Reference no: EM132973175
Question - Nabangsit Corporation reported the following receivables on December 31, 2020: Accounts receivable, net of P520,000 allowance for doubtful accounts P3,840,000 Interest receivable 190,000 Notes receivable 4,000,000 Additional information: The notes receivable comprised of the following: P3,000,000 note dated March 31, 2020, with principal and 8% interest payable on March 31, 2021. P1,000,000 note dated October 31, 2020, with principal and interest payable on October 31, 2021. During 2021, sales revenue totaled P21,200,000, cash collected from customers amounted to P19,800,000, and P410,000 in accounts receivable were written off. All sales are made on credit basis. Doubtful accounts expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable.
Required -
1. What amount should be reported as interest income for 2021? a. P80,000 b. P240,000 c. P60,000 d. P110,000
2. What amount should be reported as doubtful accounts expense for 2021? a. P410,000 b. P425,000 c. P110,000 d. P535,000
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