Sawi Ak Co. acquires copyright from authors, paying advance royalties in some cases and in others, paying royalties within 30 days from year end. Sawi Ak Co. reported royalty expense of P375,000 for the year ended December 31, 2020. The following data are included in the corporation’s balance sheet, 2019 and 2020, respectively: Prepaid royalties- P60,000; P50,000 Royalties payable- P75,000; P90,000 Under cash basis, what amount of royalty expense should be reported in 2020 profit or loss? P380,000 P375,000 P400,000 P350,000
Sawi Ak Co. acquires copyright from authors, paying advance royalties in some cases and in others, paying royalties within 30 days from year end. Sawi Ak Co. reported royalty expense of P375,000 for the year ended December 31, 2020. The following data are included in the corporation’s balance sheet, 2019 and 2020, respectively: Prepaid royalties- P60,000; P50,000 Royalties payable- P75,000; P90,000 Under cash basis, what amount of royalty expense should be reported in 2020 profit or loss? P380,000 P375,000 P400,000 P350,000
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
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Sawi Ak Co. acquires copyright from authors, paying advance royalties in some cases and in others, paying royalties within 30 days from year end. Sawi Ak Co. reported royalty expense of P375,000 for the year ended December 31, 2020. The following data are included in the corporation’s balance sheet, 2019 and 2020, respectively: Prepaid royalties- P60,000; P50,000 Royalties payable- P75,000; P90,000 Under cash basis, what amount of royalty expense should be reported in 2020 profit or loss?
P380,000
P375,000
P400,000
P350,000
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