You are assigned to audit Bonifacio Inc. for the year ending June 30, 2014. Prior to any adjustments you were able to extract the following balances from the client’s records:Accounts receivable, control account P221,250Allowance for doubtful accounts (7,500)Amortized cost P213,750 Accounts receivable, subsidiary records60 days old and below61 - 120 days> 120 daysCredit balanceP110,62566,37551,750(7,500)The credit balance in the accounts receivable represents collection from a customer whoseaccount had been written off as uncollectible in the previous year.The Accounts Receivable were circularized as at June 30, 2014 and the followingexceptions/replies have not been disposed off at the date of your examination.Balances Comments from Customers Audit FindingsP4,000 This balance for invoicedated June 5, 2014 waspaid in June 29, 2014.CustomerAyeBonifacio Inc. receivedmailed check on July 2,2014.Bee13,800 The Balance for invoiceBonifacio Inc. crediteddated June 1 was offset byour June 10, shipment oftires.accounts payable forP13,800 to recordpurchase of tires.16,600 The above balance forinvoice dated April 20 hasbeen paid.20,000 The records show a biggerbalance, please check.The payment was creditedto customer Dee.SeeDeeA new confirmation wasmailed.All outstanding invoices toDee are dated June.Eee11,600 We do not owe BonifacioInc. anything as the goodswere received July, 2014,The shipment costingP8,000 was made on June29, 2014 and the goodswere not included inFOB Destination.recording the June 30,2014 inventory summary.Eff14,000 Our deposit of P18,000should cover this balanceBonifacio Inc. hadpreviously credited thedeposit to sales.The P14,000 balance wasfor a June shipment.6,000 Amount okay. Since this is Goods cost P4,400 andwere appropriatelyJeehon consignment, we willremit payment upon selling included in Bonifacio Inc.'sthe goods.inventory.The amount is included inthe "below 60 days"receivables.The CM dated April 31,2014 was recorded byBonifacio Inc. in July 2014.The amount is for an April15 sale invoice.Eych1,200 CM No. 8118 cancels thisbalance. Based on your discussion with the client, the following estimated rates are appropriate forcomputing the uncollectible accounts:60 days and below61 to 120 daysMore than 120 days2%10%20%Requirements:1. What is the adjustment to the controlling account appropriate for customer's See account?2. What is the adjusted accounts receivable account balance?3. What is the required allowance for bad debts as of June 30, 2014?4. Assuming that there were no other entries affecting the allowance account during thefiscal year, how much is the bad debt expense?

Name: You are assigned to audit Bonifacio Inc. for the year ending June 30,
Uploaded: 2024-03-04T10:43:15.000Z
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Description: You are assigned to audit Bonifacio Inc. for the year ending June 30, 2014. Prior to any adjustments you were able to extract the following balances from the client’s records:Accounts receivable, control account P221,250Allowance for doubtful account