decided to use the accrual basis. On December 31, 2021, the bearing an interest of 12% payable at maturity. Problem 14-34 (IAA) account balances are: Cash Purchases Expenses Notes payable Sales Share capital 840,000 4,200,000 560,000 200,000 4,400,000 1,000,000 1. Merchandise inventory on December 31, at cost, P500,000 2. On December 31, accounts receivable amounted to P100,000 and accounts payable totaled P80,000. 3. Accrued expenses on December 31, P20,000. 4. The purchases included merchandise in the amount of P10,000 bought for the president. The president had not reimbursed the entity. 5. The sales included P25,000 deposit given by a customer for merchandise to be delivered in 2022. 6. It is estimated that 5% of the outstanding accounts receivable on December 31 may turn out to be uncollectible. 7. Expenses included the following: a. P25,000 for office supplies of which P5,000 is unused as of December 31. b. P100,000 for the purchase of equipment on July 1, 20 insurance policy dated October 1, 2021.

decided to use the accrual basis. On December 31, 2021, the bearing an interest of 12% payable at maturity. Problem 14-34 (IAA) account balances are: Cash Purchases Expenses Notes payable Sales Share capital 840,000 4,200,000 560,000 200,000 4,400,000 1,000,000 1. Merchandise inventory on December 31, at cost, P500,000 2. On December 31, accounts receivable amounted to P100,000 and accounts payable totaled P80,000. 3. Accrued expenses on December 31, P20,000. 4. The purchases included merchandise in the amount of P10,000 bought for the president. The president had not reimbursed the entity. 5. The sales included P25,000 deposit given by a customer for merchandise to be delivered in 2022. 6. It is estimated that 5% of the outstanding accounts receivable on December 31 may turn out to be uncollectible. 7. Expenses included the following: a. P25,000 for office supplies of which P5,000 is unused as of December 31. b. P100,000 for the purchase of equipment on July 1, 20 insurance policy dated October 1, 2021.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 23PC

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