SYDNEY Consultants maintains its accounting records using the pure cash basis of accounting. During 2021, SYDNEY collected P1,590,000 from its clients and paid P877,000 in operating expenses. At December 31, 2020 and 2021, the following account balances were obtained: December 31, 2021 December 31, 2020 Professional fees receivable Unearned professional fees Prepaid operating expenses Accrued operating expenses 297,500 P 245,000 112,500 127,300 99.500 107,800 111,400 97,300

SYDNEY Consultants maintains its accounting records using the pure cash basis of accounting. During 2021, SYDNEY collected P1,590,000 from its clients and paid P877,000 in operating expenses. At December 31, 2020 and 2021, the following account balances were obtained: December 31, 2021 December 31, 2020 Professional fees receivable Unearned professional fees Prepaid operating expenses Accrued operating expenses 297,500 P 245,000 112,500 127,300 99.500 107,800 111,400 97,300

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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Five Incorporated maintains its accounting records using the cash basis but presents financial basis using the accrual method. For the year 2021, Five reported cash basis income of 532,000. Other information are as follows: Accounts Receivable, January 1 300,000 Accounts Receivable, December 31 150,000 Accounts Payable, January 1 400,000 Accounts payable, December 31 320,000 What is the accrual basis net income?
Shown below are selected accounts and their balances for the Zay Company as of December 31, 2021 Accounts Payable - P980,000; Accounts Receivable - P2,160,000; Allowance for Bad Debts - P250,000; Cash - P224,000; Wages Payable - P108,000; Trademarks - P450,000; Longterm advances to officers - P1,500,000; Inventory - P830,000; Income Taxes Payable - P720,000; Notes Receivable (short-term) - P970,000; Bond Redemption Fund - P1,800,000; Bonds Payable - P5,000,000; Premium on Bonds Payable - P400,000; Treasury Shares - P576,000 How much were the total current liabilities at December 31, 2021? a. P7,208,000 b. P1,808,000 c. P1,088,000 d. P980,000
2. ARNOLD maintains its accounting records on the cash basis. During 2020, he collected P185,000 from his clients and paid P92,000 in expenses. Upon examination of additional evidence, the following information was obtained: 1/01/20 12/31/20 Accounts receivable Unearned revenues Accrued expenses 9,000 7,000 3,000 Prepaid expenses 5,000 Requirements: 1) Total revenue in 2020. 2) Total expense for 2020. 3) Correct net income for 2020. 15,000 4,000 2,000 16,000
The 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 1950
RM Company disclosed the following information on December 31, 2021: Accrued rent expense Share dividends payable Accounts receivable, after deducting credit balances of customers accounts amounting to P42, 500 Estimated premium liability Cash in bank, net of bank overdraft of P22,650 54,000 750,000 179,300 65,800 481,900 215,500 Deferred tax liability Accounts payable, net of debit balances in suppliers' accounts amounting to P8,310 Unearned interest income 95,420 225,000 Mortgage payable, issued on March 1, 2012, maturing after 10 years Notes payable due to bank, 12% interest bearing note payable yearly, issued on August 31, 2021, maturing on August 31, 2022 Cash dividends payable SSS payable Serial bonds payable in 5 yearly installment of P250,000 payable every October 31 Estimated damages because of a supposed unsatisfactory performance on a contract, a possible obligation Income tax payable Notes payable 1,500,000 1,000,000 520,000 57,100 1,250,000 75,000 138,500 460,000…
T Corporation (the Company) has historically filed its federal and state income tax returns on the cash method of accounting. For the year ended December 31, 2021, management has decided to change its method of accounting to the accrual method. The Company's trial balance, as of and for the year ended December 31, 2021, is as follows. T Corporation Trial Balance 12.31.21 Debit Credit Cash 25,000 Accounts receivable 230,000 1,750,000 Equipment Accumulated depreciation Accounts payable Notes payable bank Common stock 1,750,000 45,000 20,000 5,000 Retained earnings (deficit) 1,315,000 Sales 4,250,000 Expenses 2,750,000 Totals 6,070,000 6,070,000 Required: 1. Calculate the Section 481 adjustment with respect to the Company's 2021 change in accounting method from the cash method to the accrual method. 2. Indicate whether the adjustment is a positive adjustment or a negative adjustment.
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