Russia Company provided the following information on December 31, 2021: Jan. 15, 2022 - P3,000,000 of accounts receivable was written off due to the bankruptcy of a major customer; Feb. 14, 2022 - A shipping vessel of Russia with carrying amount of P5,000,000 was completely lost at sea because of a hurricane; March 11, 2022 - A court case involving Russia as the defendant was settled and the entity was obligated to pay the plaintiff P1,500,000. Russia previously recognized a P1,000,000 liability for the suit because management deemed it probable that the entity would lose the case; March 25, 2022 - One of Russia's factories with a carrying amount of P15,000,000 was completely razed by forest fires that erupted in its vicinity. The management of the entity completed the draft of the financial statements for 2021 on February 10, 2022. On March 20, 2022, the board of directors authorized the financial statements for issue. The entity announced the profit and other selected information on March 22, 2022. The financial statements were made available to shareholders on April 2, 2022 at the annual shareholders' meeting where the financial statements were approved. The financial statements were filed with the regulatory agency the very next day. What is the adjusting entry to record the event on Jan. 15, 2022? A. Debit Doubtful accounts expense and credit Allowance for doubtful accounts for 3,000,000 B. Debit Allowance for doubtful accounts and credit Accounts receivable for 3,000,000 C. An adjusting entry is not necessary because this is not an adjusting event. D. None of the above
Russia Company provided the following information on December 31, 2021: Jan. 15, 2022 - P3,000,000 of accounts receivable was written off due to the bankruptcy of a major customer; Feb. 14, 2022 - A shipping vessel of Russia with carrying amount of P5,000,000 was completely lost at sea because of a hurricane; March 11, 2022 - A court case involving Russia as the defendant was settled and the entity was obligated to pay the plaintiff P1,500,000. Russia previously recognized a P1,000,000 liability for the suit because management deemed it probable that the entity would lose the case; March 25, 2022 - One of Russia's factories with a carrying amount of P15,000,000 was completely razed by forest fires that erupted in its vicinity. The management of the entity completed the draft of the financial statements for 2021 on February 10, 2022. On March 20, 2022, the board of directors authorized the financial statements for issue. The entity announced the profit and other selected information on March 22, 2022. The financial statements were made available to shareholders on April 2, 2022 at the annual shareholders' meeting where the financial statements were approved. The financial statements were filed with the regulatory agency the very next day.
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