The pre-collection/advanced collection is P360,000. This is applicable for a six-month rental period starting November 1, 2020. The financial statements to be prepared are dated December 31, 2020. How much is the unearned income to be reported in the financial statements?

The pre-collection/advanced collection is P360,000. This is applicable for a six-month rental period starting November 1, 2020. The financial statements to be prepared are dated December 31, 2020. How much is the unearned income to be reported in the financial statements?

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

The pre-collection/advanced collection is P360,000. This is applicable for a six-month
rental period starting November 1, 2020. The financial statements to be prepared are
dated December 31, 2020. How much is the unearned income to be reported in the
financial statements?

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