Crispin Santos started a retail merchandise business on January 1, 2021. During the year ended December 31, 2021, the entity paid trade creditors P2,000,000 and suffered a net loss of P350,000. The ledger account preclosing balances on December 31, 2021 included the following: · Accounts receivable- P600,000 · Accounts payable- P750,000 · Capital (total investment in cash)- P2,000,000 · Expenses (paid in cash)- P100,000 · Merchandise (unadjusted debit balance)- P700,000 There were no withdrawals. All sales and purchases were on credit. The merchandise account is debited for purchases and credited for sales. What is the amount of purchases for the year? a. P2,800,000 b. P1,950,000 c. P2,750,000 d. P2,000,000
Crispin Santos started a retail merchandise business on January 1, 2021. During the year ended December 31, 2021, the entity paid trade creditors P2,000,000 and suffered a net loss of P350,000. The ledger account preclosing balances on December 31, 2021 included the following: · Accounts receivable- P600,000 · Accounts payable- P750,000 · Capital (total investment in cash)- P2,000,000 · Expenses (paid in cash)- P100,000 · Merchandise (unadjusted debit balance)- P700,000 There were no withdrawals. All sales and purchases were on credit. The merchandise account is debited for purchases and credited for sales. What is the amount of purchases for the year? a. P2,800,000 b. P1,950,000 c. P2,750,000 d. P2,000,000
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter3: Basic Accounting Systems: Accrual Basis
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8. Crispin Santos started a retail merchandise business on January 1, 2021. During the year ended December 31, 2021, the entity paid trade creditors P2,000,000 and suffered a net loss of P350,000. The ledger account preclosing balances on December 31, 2021 included the following:
·
· Accounts payable- P750,000
· Capital (total investment in cash)- P2,000,000
· Expenses (paid in cash)- P100,000
· Merchandise (unadjusted debit balance)- P700,000
There were no withdrawals. All sales and purchases were on credit. The merchandise account is debited for purchases and credited for sales. What is the amount of purchases for the year?
a. P2,800,000
b. P1,950,000
c. P2,750,000
d. P2,000,000
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