Problem 4 Ahw Tsu prepares financial statements on the cash basis. The statement of financial position on December 31, 2020 and the income statement for the current year are as follows: Cash Furniture and equipment P1,500,000 2,500,000 P4,000,000 Note payable Capital: Balance, January 1 Add: Net income P1,000,000 P1,600,000 2,250,000 P3,850,000 850,000 Less: Withdrawals 3,000,000 P4,000,000 Professional fees Expenses: Rent Supplies Other expenses Net income P5,000,000 P1,200,000 800,000 750,000 2,750,000 P2,250,000 It was decided that the financial statements should be prepared on the accrual basis. Relevant information is as follows: 1) The furniture and equipment were acquired on July 1, 2019. The estimated life is 10 years. 2) The 12% promissory note us dated April 1, 2020 and matures in one year. Interest is payable on the date of maturity. 3) The accounts receivable as at December 31, 2020 and 2019 is P750,000 and P500,000, respectively. 4) Accrued rent on December 31, 2020, P100,000. 5) Unused office supplies as at December 31, 2020 and 2019 is P250,000 and P300,000, respectively.
Problem 4 Ahw Tsu prepares financial statements on the cash basis. The statement of financial position on December 31, 2020 and the income statement for the current year are as follows: Cash Furniture and equipment P1,500,000 2,500,000 P4,000,000 Note payable Capital: Balance, January 1 Add: Net income P1,000,000 P1,600,000 2,250,000 P3,850,000 850,000 Less: Withdrawals 3,000,000 P4,000,000 Professional fees Expenses: Rent Supplies Other expenses Net income P5,000,000 P1,200,000 800,000 750,000 2,750,000 P2,250,000 It was decided that the financial statements should be prepared on the accrual basis. Relevant information is as follows: 1) The furniture and equipment were acquired on July 1, 2019. The estimated life is 10 years. 2) The 12% promissory note us dated April 1, 2020 and matures in one year. Interest is payable on the date of maturity. 3) The accounts receivable as at December 31, 2020 and 2019 is P750,000 and P500,000, respectively. 4) Accrued rent on December 31, 2020, P100,000. 5) Unused office supplies as at December 31, 2020 and 2019 is P250,000 and P300,000, respectively.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 4
Ahw Tsu prepares financial statements on the cash basis. The statement of financial position on December 31, 2020 and
the income statement for the current year are as follows:
Cash
Furniture and eguipment
P1,500,000
2,500,000
P4,000,000
P1,000,000
Note payable
Capital:
Balance, January 1
Add: Net income
P1,600,000
2,250,000
P3,850,000
850,000
Less: Withdrawals
3,000,000
P4,000,000
Professional fees
Expenses:
Rent
Supplies
Other expenses
P5,000,000
P1,200,000
800,000
750,000
2,750,000
P2,250,000
Net income
It was decided that the financial statements should be prepared on the accrual basis. Relevant information is as follows:
1) The furniture and equipment were acquired on July 1, 2019. The estimated life is 10 years.
2) The 12% promissory note us dated April 1, 2020 and matures in one year. Interest is payable on the date of maturity.
3) The accounts receivable as at December 31, 2020 and 2019 is P750,000 and P500,000, respectively.
Accrued rent on December 31, 2020, P100,000.
5) Unused office supplies as at December 31, 2020 and 2019 is P250,000 and P300,000, respectively.
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