Problem 4 Ahw Tsu prepares financial statements on the cash basis. The statement of financial position on December 31, 2020 and the income statement for the current year are as follows: Cash Furniture and equipment P1,500,000 2,500,000 P4,000,000 Note payable Capital: Balance, January 1 Add: Net income P1,000,000 P1,600,000 2,250,000 P3,850,000 850,000 Less: Withdrawals 3,000,000 P4,000,000 Professional fees Expenses: Rent Supplies Other expenses Net income P5,000,000 P1,200,000 800,000 750,000 2,750,000 P2,250,000 It was decided that the financial statements should be prepared on the accrual basis. Relevant information is as follows: 1) The furniture and equipment were acquired on July 1, 2019. The estimated life is 10 years. 2) The 12% promissory note us dated April 1, 2020 and matures in one year. Interest is payable on the date of maturity. 3) The accounts receivable as at December 31, 2020 and 2019 is P750,000 and P500,000, respectively. 4) Accrued rent on December 31, 2020, P100,000. 5) Unused office supplies as at December 31, 2020 and 2019 is P250,000 and P300,000, respectively.
Problem 4 Ahw Tsu prepares financial statements on the cash basis. The statement of financial position on December 31, 2020 and the income statement for the current year are as follows: Cash Furniture and equipment P1,500,000 2,500,000 P4,000,000 Note payable Capital: Balance, January 1 Add: Net income P1,000,000 P1,600,000 2,250,000 P3,850,000 850,000 Less: Withdrawals 3,000,000 P4,000,000 Professional fees Expenses: Rent Supplies Other expenses Net income P5,000,000 P1,200,000 800,000 750,000 2,750,000 P2,250,000 It was decided that the financial statements should be prepared on the accrual basis. Relevant information is as follows: 1) The furniture and equipment were acquired on July 1, 2019. The estimated life is 10 years. 2) The 12% promissory note us dated April 1, 2020 and matures in one year. Interest is payable on the date of maturity. 3) The accounts receivable as at December 31, 2020 and 2019 is P750,000 and P500,000, respectively. 4) Accrued rent on December 31, 2020, P100,000. 5) Unused office supplies as at December 31, 2020 and 2019 is P250,000 and P300,000, respectively.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter7: Introduction To Financial Statement Analysis
Section: Chapter Questions
Problem 31P
Related questions
Question
REQUIREMENT:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning