In the course of your audit of the trade receivables of Macaroni Corp. for the fiscal year ended September 30, 2021, you sent positive confirmation letters to a selected sample of receivables. The confirmation replies monitor is shown below:

Customer	Amount per Books	Customer's Reply Note	Audit Note
Soup Corp.	P52,000	"Our records shows only P34,000 per invoice number 120113."	Invoice no. 120123 amounting to P18,000 was for goods delivered on September 29 and were still in transit as of the balance sheet date. Goods were delivered FOB Suppliers' Warehouse.
Salad Inc.	88,000	"The amount is overstated"	The overstatement was due to a pricing error in invoice no. 120100 dated July 20. The approved price per sales order no. 90891 was at P18 per unit. The company however, charged Salad Inc. in the sales invoice at P22 per unit.
Cheese Co.	72,000	"The amount is ok"	The amount is for an invoice no. 120094 dated August 30 for goods delivered on the same day FOB Shipping Point. The sales agreement included a provision for a two-months "service-type warranty". The goods would have been sold without the warranty at P60,000 while the two-month warranty would have been sold separately at P20,000,
Elbow Co.	132,000	"The amount is ok. Out of 6,000 units, 2,200 remains on hand."	Elbow Co. is a consignee. The amount was for invoice no. 120050 dated August 5 for 6,000 units delivered on the same date. Elbow Co. paid freight cost upon receipt of the goods at P4,060. Commission rate agreed upon is 15%.
Ribbon Inc.	38,000	"Invoice no. 110912 should have been cancelled by a return."	Invoice no. 110912 dated April 10, amounting to P12,000 has been cancelled by a credit memo no. 11234 for sales returns dated April 23. Investigation revealed that while the credit memo was recorded in the general books, the same was not posted in the subsidiary ledger.
Spaghetti Inc.	66,000	"Our cash advance should have covered any balances."	The amount is for invoice no. 120011 dated July 12. Further investigation revealed that on July 10 the company received P90,000 in cash advances from Spaghetti Inc. per Official Receipt No. 129239. The cash advance was recorded however as cash sales.
Pesto Inc.	32,000	No reply (2 confirmation letters sent)	The amount is for an invoice dated August 4, 2020 and therefore has already been outstanding for more than a year. The management has approved write-off of this amount upon the auditor's recommendation.

Additional information:

• The balances per general ledger were as follows:

Accounts receivable	P1,432,000
Allowance for bad debts	(35,930)

• The aging schedule prepared by the client based on the subsidiary records (before any adjustments resulting from the confirmation monitoring) along with the company's estimate of the portion doubtful of collection revealed the following:

Age Amount Current (1-60 days) 420,000 61-120 days old 550,000 5% 121-180 days old 288,000 8% More than 180 days 189,000 15%