PROB1. Alyssa Company maintains the accounting records on the cash basis but PROB1.

PROB1. Alyssa Company maintains the accounting records on the cash basis but
restates the financial statements to the accrual basis. The entity has 6,000,000 in cash restates the financial statements to the accrual basis. The entity has 6,000,000 in cash
basis net income for the current year. The following information pertains to the entity’s basis net income for the current year. The following information pertains to the entity’s
operations: operations:
January 1 December 31 January 1 December 31
Accounts Receivable 2,000,000 4,000,000 Accounts Receivable 2,000,000 4,000,000
Accounts Payable 3,000,000 1,500,000 Accounts Payable 3,000,000 1,500,000
Under accrual basis, what amount of net income should be reported for the Under accrual basis, what amount of net income should be reported for the
current year? current year?

PROB2. Fred Company provided the following data for the current year: PROB2. Fred Company provided the following data for the current year:
January 1 December 31 January 1 December 31
Accounts receivable 1,200,000 1,350,000 Accounts receivable 1,200,000 1,350,000
Accounts payable 1,500,000 1,850,000 Accounts payable 1,500,000 1,850,000

During the current year, accounts written off amounted to 100,000. Sales return totaled During the current year, accounts written off amounted to 100,000. Sales return totaled
250,000 of which 50,000 was paid to customers. Purchase returns amounted to 250,000 of which 50,000 was paid to customers. Purchase returns amounted to
400,000., of which 100,000 was received from the suppliers. Cash receipts from 400,000., of which 100,000 was received from the suppliers. Cash receipts from
customer after 500,000 discount totaled 8,000,000 while cash payments to trade customer after 500,000 discount totaled 8,000,000 while cash payments to trade
creditors amounted to 5,000,000. creditors amounted to 5,000,000.
What is the amount of gross sales under accrual basis? What is the amount of gross sales under accrual basis?
What is the amount of gross purchases under accrual basis? What is the amount of gross purchases under accrual basis?

PROB3. Baby Company borrowed money under various loan agreement involving notes PROB3. Baby Company borrowed money under various loan agreement involving notes
discounted and notes requiring interest payments at maturity. During the current year, discounted and notes requiring interest payments at maturity. During the current year,
the entity paid interest totaling P6,000,000. The statement of financial position included the entity paid interest totaling P6,000,000. The statement of financial position included
the following: the following:
January 1 December 31 January 1 December 31
Prepaid interest 500,000 1,500,000 Prepaid interest 500,000 1,500,000
Interest payable 2,000,000 2,500,000 Interest payable 2,000,000 2,500,000
What amount of interest expense should be reported for the current year? What amount of interest expense should be reported for the current year?

PROB1. Alyssa Company maintains the accounting records on the cash basis but PROB1. Alyssa Company maintains the accounting records on the cash basis but
restates the financial statements to the accrual basis. The entity has 6,000,000 in cash restates the financial statements to the accrual basis. The entity has 6,000,000 in cash
basis net income for the current year. The following information pertains to the entity’s basis net income for the current year. The following information pertains to the entity’s
operations: operations:
January 1 December 31 January 1 December 31
Accounts Receivable 2,000,000 4,000,000 Accounts Receivable 2,000,000 4,000,000
Accounts Payable 3,000,000 1,500,000 Accounts Payable 3,000,000 1,500,000
Under accrual basis, what amount of net income should be reported for the Under accrual basis, what amount of net income should be reported for the
current year? current year?

PROB2. Fred Company provided the following data for the current year: PROB2. Fred Company provided the following data for the current year:
January 1 December 31 January 1 December 31
Accounts receivable 1,200,000 1,350,000 Accounts receivable 1,200,000 1,350,000
Accounts payable 1,500,000 1,850,000 Accounts payable 1,500,000 1,850,000

During the current year, accounts written off amounted to 100,000. Sales return totaled During the current year, accounts written off amounted to 100,000. Sales return totaled
250,000 of which 50,000 was paid to customers. Purchase returns amounted to 250,000 of which 50,000 was paid to customers. Purchase returns amounted to
400,000., of which 100,000 was received from the suppliers. Cash receipts from 400,000., of which 100,000 was received from the suppliers. Cash receipts from
customer after 500,000 discount totaled 8,000,000 while cash payments to trade customer after 500,000 discount totaled 8,000,000 while cash payments to trade
creditors amounted to 5,000,000. creditors amounted to 5,000,000.
What is the amount of gross sales under accrual basis? What is the amount of gross sales under accrual basis?
What is the amount of gross purchases under accrual basis? What is the amount of gross purchases under accrual basis?

