12. Cow Co. sells gift certificates that expire within a year. During20x1, Cow Co. sold gift certificates worth P200,000, of whichP108,000 were redeemed. Cow Co. expects that 10% of the giftcertificates sold will not be redeemed. Under PFRS 15, whatamounts of (1) total revenue and (2) liability should bereported in Cow Co.'s 20x1 financial statements?a. 108,000; 72,000b. 128,000; 72,000c. 120,000; 72,000d. 120,000; 80,000

Revenue recognition principle says that revenue should only be recognised in business, when earned.…

Answered: 12. Cow Co. sells gift certificates…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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29. The entity purchased land paying P200,000 cash and non-interest bearing note amounting to P1,000,000. The note is payable in 4 equal annual installments. The first installment payment is at the transaction date. If the effective rate of the note is equal to 10%, how much is the cost of the equipment?Group of answer choices792,466992,4661,071,713781,713
On October 20, 2021, ABC Co. consigned 40 freezers in Holden Co. for sale P1,000 each and paid P800 in transportation costs. On December 30, 2021, Holden reported the sale of 10 freezers and remitted P8,500. The remittance was net of the agreed 15% commission. What amount should ABC recognize as consignment sales revenue for 2021? [A] 7,700 [B] 8,500 [C] 9,800 [D] 10,000
6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise to Reed was $675,000. Reed offers credit terms of 1/10, n/30 to encourage early payment. At year-end, there are $22,500 of sales still eligible for the 1% discount. Reed believes that all of the companies will pay within the discount period to receive the 1% discount. Assume Reed's fiscal year is December 31. Reed's adjusting journal entry will include: A) A debit to Sales Discounts for $225 B) A credit to Allowance for Sales Discounts for $2,250 C) A debit to Sales Discounts for $2,050 D) A credit to Sales Discounts for $225 E) No adjusting journal entry is required. Discount will be recognized when payment is received.
Problems 1). Record the journal entries for the following current liabilities for Company Z A). Company Z is required by law to collect and remit sales taxes to the state. If $78,000 of cash sales are subject to a 6% sales tax B). Company Z faces a probalble loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. C). Employees earn vacation pay at the rate of one day per month. During the month, 25 employees quality for one vacation day each. Their average daily wage is $100 per day. D). Z company estimates thatt warranty expense will be 4% of sales. The company's sales for the current period are $185,000.. E). Z Company receives $48, 000 cash in advance ticket sales for 12 home games. Record the advance ticket sales on April :30. Record the revenue earned for the first home game played on August 14. "V B. C. D. E.
29. On January 1, 20x1, ABC Bank extended a P1,000,000 loan to XYZ. Principal is due on December 31, 20x5 but 10% interest is due annually starting December 31, 20x1. On December 31, 20x3, XYZ was delinquent and it was ascertained that the loan is credit-impaired. ABC assessed that interests accruing on the loan will not be collected however the principal is expected to be collected in two equal annual installments starting December 31, 20x4. The current rate on December 31, 20x3 is 14%. Impairment loss is (use 6-decimal present value factor) The correct answer is: 232,231
19. On January 1, 20x1, ABC Co. extended a P1,000,000 loan to one of its officers as part of ABC’s car and housing assistance program. The note received is due on January 1, 20x4 and bears 10% interest compounded annually. For the year ended December 31,20x3, interest income shall be The correct answer is: 121,000
3. ABC Co assigned P500,000 of its account receivables to XYZ Bank as a security for a 10% loan of P420,000. XYZ charged a 2% commission on the amount of the loan. During the first month, ABC collected 110,000 on assigned accounts after deducting P380 of discounts. ABC accepted returns of P1,350 and wrote off assigned receivables amounting to P3,700. The entries during the first month should include: Dr Cash 110,380 Dr Bad debts expense 3,700 Dr Allowance for bad debts, 3,700 Dr Accounts Receivable 115,430
22. On July 1, Year 10, Cabaret Corporation factored P80,000 of its accounts receivable without recourse to Playtime Company. Playtime retains 10% of the accounts receivables as an allowance for sales returns and charges a 5% commission on the gross amount of factored receivables. How much cash did Cabaret receive from factoring its receivables? a. 80,000 b. 72,000 c. 68,000 d. 76,000
6. Answer what is required of the problem.
Kk25.
45. SLEX Company purchased a machine with a cash price of P350,000. SLEX gave the following as payment: · Cash- P100,000· Notes payable, non-interest bearing (payable in three equal annual payments, beginning 1/1/23)- P150,000 · SLEX 1,000 ordinary shares, P100 par (fair value P130)- P100,000 How much is the discount on notes payable to be recorded on the date of purchase?
Company M uses the cost recovery method. During 19A, it sells goods with a cost of $15,000 for $25,000, payable in installments of $10,000, $10,000 and $5,000, respectively, beginning in 19A. How much profit should be recognized each year?

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