1. In preparing the draft financial statements of Candice Company for the year ended December 31, 2018, an analysis of the Accounts Receivable account revealed the following:

Trade accounts receivable (current)

P 2,000,000

Past due trade accounts

450,000

Uncollectible accounts

75,000

Credit balances in customer's accounts

(80,000)

Trade notes receivable dishonored

220,000

Due from consignee

350,000

Total

P 3,015,000

• The uncollectible accounts were identified as worthless accounts.

• The due from consignee accounts represents the cost of the goods sent out to Grace Company, the consignee. Of the goods sent out, Grace Company was able to sell goods costing for P100,000 for P150,000. A 10% commission was charged by Grace Company as per agreement with Candice Company and remitted the balance. The cash was received in January 2019.

• The balance of the allowance for doubtful accounts before adjustment is a credit of P45,000. Based on past experience the allowance should be maintained to equal 6% of trade receivables, net of amount due from the consignee who is bonded. Candice Company has not provided yet for the 2018 bad debt expense.

The allowance for doubtful accounts after adjustment is

a. 160,200

b. 164,700

c. 168,300

d. 169,200