PROB3. Baby Company borrowed money under various loan agreement involving notes PROB3. Baby Company borrowed money under various loan agreement involving notes
discounted and notes requiring interest payments at maturity. During the current year, discounted and notes requiring interest payments at maturity. During the current year,
the entity paid interest totaling P6,000,000. The statement of financial position included the entity paid interest totaling P6,000,000. The statement of financial position included
the following: the following:
January 1 December 31 January 1 December 31
Prepaid interest 500,000 1,500,000 Prepaid interest 500,000 1,500,000
Interest payable 2,000,000 2,500,000 Interest payable 2,000,000 2,500,000
What amount of interest expense should be reported for the current year? What amount of interest expense should be reported for the current year?

PROB1. Alyssa Company maintains the accounting records on the cash basis but PROB1. Alyssa Company maintains the accounting records on the cash basis but
restates the financial statements to the accrual basis. The entity has 6,000,000 in cash restates the financial statements to the accrual basis. The entity has 6,000,000 in cash
basis net income for the current year. The following information pertains to the entity’s basis net income for the current year. The following information pertains to the entity’s
operations: operations:
January 1 December 31 January 1 December 31
Accounts Receivable 2,000,000 4,000,000 Accounts Receivable 2,000,000 4,000,000
Accounts Payable 3,000,000 1,500,000 Accounts Payable 3,000,000 1,500,000
Under accrual basis, what amount of net income should be reported for the Under accrual basis, what amount of net income should be reported for the
current year? current year?

PROB2. Fred Company provided the following data for the current year: PROB2. Fred Company provided the following data for the current year:
January 1 December 31 January 1 December 31
Accounts receivable 1,200,000 1,350,000 Accounts receivable 1,200,000 1,350,000
Accounts payable 1,500,000 1,850,000 Accounts payable 1,500,000 1,850,000

During the current year, accounts written off amounted to 100,000. Sales return totaled During the current year, accounts written off amounted to 100,000. Sales return totaled
250,000 of which 50,000 was paid to customers. Purchase returns amounted to 250,000 of which 50,000 was paid to customers. Purchase returns amounted to
400,000., of which 100,000 was received from the suppliers. Cash receipts from 400,000., of which 100,000 was received from the suppliers. Cash receipts from
customer after 500,000 discount totaled 8,000,000 while cash payments to trade customer after 500,000 discount totaled 8,000,000 while cash payments to trade
creditors amounted to 5,000,000. creditors amounted to 5,000,000.
What is the amount of gross sales under accrual basis? What is the amount of gross sales under accrual basis?
What is the amount of gross purchases under accrual basis? What is the amount of gross purchases under accrual basis?

PROB3. Baby Company borrowed money under various loan agreement involving notes PROB3. Baby Company borrowed money under various loan agreement involving notes
discounted and notes requiring interest payments at maturity. During the current year, discounted and notes requiring interest payments at maturity. During the current year,
the entity paid interest totaling P6,000,000. The statement of financial position included the entity paid interest totaling P6,000,000. The statement of financial position included
the following: the following:
January 1 December 31 January 1 December 31
Prepaid interest 500,000 1,500,000 Prepaid interest 500,000 1,500,000
Interest payable 2,000,000 2,500,000 Interest payable 2,000,000 2,500,000
What amount of interest expense should be reported for the current year? What amount of interest expense should be reported for the current year?
PROB4. Lhet Company assigned some of its patents to other entities under a variety of PROB4. Lhet Company assigned some of its patents to other entities under a variety of
licensing agreements. The following data are gathered for the current year: licensing agreements. The following data are gathered for the current year:

January 1 December 31 January 1 December 31

Unearned royalties 600,000 400,000 Unearned royalties 600,000 400,000
Royalties receivable 900,000 850,000 Royalties receivable 900,000 850,000

During the current year, the entity received royal remittance of 2 million. What amount should During the current year, the entity received royal remittance of 2 million. What amount should
be reported as royalty income for the current year? be reported as royalty income for the current year?

