BBCI Company's net income for 2016, 2017 and 2018 were P200,000, P290,000 and P370,000, respectively. The following items were not handled properly: Rent payable every December 31 have been consistently omitted from the records of that date and have been recorded as expenses when paid in the following year. The rent accrual recorded in this manner were: December 31, 2015 P5,00O December 31, 2016 11,000 December 31, 2017 15,000 December 31, 2018 9,400 Interest of P13,000 was received from a borrower on December 23, 2018. It was recorded as income at that time even though the interest pertains to 2019. Invoices for office supplies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored an no entry has been made for them. December 31, 2015 P7,000 December 31, 2016 13,000 December 31, 2017 7,400 December 31, 2018 14,200 You also discovered that on January 1, 2016, the Company completed a major repair on the Company's machinery and equipment incurring a total cost of P330,000, which it had charged to repairs expense. This major repair increased the efficiency of the said equipment. The said equipment had remaining useful life of 11 years as of the same date. Determine the correct net income for 2016 A. P535,600 B. P585,000 C. P545,000 D. P569500
BBCI Company's net income for 2016, 2017 and 2018 were P200,000, P290,000 and P370,000, respectively. The following items were not handled properly: Rent payable every December 31 have been consistently omitted from the records of that date and have been recorded as expenses when paid in the following year. The rent accrual recorded in this manner were: December 31, 2015 P5,00O December 31, 2016 11,000 December 31, 2017 15,000 December 31, 2018 9,400 Interest of P13,000 was received from a borrower on December 23, 2018. It was recorded as income at that time even though the interest pertains to 2019. Invoices for office supplies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored an no entry has been made for them. December 31, 2015 P7,000 December 31, 2016 13,000 December 31, 2017 7,400 December 31, 2018 14,200 You also discovered that on January 1, 2016, the Company completed a major repair on the Company's machinery and equipment incurring a total cost of P330,000, which it had charged to repairs expense. This major repair increased the efficiency of the said equipment. The said equipment had remaining useful life of 11 years as of the same date. Determine the correct net income for 2016 A. P535,600 B. P585,000 C. P545,000 D. P569500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:BBCI Company's net income for 2016, 2017 and 2018 were P200,000, P290,000 and P370,000, respectively. The following items were not handled properly:
Rent payable every December 31 have been consistently omitted from the records of that date and have been recorded as expenses when paid in the following year. The rent accrual recorded in this
manner were:
December 31, 2015 P5,00o
December 31, 2016 11,000
December 31, 2017 15,000
December 31, 2018 9,400
Interest of P13,000 was received from a borrower on December 23, 2018. It was recorded as income at that time even though the interest pertains to 2019.
Invoices for office supplies purchas
have been charged to expense accounts
eived
supplies on han
the
each year have
ignored an no entry has been
ade for
them.
December 31, 2015 P7,00o
December 31, 2016 13.000
December 31, 2017 7,400
December 31, 2018 14,200
You also discovered that on January 1, 2016, the Company completed a major repair on the Company's machinery and equipment incurring a total cost of P330,000, which it had charged to repairs
expense. This major repair increased the efficiency of the said equipment. The said equipment had remaining useful life of 11 years as of the same date.
Determine the correct net income for 2016
A. P535,600
B. P585,000
C. P545.000
D. P569500
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