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Gana Company maintains its accounting records on the cash basis. During 2020, it paid a total of P350,000 to supplier, net of P10,000 purchase discount. Upon examination of additional evidence, the following information was obtained:                                                                                                                                  01/01/2020      12/31/2020                                              Accounts payable              P110,000             P170,000                                             Advances to supplier             55,000                20,000                                             Advances from customer        65,000                40,000   What is the amount of gross purchases for 2020 applying the accrual basis? P455,000                             P440,000 P265,000                             P385,000

Gana Company maintains its accounting records on the cash basis. During 2020, it paid a total of P350,000 to supplier, net of P10,000 purchase discount. Upon examination of additional evidence, the following information was obtained:                                                                                                                                  01/01/2020      12/31/2020                                              Accounts payable              P110,000             P170,000                                             Advances to supplier             55,000                20,000                                             Advances from customer        65,000                40,000   What is the amount of gross purchases for 2020 applying the accrual basis? P455,000                             P440,000 P265,000                             P385,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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  1. Gana Company maintains its accounting records on the cash basis. During 2020, it paid a total of P350,000 to supplier, net of P10,000 purchase discount. Upon examination of additional evidence, the following information was obtained:

                                                                                                                                 01/01/2020      12/31/2020

                                             Accounts payable              P110,000             P170,000

                                            Advances to supplier             55,000                20,000

                                            Advances from customer        65,000                40,000

 

What is the amount of gross purchases for 2020 applying the accrual basis?

  1. P455,000                             P440,000
  2. P265,000                             P385,000
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