During the year, Ben Company received a total of P870,000 from its customer, P60,000 of which was applicable to prior year's revenue and P50,000 of which was applicable to services to be rendered in the future. Revenues related to services already rendered but not yet collected as of yearend totaled P40,000. Depreciation for the year was P80,000. The Prepaid Expense account was credited by P25,000 during the year. The Accrued Expense account was debited by P20,000 for payments made during the year and credited by P35,000 for unpaid amounts as of yearend. Cash payments applicable to current year's expenses were P380,000. 17.How much is the net income using the tax cash basis? 18.How much is the net income using the tax accrual basis?
During the year, Ben Company received a total of P870,000 from its customer, P60,000 of which was applicable to prior year's revenue and P50,000 of which was applicable to services to be rendered in the future. Revenues related to services already rendered but not yet collected as of yearend totaled P40,000. Depreciation for the year was P80,000. The Prepaid Expense account was credited by P25,000 during the year. The Accrued Expense account was debited by P20,000 for payments made during the year and credited by P35,000 for unpaid amounts as of yearend. Cash payments applicable to current year's expenses were P380,000. 17.How much is the net income using the tax cash basis? 18.How much is the net income using the tax accrual basis?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During the year, Ben Company received a total of P870,000 from its customer, P60,000 of which was applicable to prior year's revenue and P50,000 of which was applicable to services to be rendered in the future. Revenues related to services already rendered but not yet collected as of yearend totaled P40,000.
Depreciation for the year was P80,000. The Prepaid Expense account was credited by P25,000 during the year. The Accrued Expense account was debited by P20,000 for payments made during the year and credited by P35,000 for unpaid amounts as of yearend. Cash payments applicable to current year's expenses were P380,000.
17.How much is the net income using the tax cash basis?
18.How much is the net income using the tax accrual basis?
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