Pat invites Tin to join him in his business. Tin agreed that the following adjustments are taken up in the books of Pat Prepaid expenses of P 10,000 and accrued expenses of P6,000 are to be recognized. Allowance for doubtful accounts on Pat's accounts receivable shall be increased by P10,000. Pat's capital before adjustment for the above items was P405,000. Tin will invest enough cash to make her equal to 60%. How much is Pat's adjusted capital balance?
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- Jim Young, M.D., keeps his accounting records on the cash basis. During 2021, Dr. Young collected P460,000 from his patients. At December 31, 2020, Dr. Young had accounts receivable of P50,000. At December 31, 2021, Dr. Young had accounts receivable of P70,000 and unearned revenue of P10,000. On the accrual basis, how much was Dr. Young's patient service revenue for 2021? a. P 410,000. b. P 470,000. c. P 480,000. d. P 490,000.T borrows $100,000 from the bank in Year 1, which he agrees to repay in Year 2. Whenthe debt becomes due in Year 2, the bank agrees to release T from liability if hepays $80,000.a. T realizes $100,000 of income in Year 1.b. T realizes $20,000 of income from the cancellation of debt in Year 2.c. T realizes $20,000 of ordinary income as compensation for services in Year 2 ifthe cancellation of debt was intended to satisfy the bank’s obligation to pay Tfor services.d. Both a and b.e. Either b or c, depending on the circumstances. T buys a parcel of real estate for $100,000, which he finances by giving the seller a nonrecoursemortgage for the full purchase price. The debt is due in one balloon payment inYear 5. When the debt becomes due in Year 5, T decides to give the property back to theseller in satisfaction of the debt (the property is worth only $50,000 at that time).a. T will realize $100,000 of income in Year 1 because the debt was non-recourse.b. T will realize no income in Year…A man borrowed P2,000.00 from his brother on June 1, 1928 and P500.00 on June 1, 1930, agreeing that the money is worth 5% compounded annually. The man paid P500.00 on June 1, 1931, P400.00 on June 1, 1932 and P700.00 on June 1, 1933. What pay on June 1, 1936 to discharge all remaining liability?
- Mrs. Lim borrowed P400,000 from Mr. Sy on August 1, 2008 and P100,000 on August 1, 2010, agreeing that money is worth 5% compounded annually. Mrs. Lim paid P100,000 on August 1, 2011, P80,000 on June 1, 2012 and P140,000 on August 1, 2013. What additional sum should Mrs. Lim pay on August 1, 2016 to discharge all remaining liability?In 2020, Mr. Pacino was employed as account officer in a non-life insurance company. He received P8,000 basic monthly salary. In addition, he gets 5% of gross premium as commission on policies issued under his account. In 2020, gross premiums under his account totaled P4.2 million. He is likewise entitled to representation allowance of P1,000 a month. How much is to be included as gross income in 2020? Select one: а. Р318,000 b. exempt С. Р306,000 d. P96,000Lorissa owes Waterbury State Bank $200,000. During the current year, she isunable to make the required payments on the loan and negotiates the followingterms to extinguish the debt. Lorissa transfers to Waterbury ownership ofinvestment property with a value of $90,000 and a basis of $55,000, and commonstock with a value of $50,000 and a basis of $70,000. Lorissa also pays Waterbury$5,000 cash, and Waterbury forgives the remaining amount of debt. Before theagreement, Lorissa's assets are $290,000, and her liabilities are $440,000.Determine how much gross income Lorissa has from the extinguishment of the debt.
- Anne purchased an annuity from an insurance company that promised to pay her $17,000 per year for the next 10 years. Anne paid $130,050 for the annuity, and in exchange she will receive $170,000 over the term of the annuity. Required: a. How much of the first $17,000 payment should Anne include in gross income? Note: Do not round intermediate calculations. b. How much income will Anne recognize over the term of the annuity?A trust was set up by Mr. Jagadeet Singh for the benefit of his beneficiaries. Under the trust deed, Sakinah, a resident of Malaysia for income tax purposes was appointed as a trustee for the trust body. The trust deed contains the following terms:i. Sharan, the widow is to be paid RM1,000 per month throughout her life until she remarries.ii. The trustee, Sakinah is allowed for RM10,000 per annum for services rendered in administering the trust body.iii. One-fourth of the income is to be paid to his only daughter, Singasari and the remaining balance is to be distributed to his two sons, Sacchin and Ramshin for their maintenance and education purposes at the discretion of the trustee.iv. The amount paid to Sacchin and Ramshin for the year of assessment 2020 is RM10,000 and RM15,000 respectively.v. An accumulation amount of RM500 per month is to be paid for his only grandchild, Ninani who was born in June 2019. The amount is paid starting from July 2020 until she reaches 20 years…Palmon is indebted to Pai Chan. Due to his inability to pay the debt, Palmon was asked to clean the piggery of Pai Chan for three months. Thereafter, Pai Chan gave Palmon P5,000 and condoned the debt amounting to P10,000. How much income should be declared by Palmon?
- After 25 years of service, Mr. Aman retired on 1st May 2021. He received a gratuity of Rs 20,00,000. Calculate the taxable gratuity assuming that at the time of his retirement, his basic salary was Rs 50,000/month, DA was RS. 20,000 (50% of DA is for retirement benefits). He also received a 0.75% commission of the turnover when the turnover was reported as RS 1,00,00,000. He also received a bonus of RS 30,000 during the given previous year. Calculate the amount of taxable gratuity in the following three cases: a. Mr Aman is a government employee. b. Mr. Aman is a private sector employee and is covered by the Payment of Gratuity Act, 1972. 26508 c. Mr. Aman is a private sector employee and is not covered by Payment of Gratuity Act, 1972. Jaya -826508. Jaya-8265011 9811 Jaya-826 50811 30311Bran pays an adviser $1,000 to help manage his investments and provide investment advice. The adviser’s fee is not directly related to any particular investment owned by Bran. He owns $80,000 worth of municipal bonds that pay his $6,000 in interest and $20,000 worth of bonds that pay his taxable interest of $2,000. Determine the deductible investment expenses related to the $1,000 fee for investment advice. Use the relative investment income to allocate indirect expenses. $0 B. $250 C. $750 D. $800 E. $1,000Required: Assume that Mrs. Cero is paid P500,000 for the book value of Cero's capital account; any difference is to be allocated based on ending capital balances. Prepare the necessary journal entry.