EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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Mahal Mo Co. reported revenue of P3,100,000 in its accrual basis income statement for the
year ended December 31, 2020. Additional information are as follows: Accounts receivable,
December 31, 2019, P700,000 and Accounts receivable, December 31, 2020, P1,100,000.
Under the cash basis, how much should Mahal Mo Co. report as revenue for 2020? *
BTS Corp. collected P24,700 in interest during 2021. BTS showed P3,700 in interest receivable on its December 31, 2021 statement of financial position and P10,600 on December 31, 2020. How much is the Interest Revenue reported on BTS Company’s statement of comprehensive income for 2021?
Simone Inc. reported revenue of P3,000,000 in its accrual basis income statement for the year ended December 31, 2019. Additional information are as follows: Accounts receivable, December 31, 2018, P600,000 and Accounts receivable, December 31, 2019, P1,000,000. Under the cash basis, how much should Simone Inc. report as revenue for 2019?
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- Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.arrow_forwardIn December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of S4,500 for services to be performed in January 2020. Swanstrom also receives the December utility bill for S600 but does not pay this bill until 2020. For 2019, under the accrual basis of accounting, Swanstrom would recognize: a. $8,000 of revenue and $600 of expense. b. $8,000 of revenue and $0 of expense. c. $3,500 of revenue and $600 of expense. d. $3,500 Of revenue and $0 of expense.arrow_forwardInferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120 in its accounts receivable. Additionally, Karras had a credit balance in its allowance for doubtful accounts of 4,350 and 9,420 at the beginning and end of the year, respectively. During the year, Karras made credit sales of 1,530,000, collected receivables in the amount of 1,445,700, and recorded bad debt expense of 83, 750. Required: Next Level Compute the amount of accounts receivable that Karras wrote off during the year and the amount of accounts receivable at the beginning of the year.arrow_forward
- Winter Company earned revenues of $340,000 in cash and $425,000 on account during 2020. Of the $425,000 on account, $140,000 was collected in cash in 2020 and the rest in 2021. The company incurred expenses of $240,000 in 2020 and made payments of $120,000 towards the expenses in 2020. What is net income in 2020 under accrual accounting?arrow_forwardBT21 Corp. collected P24,700 in interest during 2021. BT21 showed P3,700 in interest receivable on its December 31, 2021 statement of financial position and P10,600 on December 31, 2020. How much is the Interest Revenue reported on BT21 Company’s statement of comprehensive income for 2021?arrow_forwardThe 2025 income statement of Wildhorse Corporation included the following items Service Revenue Interest Expense Unearned Service Revenue Interest payable All of Wildhorse's revenue is received in cash (no Accounts Receivable). The following items were taken from Wildhorse's balance sheet $367600 O $367600. O $370150. 4700 O $362900. O $394450. The cash received for services during the year is December 31, 2025 $26850 1250 December 31, 2024 $24300 1950arrow_forward
- Beyond Belief manufactures computer equipment and provides financing for purchases by its customers. Beyond Belief reported sales and interest revenues of $79,500 million for 2019. The balance sheet showed current and noncurrent receivables of $ 30,750 million at the beginning of 2019 and $ 26,900 million at the end of 2019. Compute the amount of cash collected from customers during 2019.arrow_forwardZuhoor Muscat Company reported the following transactions during the year 2020collected RO 45,000 cash from customers for services provided during 2020 and recelved RO 45, 000 from customers for services provided during 2019. Additionally, Zuhoon Muscat Company provided services to customers on account during 2020 for a total of RO 90,000 and accepted RO 55,000 cash for services to be performed in 2021. If Zuhoor Muscat Company applying accrual accounting, then the effect of the above transactions on its net income at yearend 2020 will be: a. Increase by RO 135,000 b. Increase by RO 145,000 . Increase by RO 235,000 dIncrease by RO 190,000 e None of the options are correctarrow_forwardOn August 1, 2022, Colombo Company's treasurer signed a note promising to pay $122,100 on December 31, 2022. The proceeds of the note were $115,800. Use the horizontal model to show the effects of signing the note and the receipt of the cash proceeds on August 1, 2022. Indicate the financial statement effect. Use the horizontal model to show the effects of recording interest expense for the month of September. Indicate the financial statement effect. Use the horizontal model to show the effects of repaying the note on December 31, 2022. Indicate the financial statement effect.arrow_forward
- Please explain how you get the journal entries below. The DeVille Company reported pretax accounting income on its income statement as follows: 2021 $ 355,000 2022 275,000 2023 345,000 2024 385,000 Included in the income of 2021 was an installment sale of property in the amount of $30,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $12,000 in 2022, $15,000 in 2023, and $3,000 in 2024.Included in the 2023 income was $10,000 interest from investments in municipal governmental bonds.The enacted tax rate for 2021 and 2022 was 40%, but during 2022, new tax legislation was passed reducing the tax rate to 25% for the years 2023 and beyond.Required:Prepare the year-end journal entries to record income taxes for the years 2021–2024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)arrow_forwardDuring 2022 Tamarisk, Inc. had sales on account of $728000, cash sales of $324000, and collections on account of $507000. In addition, they collected $9900 which had been written off as uncollectible in 2021. As a result of these transactions the change in the accounts receivable indicates a $221000 increase. $545000 increase. $211100 increase. $536000 increase.arrow_forwardAlex Corporation has the following account balances on December 31, 2020: Accounts receivable ₱ 400,000 Allowance for uncollectible accounts 8,400 Alex completed the following transactions in 2019: Net credit sales, ₱ 4,000,000. Collections on accounts, ₱ 3,870,000. Write-off of uncollectible accounts, ₱ 10,000. Recovery of accounts previously written-off, ₱ 2,000. Uncollectible accounts expense, 2/3 of 1% of net credit sales. REQUIRED: 1. Journalize the foregoing transactions. 2. Compute the balance of accounts receivable and allowance for uncollectible accounts at December 31, 2020. What amount of Accounts receivable, net would Alex report on its December 31, 2020 balance sheet? 3. Assume that Alex uses the aging of accounts instead of the percent of sales method in estimating uncollectible accounts. Analysis indicates that Php 30,800 of outstanding accounts on December 31, 2020 may prove to be uncollectible. Compute the uncollectible accounts expense and the…arrow_forward
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