PROB5. Ton Company provided the following increase in account balances that occurred PROB5. Ton Company provided the following increase in account balances that occurred
during the current year: during the current year:
Asset 9,000,000 Asset 9,000,000
Liabilities 3,000,000 Liabilities 3,000,000
Share capital 5,000,000 Share capital 5,000,000
Share premium 500,000 Share premium 500,000
Except for 2,000,000 dividend payment, the year’s earnings and a 200,000 prior period error Except for 2,000,000 dividend payment, the year’s earnings and a 200,000 prior period error
from understatement of ending inventory, there were no changes in retained earnings for the from understatement of ending inventory, there were no changes in retained earnings for the
year. What is the net income for the current year? year. What is the net income for the current year?

PROB6. ABC Company revealed the following changes in the accounts for 2015: PROB6. ABC Company revealed the following changes in the accounts for 2015:
Increase (Decrease) Increase (Decrease)
Cash 1,000,000 Cash 1,000,000
Accounts receivable, net 1,900,000 Accounts receivable, net 1,900,000
Inventory 2,200,000 Inventory 2,200,000
Equipment (1,500,000) Equipment (1,500,000)
Accounts Payable 500,00 Accounts Payable 500,00
Bonds Payable (2,000,000) Bonds Payable (2,000,000)
Loan Payable 3,000,000 Loan Payable 3,000,000
Accrued interest payable100,000 Accrued interest payable100,000

During the current year, the entity issued 10,000 ordinary shares of P100 par for P150 per During the current year, the entity issued 10,000 ordinary shares of P100 par for P150 per
share. Dividend of P4 million was paid in cash during the year. The entity borrowed P3 million share. Dividend of P4 million was paid in cash during the year. The entity borrowed P3 million
from the bank and made interest payment of P200,000. The bank loan is unpaid on December from the bank and made interest payment of P200,000. The bank loan is unpaid on December
31, 2015 and the interest payable on December 31, 2015 was P100,000. There is no interest 31, 2015 and the interest payable on December 31, 2015 was P100,000. There is no interest
payable on January 1, 2015. Equipment with FV of P500,000 was donated by a shareholder payable on January 1, 2015. Equipment with FV of P500,000 was donated by a shareholder
during the year. What is the net income for the current year? during the year. What is the net income for the current year?

PROB4. Lhet Company assigned some of its patents to other entities under a variety of PROB4. Lhet Company assigned some of its patents to other entities under a variety of
licensing agreements. The following data are gathered for the current year: licensing agreements. The following data are gathered for the current year:

January 1 December 31 January 1 December 31

Unearned royalties 600,000 400,000 Unearned royalties 600,000 400,000
Royalties receivable 900,000 850,000 Royalties receivable 900,000 850,000

During the current year, the entity received royal remittance of 2 million. What amount should During the current year, the entity received royal remittance of 2 million. What amount should
be reported as royalty income for the current year? be reported as royalty income for the current year?

PROB5. Ton Company provided the following increase in account balances that occurred PROB5. Ton Company provided the following increase in account balances that occurred
during the current year: during the current year:
Asset 9,000,000 Asset 9,000,000
Liabilities 3,000,000 Liabilities 3,000,000
Share capital 5,000,000 Share capital 5,000,000
Share premium 500,000 Share premium 500,000
Except for 2,000,000 dividend payment, the year’s earnings and a 200,000 prior period error Except for 2,000,000 dividend payment, the year’s earnings and a 200,000 prior period error
from understatement of ending inventory, there were no changes in retained earnings for the from understatement of ending inventory, there were no changes in retained earnings for the
year. What is the net income for the current year? year. What is the net income for the current year?

