CQL Company began operations on January 1, 2021. The company reported the following data which constitute a condensed description of the business for the first year of operation ending December 31,2021. Cash sales P 1,800,000 Sales on account 2,000,000 Collection from customers 1,600,000 Cash purchases 400,000 Purchases on account 2,500,000 Payments to trade creditors 1,300,000 Salaries paid 700,000 Office supplies paid 400,000 Other expenses paid 80,000 Interest received 50,000 Equipment 600,000 The equipment was acquired by CQL on January 1 and has an estimated useful life of 8 years with no residual value. The following are additional information provided by CQL company on December 31: Accrued salaries amounted to P90,000 It is estimated that P50,000 of the outstanding accounts receivable may not be collected on December 31, 2021. Unused office supplies also amounted to P 30,000. Accrued interest receivable was P5,000. The ending inventory on December 31, 2021 amounted to P500,000.
CQL Company began operations on January 1, 2021. The company reported the following data which constitute a condensed description of the business for the first year of operation ending December 31,2021.
Cash sales |
P 1,800,000 |
Sales on account |
2,000,000 |
Collection from customers |
1,600,000 |
Cash purchases |
400,000 |
Purchases on account |
2,500,000 |
Payments to trade creditors |
1,300,000 |
Salaries paid |
700,000 |
Office supplies paid |
400,000 |
Other expenses paid |
80,000 |
Interest received |
50,000 |
Equipment |
600,000 |
The equipment was acquired by CQL on January 1 and has an estimated useful life of 8 years with no residual value.
The following are additional information provided by CQL company on December 31:
- Accrued salaries amounted to P90,000
- It is estimated that P50,000 of the outstanding
accounts receivable may not be collected on December 31, 2021. - Unused office supplies also amounted to P 30,000.
- Accrued interest receivable was P5,000.
- The ending inventory on December 31, 2021 amounted to P500,000.
Prepare the Comparative Income Statement for cash and accrual.
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![Comparative Income Statement
АВС Сompany
Income Statement
Year ended December 31,2020
Cash basis
Accrual basis
Sales
3.300.000
3.500.000
Cost of goods sold:
2,300,000
L 400.000
1,900.000
1,600,000
50.000
Purchases
1,900,000
L 400.000
1,500.000
1,800,000
40,000
Inventory- Dec. 31
Cost of Goods Sold
Gross Income
Interest Income
Total Income
1,840.000
1.650.000
Expenses:
Salaries expense
Office supplies expenses
650,000
200,000
720,000
150,000
Other expenses
50,000
50,000
90,000
40,000
1.050.000
600,000
Doubtful accounts
Depreciation
Total expenses
40,000
940,000
900,000
Net income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc7108837-2290-4230-833f-d8ccd0f5583a%2F4c8d0105-dd2f-4a7e-a0f7-112654f08d6e%2Fkhyxfa_processed.png&w=3840&q=75)
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