Exercise 3 1 An analysis of the accounts receivable of Grammar Inc. shows the following information: I_ More than 360 days past due 100: 000 19 Before any adjustments were made, Grammar's allowance for doubtful accounts had a balance of P80,000. 1. Determine the required balance of Grammar's doubtful accounts at the end of the reporting period. 2. Determine the doubtj'ul accounts expense Grammar should recognize during the period. 3. Determine the net realizable value of Grammar '3 accounts receivable at the end of the period. EXERCISE 3-1 (SOLUTION GUIDE) BALANCE H AGE (IN PHP) %COLLECTIBLE %UNCOLLECTIBLE |ALLOWANCE CURRENT 3,500,000 99.50% 1 TO 30 DAYS PAST DUE 2,000,000 98.00% 31 TO 60 DAYS PAST DUE 1,200,000 95.00% 61 TO 90 DAYS PAST DUE 1,000,000 92.00% 91 TO 120 DAYS PAST DUE 800,000 85.00% 121 TO 180 DAYS PAST DUE 400,000 70.00% 181 TO 360 DAYS PAST DUE 200,000 50.00% MORE THAN 360 DAYS PAST DUE 100,000 0.00% ALLOWANCE FOR DOUBTFUL ACCOUNTS 2 SHOULD BE CURRENT DOUBTFUL ACCOUNT EXPENSE 3 ACCOUNTS RECEIVABLE ALLOWANCE FOR DOUBTFUL ACCOUNTS NET REALIZABLE VALUE