Answer Happy

Sasha Novikov had P2,500,000 for his beginning balance of
accounts receivable for 2022. It is the company’s policy to record
bad debts at 2.5% up until the end of 2021. However, moving
forward, the company moved to an aging policy based on the
following table:
Days outstanding
Uncollectability rate
30-90 days
2.5%
91-180 days
5%
>180 days
15%
During the year, Sasha rendered P7,250,000 worth of services and
received P8,000,000 from customers. Of the total accounts
receivable at year-end, 22.5% were outstanding for less than a
month, 20% were outstanding for 1 month, 5% were outstanding for 2
months, another 5% were outstanding for 3 months, 15% were
outstanding for 4 months, 5% were outstanding for 5 months, 12.5%
were outstanding for 6 months, and the remaining were outstanding
for more than 6 months.
1. How much was Sasha Novikov’s adjusted accounts receivable on
December 31, 2022?
2. How much was the adjusted balance of Sasha Novikov’s
allowance for bad debts on December 31, 2022?
3. How much was the adjustment to bad debts expense? (Indicate
before the answer if debit or credit: Eg. “Debit 50,000” or “Credit
50,000”)
4. How much was the unadjusted balance of allowance for bad
debts?