Problem 8

At the beginning of current year, Jamin Company had a credit balance of 260,000 in the allowance for uncollectible accounts. Based on past experience, 2% of credit sales would be uncollectible. During the current year, the entity wrote off P325,000 of uncollectible accounts. Credit sales for the year totaled P9,000,000.

1. What is the uncollectible accounts expense for the year?

2. What amount should be reported as allowance for uncollectible accounts at year-end?