Determine the following as a result of your audit: (Please show your solution) 1. What is the correct gross balance of Accounts receivable as of December 31? 2. What is the balance of allowance for doubtful accounts as of December 31? 3. How much is the doubtful accounts expense in 2020? 4. What is the proposed adjusting journal entry to adjust the balance of allowance will include accredit to allowance of?

% CASE 4 In connection with your examination of the financial statements of Twice Inc. for the year ended December 31, 2020, you were able to obtain certain information during your audit of the accounts receivable and related accounts. a. The December 31, 2020 net debit balance in the Accounts Receivable control accounts is P1,230,000. b. An aging schedule of the accounts receivable as of December 31, 2020 is presented below: % in the net debit balance uncollectible Age (before adjustments) to applied 30 days and below 40% 31 to 60 days 15% 61 to 90 days 12% 10% 91-120 days 8% 20% Over 120 days 25% 30% 1% 5% You were able to obtain the following information with respect to specific customer accounts included in Twice's accounts receivable control account: c. A purchased of goods on December 28 under freight term FOB Shipping point was recorded by the accountant as follows. Purchases 23,000 Accounts receivable 23,000 Further inquiries revealed that the goods are still in transit as of December 31, 2020. d. A confirmation of a customer account revealed the following items: Customer Per books Per confirmation Remarks The invoice dated 11/10/20 was erroneously priced at Sana 33,250 32,000 P33.25, agreed price per customer sales invoice is P32. The difference was due to invoice dated 12/15/20 was not received by Mina as the goods were damaged by fire in the Mina loading dock of Jihyo Shipping, the logistic company hired by Twice to deliver the goods. Twice paid P200 32,000 30,000 freight. Terms FOB Destination. The difference was due to the invoice dated 12/27/20. Dahyun Goods have not been received by Dahyun yet as of 56,700 46,000 12/31/20. Term of sale FOB Shipping point. d. A confirmation of a customer account revealed the following items: Customer Per books Per confirmation Remarks Sana The invoice dated 11/10/20 was erroneously priced at 33,250 32,000 P33.25, agreed price per customer sales invoice is P32. The difference was due to invoice dated 12/15/20 was not received by Mina as the goods were damaged by fire in the Mina loading dock of Jihyo Shipping, the logistic company hired by Twice to deliver the goods. Twice paid P200 32,000 30,000 freight. Terms FOB Destination. The difference was due to the invoice dated 12/27/20. Dahyun Goods have not been received by Dahyun yet as of 56,700 46,000 12/31/20. Term of sale FOB Shipping point. Chaeyoung is liquidating for few months. Chaeyoung informed Twice that only 50% will be paid from the Chaeyoung available resources of Chaeyoung as of December 31. The credit and collection manager issued a credit memo for the write off of the uncollectible accounts. The invoice of 12,000 Chaeyoung was dated June 15, 2020. e. Sales made on account last October 15, 2020 in the amount P38,000 was paid by the customer on December 5, 2020 and was recorded twice by Twice accounting department. f. Your test of journal entries was made in the Doubtful Accounts Expense account during the period: A debit on April 30 and December 31 for the amount of the credit to the Allowance for Doubtful Accounts representing provisions during the period. A credit for P10,000 on November 30, 2020, and a debit to Allowance for Doubtful Accounts because of a bankruptcy. The related sales took place on October 28, 2020. g. The Allowance for Doubtful Accounts schedule is presented below: Debit Credit Balance January 1, 2020 P12,725 April 30, 2020 P10,250 22,975 November 30, 2020 P10,000 12,975 December 31, 2020 7,500 P20,475