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Jirah Company has the following data for 2010:
Sales (80% credit) - 1,500,000
Accounts Receivable (January 1) - 200,000
Accounts Receivable (December 31) - 250,000
Accounts written off during 2010 - 20,000
Sales returns and allowances amounted to 2% of credit sales. During the year, P5.000 of the accounts written off is collected. The company uses 5% of outstanding accounts receivable in estimating bad debts which is accounted for under the allowance method.
Problem 1: How much is the bad debts expense recognized in 2010?
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