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    PROBLEM 6: CASH TO ACCRUAL: Enterprises Records All Transactions On The Cash Basis

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    The document provides single-entry accounting information for HINDI NAGBIBIRO SI DOC G Company for the periods ended January 1 and June 30. It includes account balances, cash flow information and questions to determine sales, purchases, operating expenses and net

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    PROBLEM 6: CASH TO ACCRUAL: Enterprises Records All Transactions On The Cash Basis

    Uploaded by

    chuchu tv
    58 views4 pages
    The document provides single-entry accounting information for HINDI NAGBIBIRO SI DOC G Company for the periods ended January 1 and June 30. It includes account balances, cash flow information and questions to determine sales, purchases, operating expenses and net

    Original Title

    Assignment1.Prob6&10

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    The document provides single-entry accounting information for HINDI NAGBIBIRO SI DOC G Company for the periods ended January 1 and June 30. It includes account balances, cash flow information and questions to determine sales, purchases, operating expenses and net

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    58 views4 pages

    PROBLEM 6: CASH TO ACCRUAL: Enterprises Records All Transactions On The Cash Basis

    Uploaded by

    chuchu tv
    The document provides single-entry accounting information for HINDI NAGBIBIRO SI DOC G Company for the periods ended January 1 and June 30. It includes account balances, cash flow information and questions to determine sales, purchases, operating expenses and net

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    PROBLEM 6: CASH TO ACCRUAL: Enterprises records all transactions on the cash basis.

    The company’s accountant prepared the following income statement at the end of the company’s
    first year of operations:

    SIGURADO DUGO UTAK KO Enterprises


    Income Statement
    For the year ended December 31, 2017

    Sales P 2,419,200
    Selling and administrative expenses:
    Salaries expense P 748,800
    Rent expense 432,000
    Utilities expense 278,400
    Equipment 288,000
    Commission expense 362,880
    Insurance expense 57,600
    Interest expense 28,800 2,196,480
    Net income P 222,720

    You have been asked to prepare an income statement on the accrual basis. The following
    information is given to you to assist in the preparation:

    (a) Amounts due from customers at year-end were P268,800. Of this amount, P28,800 will
    probably not be collected.
    (b) Salaries of P105,600 for December 2017 were paid on January 5, 2018.
    (c) SIGURADO DUGO UTAK KO rents its building for P28,800 a month, payable quarterly
    in advance.
    The contract was signed on January 1, 2017.
    (d) The bill for December’s utility costs of P25,920 was paid January 10, 2018.
    (e) Equipment of P288, 000 was purchased on January 1, 2017. The expected life is 5 years,
    no salvage value. Assume straight line depreciation.
    (f) Commissions of 15% of sales are paid on the same day cash is received from customers.
    (g) A 1-year insurance policy was issued in company assets on July 1, 2017. Premiums are
    paid annually in advance.
    (h) SIGURADO DUGO UTAK KO borrowed P480,000 for one year on May 1, 2017.
    Interest payments based on an annual rate of 12% are made quarterly, beginning with the
    first payment on August 1, 2017.

    QUESTION:

    How much is the net income before income tax under the accrual basis of accounting?
    a. P616,800 c. P631,200
    b. P343,200 d. P388,800
    PROBLEM 10: SINGLE ENTRY: We were given the following information which were
    obtained from the single-entry records of HINDI NAGBIBIRO SI DOC G Company :

    January 1 June
    30

    Interest receivable P 14,400 P 11,520


    Accounts receivable 648,000 1,267,200
    Notes receivable 216,000 172,800
    Merchandise inventory 547,200 144,000
    Store and office equipment (net) 468,000 432,000
    Prepaid operating expenses 36,000 31,680
    Interest payable 4,320 7,200
    Accounts payable 504,000 360,000
    Notes payable 144,000 172,800
    Accrued operating expenses 38,880 72,000

    An analysis of the cashbook shows the following:

    Balance, January 1
    P216,000
    Receipts:
    Interest income P 28,800
    Accounts receivable 518,400
    Notes receivable 216,000
    Investment by HINDI NAGBIBIRO SI DOC G 86,400
    849,600

    P1,065,600
    Disbursements:
    Interest expense P 21,600
    Accounts payable 748,800
    Notes payable 115,200
    Operating expenses 244,800 1,130,400
    Balance, June 30-bank overdraft
    (P64,800)

    Interest receivable

    AR & NR
    MI

    Store and Office equipment (net)

    Prep OE/ Accrued OE


    Interest payable

    AP / NP

    Income statement
    Sales
    Less COS
    GP
    Less OE exc. Dep
    Depreciation
    Add other income int. inc
    Less other expenses int exp
    Net income / Net loss

    QUESTIONS:

    Based on the above and the result of your audit, determine the following for the six
    months ended June 30,2015:

    1. Sales
    a. P1,310,400 c. P158,400
    b. P1,137,600 d. P1,396,800
    2. Purchases
    a. P691,200 c. P979,200
    b. P604,800 d. P748,800

    2. Operating expenses, excluding depreciation


    a. P273,600 c. P282,240
    b. P207,360 d. P277,920

    3. Net loss
    a. P 5,760 c. P 182,880
    c. P158,400 d. P1,465,920

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