How much is ATHENS' accrual basis purchases during the year? ATHENS Company began operations in 2021. The company purchases computer equipment from manufacturers and then sells them to retailstores. During the year, the bookkeeper only used a check register to record all cash receipts and disbursements. No other journals were used.The following is a summary of cash receipts and disbursements made by ATHENS during the year:Cash receipts:• Sale of ordinary shares, P50,000• Collections from customers, P320,000· Borrowed from a local bank on April 1, signed a note requiring principal and interest at 12% to be paid on March 31, 2022, P40,000Cash disbursements:• Purchase of merchandise, P220,000• Payment of salaries, P80,000• Purchase of equipment, P30,000Payment of rent for the office building. P14,000• Payment of miscellianeous expenses, P10,000As a CPA who recently passed the board examination, you were engaged to prepare the financial statements at December 31, 2021. Thefollowing additional information was provided to you:a. Amounts still owed by customers to ATHENS at year-end, P22,000. Of this amount, it was anticipated that P3,000 would be uncollectible.There were no actual bad debts written off in 2021.b. Amounts still owed by ATHENS to suppliers of merchandise, P30,000.c. Cost of merchandise still on hand at year-end, P50,000.d. Salaries owed to employees at year-end, P5,000.e. On December 1, P3,000 rent was paid to the owner of the office building used by the ATHENS. This represented rent for the periodDecember 2021 to February 2022.f. The equipment was purchased on January1 and had a 10-year useful life with no salvage value. Straight-line method of depreciation wasused.

ATHENS' accrual basis purchases during the year = Cash paid for purchases + amount owed to supplier…

ATHENS Company began operations in 2021. The company purchases computer equipment from manufacturers and then sells them to retail stores. During the year, the bookkeeper only used a check register to record all cash receipts and disbursements. No other journals were used. The following is a summary of cash receipts and disbursements made by ATHENS during the year: Cash receipts: • Sale of ordinary shares, P50,000 • Collections from customers, P320,000 • Borrowed from a local bank on April 1, signed a note requiring principal and interest at 12% to be paid on March 31, 2022, P40,000 Cash disbursements: • Purchase of merchandise, P220,000 • Payment of salaries, P80,000 • Purchase of equipment, P30,000 • Payment of rent for the office building, P14,000 • Payment of miscellaneous expenses, P10.000 As a CPA who recently passed the board examination, you were engaged to prepare the financial statements at December 31, 2021. The following additional information was provided to you: a. Amounts still owed by customers to ATHENS at year-end, P22,000. Of this amount, it was anticipated that P3,000 would be uncollectible. There were no actual bad debts written off in 2021. b. Amounts still owed by ATHENS to suppliers of merchandise, P30,000. c. Cost of merchandise still on hand at year-end, P50,000. d. Salaries owed to employees at year-end, P5,000. e. On December 1, P3.000 rent was paid to the owner of the office building used by the ATHENS. This represented rent for the period December 2021 to February 2022. f. The equipment was purchased on January1 and had a 10-year useful life with no salvage value. Straight-line method of depreciation was used.

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 46P: Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and...