PROBLEM 3Errol Company estimates its allowance for doubtful accounts using percentage of sales method. The totalsales of the company for 2021 amounted to P10,000,000, P3,000,000 of which are sold for cash. Erroldetermined that 12% is an appropriate estimate of bad debts expense.Errol also provided the following information:• Write-offs during the period amounted to P500,000- Allowance for doubtful accounts at the beginning of 2021 amounted to P285.000• Recoveries of amounts previously written-off amounted to P120.000• The accounts receivable as of December 31, 2021 is P5,000.000How much is the allowance for doubtful expense account as of December 31, 2021?

Solution: Balance in allowance for doubtful expense as of Dec 31, 2021 = Beginning Balance of…

Answered: PROBLEM 3 Errol Company estimates its…

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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