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Lancelot is a dealer of household appliances. He reported the following in 2019 and 2020:   2019 2020  Installment sales P500,000 P800,000  Cost of installment sales 250,000 440,000 Collections 300,000  600,000 Lance’s 2020 collection is inclusive of P100,000 accounts from 2019. Using the accrual basis of accounting compute Lancelot’s gross income subject to income tax in 2020. P360,000 P275,000 P320,000 P250,000

Lancelot is a dealer of household appliances. He reported the following in 2019 and 2020:   2019 2020  Installment sales P500,000 P800,000  Cost of installment sales 250,000 440,000 Collections 300,000  600,000 Lance’s 2020 collection is inclusive of P100,000 accounts from 2019. Using the accrual basis of accounting compute Lancelot’s gross income subject to income tax in 2020. P360,000 P275,000 P320,000 P250,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lancelot is a dealer of household appliances. He reported the following in 2019 and 2020:

  2019 2020
 Installment sales P500,000 P800,000
 Cost of installment sales 250,000 440,000
Collections 300,000  600,000

Lance’s 2020 collection is inclusive of P100,000 accounts from 2019.

Using the accrual basis of accounting compute Lancelot’s gross income subject to income tax in 2020.

P360,000

P275,000

P320,000

P250,000

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