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Hello Kitty, a San Rio Franchise, uses the statement of financial position approach to estimate the impairment lost of receivable. At year-end, an aging of
Hello Kitty, a San Rio Franchise, uses the statement of financial position approach to estimate the impairment lost of receivable. At year-end, an aging of the accounts receivable produced the following five groupings: Group A Not yet due Php 1,095,000 1 to 30 days Group B 531,000 past due Group C 31 to 60 days past due 98.800 61 to 90 Group 62,400 D days past due Over 90 days Group E 13,200 past due Total Php 1,800,400 On the basis of experience, the company estimated the percentage probably uncollectible for the above age groups to be as follows: Group A, 1.25%; Group B, 2.00%; Group C, 6.50%; Group D, 30%; Group E, 55%. The Allowance for Doubtful Accounts before adjustment at December 31, 2020 showed a balance of Php 19.850. Required: 1. Compute the required balance of the Allowance for Doubtful Accounts at December 31, using the aging of accounts receivable method. (5pts) 2. Prepare the adjusting entry to record bad debts expense at December 31, 2020. (2pts) 3. On January 10,2021, Hello Kitty conclude that a customer's Php 4,875 receivable (created in 2020) is uncollectible and the account should be written off. Prepare the journal entry required on January 10 to write-off this account. (2 pts)
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