B. Existence of Accounts Receivable To substantiate the existence of the accounts receivable balances as at December 31, 2020 of Guipetacio Company, you have decided to send confirmation requests to customers. Below is a summary of the confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method. Customer Balance per Comments from Audit Findings Books Customers Abejo P50,000 P30,000 on January 2, Returned goods received 2021. Correct balance is January 5, 2021. 20,000. Pacturan 10,000 Your credit memo The credit memo was representing price taken up by Pacturan in adjustment dated 2021. December 29. 2020 cancels this. Badilla 48,000 You have overpriced us The complaint is valid. by P50. Correct price should be P100. Villaranda 37,500 We received the goods Term is shipping point only on January 5, 2021. shipped in 2020. Dacer 45,000 Balance was offset by our Guipetacio credited December shipment of accounts payable for your raw materials. P45,000 to record purchases. Dacer is supplier. Required: 1. If the necessary adjusting journal entry is made regarding the case of Abejo, compute for the increase/decrease in net income. 2. Compute the effect on 2020 net income of Guipetacio Company of its failure to record credit memo involving transaction with Pacturan. 3. Compute the overstatement of receivable from Badilla. 4. Compute the accounts receivable from Villaranda. 5. Prepare the adjusting journal entry to correct the receivable from Dacer.A. Classification of Receivables When examining the accounts of Palma Company, you ascertain that balance relating to both receivables and payables are included in a single controlling account (called receivables), which has a P23,050 debit balance. An analysis of the details of this account revealed the following: Items Debit Credit 1. Accounts receivable - customers P40,000 2. Accounts receivable - officers 2,500 (Current collection expected) 3. Debit balances - creditors 450 4. Expense advances to salespersons 1,000 5. Share capital subscriptions receivable 4,600 6. Accounts payable for merchandise P19,250 7. Unpaid salaries 3,300 8. Credit balance in customer accounts 2,000 9. Cash received in advance from customers 450 for goods not yet shipped 10. Expected bad debts, cumulative 500 Required: 1. Give the journal entry to eliminate the above account and to set up the appropriate accounts to replace it. 2. How should each item be reported on Palma Company's statement of financial position