Pdfcoffee cash and accrual basis for accounting method PDF

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ASSIGNMENT 01 : CASH AND ACCRUAL BASISShade the best answer with YELLOW. Beginning and ending Accounts Receivable balances were P28,000 and P24,000, respectively. If sales revenue during the period were P80,000 under cash basis, then total sales under accrual basis were apparently a. P76,000. b. P84...

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ASSIGNMENT 01 : CASH AND ACCRUAL BASIS Shade the best answer with YELLOW.

1. Beginning and ending Accounts Receivable balances were P28,000 and P24,000, respectively. If sales revenue during the period were P80,000 under cash basis, then total sales under accrual basis were apparently a. P76,000. b. P84,000. c. P104,000. d. P108,000. 2. Crescent Corporation's interest revenue for 2004 was P13,100. Accrued interest receivable on December 31, 2004, was P2,275 and P1,875 on December 31, 2003. The cash received for interest during 2004 was a. P1,350. b. P10,825. c. P12,700. d. P13,100. 3. Sky Corporation's salaries expense for 2004 was P136,000. Accrued salaries payable on December 31, 2004, was P17,800 and P8,400 on December 31, 2003. The cash paid for salaries during 2004 was a. P126,600. b. P127,600. c. P145,400. d. P153,800. 4. In November and December 2004, Bee Company, a newly organized newspaper publisher, received P72,000 for 1,000 three-year subscriptions at P24 per year, starting with the January 2, 2005, issue of the newspaper. How much should Bee report in its 2004 income statement for subscription revenue under accrual basis? a. P0 b. P12,000 c. P24,000 d. P72,000 5. The following balances have been excerpted from Edwards' balance sheets:

Prepaid Insurance Interest Receivable Salaries Payable

December 2004 P 6,000 3,700 61,500

31, December 2003 P 7,500 14,500 53,000

Edwards Company paid or collected during 2004 the following items: Insurance premiums paid Interest collected Salaries paid

P 41,500 123,500 481,000

The insurance expense on the income statement for 2004 was a. P28,000. b. P40,000. c. P43,000. d. P55,000.

31,

Use the following information for questions 6 through 8: The income statement of Carsen Corporation for 2004 included the following items: Interest revenue P95,500 Salaries expense 75,000 Insurance expense 12,600 The following balances have been excerpted from Carsen Corporation's balance sheets: December 31, 2004 December 31, 2003 Accrued interest receivable P9,100 P7,500 Accrued salaries payable 8,900 4,200 Prepaid insurance 1,100 1,500 6.The cash received for interest during 2004 was a. P86,400. b. P93,900. c. P95,500. d. P97,100. 7.The cash paid for salaries during 2004 was a. P79,700. b. P70,300. c. P70,800. d. P83,900. 8.The cash paid for insurance premiums during 2004 was a. P11,500. b. P11,100. c. P13,000. d. P12,200. 9.The following information is available for Carr Company: Payment for goods during 2004 Accounts payable, January 1, 2004 Inventory, January 1, 2004 Accounts payable, December 31, 2004 Inventory, December 31, 2004 Cost of goods sold for 2004 is a. P79,500. b. P80,900. c. P87,100. d. P88,500.

P82,000 9,000 10,400 7,200 9,700

10.Gregg Corp. reported revenue of P900,000 in its accrual basis income statement for the year ended June 30, 2004. Additional information was as follows: Accounts receivable June 30, 2003 P250,000 Accounts receivable June 30, 2004 530,000 Uncollectible accounts written off during the fiscal year 13,000 Under the cash basis, Gregg should report revenue of a. P387,000. b. P400,000. c. P607,000. d. P633,000.

11.Jim Wynn, M.D., keeps his accounting records on the cash basis. During 2004, Dr. Wynn collected P180,000 from his patients. At December 31, 2003, Dr. Wynn had accounts receivable of P25,000. At December 31, 2004, Dr. Wynn had accounts receivable of P35,000 and unearned revenue of P5,000. On the accrual basis, how much was Dr. Wynn's patient service revenue for 2004? a. P155,000. b. P185,000. c. P190,000. d. P195,000. 12.The following information is available for Ace Company for 2004: Disbursements for purchases Increase in trade accounts payable Decrease in merchandise inventory

P700,000 50,000 20,000

Costs of goods sold for 2004 was a. P770,000. b. P730,000. c. P670,000. d. P630,000. 13. Ocampo Company reported cash basis sales revenue of P2,300,000 for the year ended December 31, 2005. Additional information was as follows: December 31, 2004 Accounts receivable Notes receivable

500,000 150,000

December 31, 2005 650,000 200,000

During 2005, uncollectible accounts of P10,000 were written off and note receivable of P100,000 was discounted for net proceeds of P90,000 and credited directly to notes receivable. Under accrual basis, Ocampo company would report gross sales of a. b. c. d.

2,610,000 2,510,000 2,600,000 2,500,000

14. Gutierrez Corporation, which began operations on January 1, 2004, has elected to use cash basis accounting for tax purposes and accrual basis accounting for its financial statements. Gutierrez reported sales of P1,750,000 and P800,000 in its tax returns for the years ended December 31, 2005 and 2004, respectively. Reid reported accounts receivable of P300,000 and P500,000 in its balance sheets as of December 31, 2005 and 2004, respectively. What amount should Gutierrez report as sales in its income statement for the year ended December 31, 2005? a. 1,450,000 b. 1,550,000 c. 1,950,000 d. 2,050,000...