Grace Company is using 0.05% of sales to compute its quarterly doubtful accounts. Sales for the 1st-4th quarters are as follows: P5,000,000, P6,000,000, P7,000,000 and P8,000,000 which were the basis of the accountant in recording the quarterly doubtful accounts. Before the publication of the 4th quarter interim reports, the auditor of the company estimated that the doubtful accounts for the year should be P50,000 using aging of accounts receivable.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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What amount should be adjusted in relation to the doubtful accounts for thefourth quarter?

Grace Company is using 0.05% of sales to compute its quarterly doubtful accounts. Sales
for the 1t-4th quarters are as follows: P5,000,000, P6,000,000, P7,000,000 and
P8,000,000 which were the basis of the accountant in recording the quarterly doubtful
accounts. Before the publication of the 4th quarter interim reports, the auditor of the
company estimated that the doubtful accounts for the year should be P50,000 using
aging of accounts receivable.
Transcribed Image Text:Grace Company is using 0.05% of sales to compute its quarterly doubtful accounts. Sales for the 1t-4th quarters are as follows: P5,000,000, P6,000,000, P7,000,000 and P8,000,000 which were the basis of the accountant in recording the quarterly doubtful accounts. Before the publication of the 4th quarter interim reports, the auditor of the company estimated that the doubtful accounts for the year should be P50,000 using aging of accounts receivable.
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