Problem 4Ahw Tsu prepares financial statements on the cash basis. The statement of financial position on December 31, 2020 andthe income statement for the current year are as follows:CashP1,500,0002,500,000P4,000,000Furniture and equipmentNote payableСapital:Balance, January 1Add: Net incomeP1,000,000P1,600,0002,250,000P3,850,000850,000Less: Withdrawals3,000,000P4,000,000Professional feesP5,000,000Expenses:RentSuppliesOther expensesP1,200,000800,000750,0002,750,000P2,250,000Net incomeIt 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.Required:a) Adjusting entries to convert the records to accrual basis of accountingb) Income statementc) Statement of financial position

Name: Problem 4Ahw Tsu prepares financial statements on the cash basis. The
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Description: Problem 4Ahw Tsu prepares financial statements on the cash basis. The statement of financial position on December 31, 2020 andthe income statement for the current year are as follows:CashP1,500,0002,500,000P4,000,000Furniture and equipmentNote payab

1 Depreciation accounted for on furniture and equipment Value of furniture and equipment…

Answered: the income statement for the curr Cash…

Business

Accounting

the income statement for the curr Cash Furniture and equipment

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 2MCQ

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