING
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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Recovery of bad debt written off by a taxpayer:

No.1: P20,000 from accounts written off in a year which had a net income of

P200,000 before write-off. (Write-off of the year was P20,000)

No.2: P5,000 from accounts written off in a year which had a net loss before

write-off of P36,000. (Write-off for the year was P5,000)

No.3: P10,000 from accounts written off in a year which had a net income of

P8,000 before write-off. (Write-off for the year was P8,000)

The income from the bad debt recovery is:

a. P35,000

b. P20,000

c. P26,000

d. P30,000

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