Horus Company provided for doubtful accounts expense monthly at 3%of credit sales. The balance in the allowance for doubtful accounts was P1,000,000 on January 1 , 2019. During 2019, credit sales totaled P20,000,000, interim provisions for doubtful accounts were made at 3% of credit sales, P200,000 accounts were written off, and recoveries of accounts previously written off amounted to P50,000. An aging of accounts receivable was made on December 31, 2019. 1 – 60 days                                                     6,000,000                       10% uncollectible 61 – 180 days                                                 2,000,000                       20% uncollectible  181 – 360 days                                               1,500,000                       30% uncollectible  More than one year                                 500,000                        50% uncollectible                                                                   Based on the review of the “more than one year” category, additional accounts of P100,000 are to be written off on December 31, 2019. What is the year-end adjustment to the allowance for doubtful accounts on December 31, 2019? a. P900,000 debit b. 900,000 credit c. 300,000 debit d. 300,000 credit

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Horus Company provided for doubtful accounts expense monthly at 3%of credit sales. The balance in the allowance for doubtful accounts was P1,000,000 on January 1 , 2019.

During 2019, credit sales totaled P20,000,000, interim provisions for doubtful accounts were made at 3% of credit sales, P200,000 accounts were written off, and recoveries of accounts previously written off amounted to P50,000.

An aging of accounts receivable was made on December 31, 2019.

1 – 60 days                                                     6,000,000                       10% uncollectible

61 – 180 days                                                 2,000,000                       20% uncollectible 

181 – 360 days                                               1,500,000                       30% uncollectible 

More than one year                                 500,000                        50% uncollectible

                                                                 

Based on the review of the “more than one year” category, additional accounts of P100,000 are to be written off on December 31, 2019.

What is the year-end adjustment to the allowance for doubtful accounts on December 31, 2019?

a. P900,000 debit
b. 900,000 credit
c. 300,000 debit
d. 300,000 credit
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