In connection with your examination of the statements of Ringo Inc.

for the year ended December 31, 2018, you were able
to obtain certain information during your audit of the accounts receivable and related accounts.

 The December 31, 2018 balance in the Accounts Receivable control accounts is P837,900.
 An aging schedule of the accounts receivable as of December 31, 2018 is presented below:

Age Net debit Percentage to be applied after correction have

balance been made
60 days and under P387,800 1%
61 to 90 days 307,100 2%
91 to 120 days 89,800 5%
Over 120 days 53,200 Definitely uncollectible, P9,000, the remainder is
estimated to be 25% uncollectible.
P837,900

 The Allowance for Doubtful Accounts schedule I presented below:

Debit Credit Balance

January 1, 2018 P19,700
November 30, 2018 P6,100 13,600
December 31, 2018 (837,900x5%) 41,895 P55,495

 Entries made to Doubtful Accounts Expense account were:

o A debit on December 31 for the amount of the credit to the Allowance for Doubtful Accounts.
o A credit for P6,100 on November 30, 2018, and a debit to Allowance Doubtful Accounts because of a
bankruptcy. The related sales took place on October 1, 2018.
 There is a credit balance in one account receivable (61 to 90 days) of P11,000; it represents an advance on a
sales contract.

Required: Determine the following as of and for the year ended December 31, 2018:
a. Accounts receivable
b. Allowance for doubtful accounts
c. Doubtful accounts expense

Bahrain bank granted a loan to a borrower in the amount of P10,000,000 on January 1, 2017. The interest rate on the
loan is 10% payable annually starting December 31, 2017. The loan matures in 5 years on December 31, 2021. Bahrain
Bank incurs P130,900 of direct loan origination cost and P50,000 of indirect loan origination cost. In addition, Bahrain
bank charges the borrower a 5-point nonrefundable loan origination fee.

The borrower paid the interest due on December 31, 2017. However, during 2018 the borrower began to experience
financial difficulties, requiring the bank to reassess the collectability of the loan. As of December 31, 2018, the bank
expects that only P8,000,000 of the principal will be recovered. The P8,000,000 principal amount is expected to be
collected in 2 equal installments on December 31, 2020 and December 31, 2022. The prevailing interest rates for similar
type of note as of December 31, 2017 and 2018 are 155 and 16% respectively.

Required: Determine the following:

a. Interest income to be recognized in 2017
b. Carrying amount of the loan as of December 31, 2017
c. Loan impairment loss to be recognized in 2018.