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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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The following selected transactions occurred in Trouble Company during the
year ended December 31, 2020:
Gross sales (cash and credit)
Collections from credit customers, net of 2% cash
P750,000
245,000
discount
Cash sales
150,000
Uncollectible accounts written off
16,000
Sales returns and allowances
8,400
Recoveries on accounts receivable written off in prior
years (not included in cash received stated above)
5,421
At year-end, the company provides for estimated bad debt losses by crediting
Allowance for Bad Debts for 2% of its net credit sales for the year. What is the
bad debt expense for 2020?
P11,732
P14,732
P15,000
P12,000

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