PROB6. ABC Company revealed the following changes in the accounts for 2015: PROB6. ABC Company revealed the following changes in the accounts for 2015:
Increase (Decrease) Increase (Decrease)
Cash 1,000,000 Cash 1,000,000
Accounts receivable, net 1,900,000 Accounts receivable, net 1,900,000
Inventory 2,200,000 Inventory 2,200,000
Equipment (1,500,000) Equipment (1,500,000)
Accounts Payable 500,00 Accounts Payable 500,00
Bonds Payable (2,000,000) Bonds Payable (2,000,000)
Loan Payable 3,000,000 Loan Payable 3,000,000
Accrued interest payable100,000 Accrued interest payable100,000

During the current year, the entity issued 10,000 ordinary shares of P100 par for P150 per During the current year, the entity issued 10,000 ordinary shares of P100 par for P150 per
share. Dividend of P4 million was paid in cash during the year. The entity borrowed P3 million share. Dividend of P4 million was paid in cash during the year. The entity borrowed P3 million
from the bank and made interest payment of P200,000. The bank loan is unpaid on December from the bank and made interest payment of P200,000. The bank loan is unpaid on December
31, 2015 and the interest payable on December 31, 2015 was P100,000. There is no interest 31, 2015 and the interest payable on December 31, 2015 was P100,000. There is no interest
payable on January 1, 2015. Equipment with FV of P500,000 was donated by a shareholder payable on January 1, 2015. Equipment with FV of P500,000 was donated by a shareholder
during the year. What is the net income for the current year? during the year. What is the net income for the current year?

PROB4. Lhet Company assigned some of its patents to other entities under a variety of PROB4. Lhet Company assigned some of its patents to other entities under a variety of
licensing agreements. The following data are gathered for the current year: licensing agreements. The following data are gathered for the current year:

January 1 December 31 January 1 December 31

Unearned royalties 600,000 400,000 Unearned royalties 600,000 400,000
Royalties receivable 900,000 850,000 Royalties receivable 900,000 850,000

During the current year, the entity received royal remittance of 2 million. What amount should During the current year, the entity received royal remittance of 2 million. What amount should
be reported as royalty income for the current year? be reported as royalty income for the current year?

PROB5. Ton Company provided the following increase in account balances that occurred PROB5. Ton Company provided the following increase in account balances that occurred
during the current year: during the current year:
Asset 9,000,000 Asset 9,000,000
Liabilities 3,000,000 Liabilities 3,000,000
Share capital 5,000,000 Share capital 5,000,000
Share premium 500,000 Share premium 500,000
Except for 2,000,000 dividend payment, the year’s earnings and a 200,000 prior period error Except for 2,000,000 dividend payment, the year’s earnings and a 200,000 prior period error
from understatement of ending inventory, there were no changes in retained earnings for the from understatement of ending inventory, there were no changes in retained earnings for the
year. What is the net income for the current year? year. What is the net income for the current year?

PROB6. ABC Company revealed the following changes in the accounts for 2015: PROB6. ABC Company revealed the following changes in the accounts for 2015:
Increase (Decrease) Increase (Decrease)
Cash 1,000,000 Cash 1,000,000
Accounts receivable, net 1,900,000 Accounts receivable, net 1,900,000
Inventory 2,200,000 Inventory 2,200,000
Equipment (1,500,000) Equipment (1,500,000)
Accounts Payable 500,00 Accounts Payable 500,00
Bonds Payable (2,000,000) Bonds Payable (2,000,000)
Loan Payable 3,000,000 Loan Payable 3,000,000
Accrued interest payable100,000 Accrued interest payable100,000

During the current year, the entity issued 10,000 ordinary shares of P100 par for P150 per During the current year, the entity issued 10,000 ordinary shares of P100 par for P150 per
share. Dividend of P4 million was paid in cash during the year. The entity borrowed P3 million share. Dividend of P4 million was paid in cash during the year. The entity borrowed P3 million
from the bank and made interest payment of P200,000. The bank loan is unpaid on December from the bank and made interest payment of P200,000. The bank loan is unpaid on December
31, 2015 and the interest payable on December 31, 2015 was P100,000. There is no interest 31, 2015 and the interest payable on December 31, 2015 was P100,000. There is no interest
payable on January 1, 2015. Equipment with FV of P500,000 was donated by a shareholder payable on January 1, 2015. Equipment with FV of P500,000 was donated by a shareholder
during the year. What is the net income for the current year? during the year. What is the net income for the current year?