Corp. maintains its accounting records on the cash basis but restates its financial statements to the accrual method of accounting. Lea had P60,000 in cash-basis pretax income for the current year. The following balances at January 1 and December 31 of the current year are available: 12/31 1/1 Accounts receivable P40,000 P20,000 Accounts payable 15,000 30,000 Under the accrual method, what amount of income before taxes should Lea report in its current year income statement? Group of answer choices P95,000 P65,000 P55,000 P25,000
Corp. maintains its accounting records on the cash basis but restates its financial statements to the accrual method of accounting. Lea had P60,000 in cash-basis pretax income for the current year. The following balances at January 1 and December 31 of the current year are available: 12/31 1/1 Accounts receivable P40,000 P20,000 Accounts payable 15,000 30,000 Under the accrual method, what amount of income before taxes should Lea report in its current year income statement? Group of answer choices P95,000 P65,000 P55,000 P25,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
5. Corp. maintains its accounting records on the cash basis but restates its financial statements to the accrual method of accounting. Lea had P60,000 in cash-basis pretax income for the current year. The following balances at January 1 and December 31 of the current year are available:
|
|
12/31 |
1/1 |
|
|
P40,000 |
P20,000 |
|
Accounts payable |
15,000 |
30,000 |
Under the accrual method, what amount of income before taxes should Lea report in its current year income statement?
Group of answer choices
P95,000
P65,000
P55,000
P25,000
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