P5 Pre-tax profit Items not recognized at year-end were as follows: Prepaid insurance Accrued wages Rent revenue collected in advance Interest receivable The correct amount of pre-tax profit should be A. P4,750,000. B. P4,950,000. C. P5,000,000. D. P5.250.000
P5 Pre-tax profit Items not recognized at year-end were as follows: Prepaid insurance Accrued wages Rent revenue collected in advance Interest receivable The correct amount of pre-tax profit should be A. P4,750,000. B. P4,950,000. C. P5,000,000. D. P5.250.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![4. Magic Company failed to recognize accruals and prepayments during its first year
of operations. The pre-tax earnings, accruals and prepayments at the end of the
year were:
P5,000,000
Pre-tax profit
Items not recognized at year-end were as follows:
Prepaid insurance
Accrued wages
Rent revenue collected in advance
Interest receivable
200,000
250,000
300,000
100,000
The correct amount of pre-tax profit should be
A. P4,750,000.
B. P4,950,000.
C. P5,000,000.
D. P5,250,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F84b6d5c0-05d3-432f-b052-4d8c34f34ef0%2F2c88fb80-9b60-4fed-8bcf-d86842a31ae7%2F39mdrc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. Magic Company failed to recognize accruals and prepayments during its first year
of operations. The pre-tax earnings, accruals and prepayments at the end of the
year were:
P5,000,000
Pre-tax profit
Items not recognized at year-end were as follows:
Prepaid insurance
Accrued wages
Rent revenue collected in advance
Interest receivable
200,000
250,000
300,000
100,000
The correct amount of pre-tax profit should be
A. P4,750,000.
B. P4,950,000.
C. P5,000,000.
D. P5,250,000.
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