Problem 2 In your audit of MENDOZA COMPANY for the past calendar year, you find the following accounts: ACCOUNTS RECEIVABLES Jan. 1, 2002 P 800,000 Jan. - Dec. 1992 collections P 5,900,000 Jan. - Dec . Sales 6,300,000 Jan. - Dec. write-off 100,0 00 ALLOWANCE FOR BAD DEBTS Jan. - Dec . Write-off of Jan . 1, 2002 P 95,000 last year's receivables P 85,000 Dec. 31 provisions 315,000 Write-off of this year's Receivables 15,000 In your examination, you find that the balance of Accounts Receivable represents sales of the current audit year only; that credit balances in the subsidiary ledger for accounts receivable totaled P80,000; and that the current year's provision for bad debts expense was 5% of sales (as compared with 413% last year, 4% of the year before, and 312% the next previous year). Sequential to aging the accounts receivable, you and the company's treasurer agree on an additional write-off of P50,000, and P300,000 as the probable loss to be sustained on collection of the accounts receivable balance