Problem 16-18 (IAA) Emerald Company reported net income for 2021 at P1,550,000 hefore any adjustments. Upon inspection of the records, the following facts were discovered for the year ended December 31, 2021. A fire insurance premium of P40,000 was paid and charged as insurance expense for 2021. The fire insurance policy covers one year from April 1, 2021. * Inventory on January 1, 2021 was understated by P80,000. Inventory on December 31, 2021 was understated by P120,000. Taxes of P60,000 for the fourth quarter of 2021 were paid on January 20, 2022 and charged as expense of 2022. * On December 5, 2021 a cash advance of P100,000 by a customer was received for goods to be delivered in January 2022. The amount of P100,000 was credited to sales. What amount should be reported as net income for 2021? a. 1,440,000 þ. 1,470,000 c. 1,540,000 d. 1,600,000

Problem 16-18 (IAA) Emerald Company reported net income for 2021 at P1,550,000 hefore any adjustments. Upon inspection of the records, the following facts were discovered for the year ended December 31, 2021. A fire insurance premium of P40,000 was paid and charged as insurance expense for 2021. The fire insurance policy covers one year from April 1, 2021. * Inventory on January 1, 2021 was understated by P80,000. Inventory on December 31, 2021 was understated by P120,000. Taxes of P60,000 for the fourth quarter of 2021 were paid on January 20, 2022 and charged as expense of 2022. * On December 5, 2021 a cash advance of P100,000 by a customer was received for goods to be delivered in January 2022. The amount of P100,000 was credited to sales. What amount should be reported as net income for 2021? a. 1,440,000 þ. 1,470,000 c. 1,540,000 d. 1,600,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 61E

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