1. Happy birthday Company bought a building on November 1, 2017 with a cost amounting to P5,000,000. The accumulated depreciation as of December 31, 2019 is 650,000. What is the useful life assuming that the building has a P200,000 residual value.

a.10 years

b.15 years

c.20 years

d.16 years

2. Accounts Receivable at the end of the year was P2,000,000. Allowance for bad debts has a credit of P50,000 at the start of the year and P20,000 was recovered. The Company has a policy of having 2% of the accounts receivable as an allowance. How much is the bad debt expense during the year?

a.0

b.30,000

c.40,000

d.20,000