Mari Company sells direct to retail customers and also to wholesalers. On January 1,

2017 the balance of the retail accounts receivable was Php 418,000 while the

allowance for doubtful accounts with respect to retail customers was a credit of

Php15,200.

The following summary pertains only to retail sales since 2014:

Credit Sales Doubtful Accounts Doubtful Accounts

Written Off Recoveries

2014 Php 2,220,000 Php52,000 Php4,300

2015 2,450,000 59,000 7,500

2016 2,930,000 60,000 7,200

2017 3,000,000 62,000 8,400

Doubtful accounts are provided for as a percentage of credit sales. The accountant

calculates the percentage annually by using the experience of the three years prior to

the current year. The formula is doubtful accounts written off less recoveries expressed

as a percentage of the credit sales for the same period. Total collections from

customers amounted to Php2,760,400. This amount included Php50,000 for which the

goods are to be delivered next year. During the year, the company recorded the bad

debts written off as bad debts expense.

Questions:

1. The percentage to be used to compute the allowance for bad debts on December

31, 2017 is ________.

2. How much is the doubtful accounts expense for 2017?

3. The doubtful accounts expense for 2017 is overstated by _________.

4. The ledger balance of the accounts receivable after the necessary adjustments

on December 31, 2017 was a debit of ________.