1.

Ugly Company has the following information:

Prepaid insurance – January 1 1,600,000

Prepaid insurance – December 800,000

Insurance payable decrease by 1,200,000

Insurance payments 3,600,000

How much is the insurance expense under cash basis?

 4800000

2. Alex Company prepares its statement of cash flows using the direct method for
operating activities. For the year ended December 31, 2020, Alex Company reports
the following activity:

Sales on account 1,300,000

Cash sales 740,000

Decrease in accounts receivable 610,000

Increase in accounts payable 72,000

Increase in inventory 48,000

Cost of goods sold 975,000

What is the amount of cash payments to suppliers reported by Alex Company for the
year ended December 31, 2020?
 915000
3. The following balances were reported by Trample Company at December 31, 2019
and December 31, 2015:
 December 31, December 31,
 
2019 2018

Inventory 260,000 290,000

Accounts payable   75,000   50,000

Trample paid suppliers P490,000 during the year ended December 31, 2019. What
amount should Trample report for cost of goods sold in 2019?
 545000

Use the following information for the next two (2) questions:
Bea maintains the accounting records of Fajardo Company on a cash basis. During 2019,
Fajardo Company collected P145,000 from its customers and paid P54,000 in expenses.
The following were provided in Bea’s preparation of an accrual basis income statement:

Increase
Account
(Decrease)

Accounts receivable 9,000

Unearned service revenue 5,000

Accrued expenses (8,000)

Prepaid expenses 4,000

4. The amount of service revenue to be reported in 2019 under accrual basis of

accounting is
154000

5. The amount of operating expenses to be reported in 2019 under the accrual basis of
accounting is
 42000

Use the following information for the next two (2) questions:
Foreneste Company uses cash basis accounting. The company made P1,000,000 in
payments to its supplies during the year. Foreneste’s beginning inventory was P40,000
and its ending inventory was P70,000. Moreover, Foreneste had a beginning Accounts
payable of P100,000 and an ending Accounts payable of P140,000.
6. What is Foreneste’s accrual basis purchases for the year?
1040000

7. What is Foreneste’s cost of goods sold for the year?

1010000

8. Under the accrual basis, rental income of Jaboli Company for the calendar year 2021 is
P1,200,000. The company had a balance of P100,000 in its Unearned Rental Income at the
beginning of the year and P150,000 at the end of the year. It also had a balance of P60,000 in its
Accrued Rental Income at the beginning of the year and P80,000 at the end. What is the rental
income under the cash basis of accounting?

1230000
9. For the year ended December 31, 2019, Knightfall Company reports the following
activity:

Sales on account 1,300,000

Cash sales 740,000

Decrease in accounts receivable 610,000

Increase in accounts payable 72,000

Increase in inventory 48,000

Cost of goods sold 975,000

What is the amount of cash collections from customers reported by Knightfall Company
for the year ended December 31, 2019?
2650000

Use the following information for the next five (5) questions:
You were able to gather the following information of Vergara Corporation for the year
ended December 31, 2020:

  January 1 December 31

Accounts receivable 6,400,000 4,000,000

Accounts payable 4,632,000 2,621,000

Accrued wages      85,000    125,000

Advertising supplies inventory      35,000      75,000

Accrued advertising expense      14,250      40,000

Prepaid insurance      25,000                0

Unexpired insurance               0       41,000

During the year:

 Amount collected from customers, P10,000,000.

 Total payments to suppliers of merchandise, P13,618,000.
 Wages paid, P3,050,000.
 Advertising paid which includes, P300,000.
 Insurance premium paid, P125,000.

10. What is the total sales for 2020 under accrual basis?
7600000
11. What is the total purchases for 2020 under accrual basis?

11607000

12. What is the wages expense for 2020 under accrual basis?

3090000

13. What is the advertising expense in 2020 under accrual basis?

325750

14. What is the insurance expense in 2020 under accrual basis?

109000

15. The following balances were reported by Trample Company at December 31, 2016
and December 31, 2015:

  December 31, 2015 December 31, 2016

Inventory 290,000 260,000

Accounts payable   50,000   75,000

Trample paid suppliers P490,000 during the year ended December 31, 2016. What
amount should Trample report for cost of goods sold in 2016?
545000

16. The Retry Company uses cash-basis accounting for their records. During 2020, Retry
collected P500,000 from its customers, made payments of P200,000 to its suppliers for
inventory, and paid P140,000 for operating costs.  Retry wants to prepare accrual-basis
statements.  In gathering information for the accrual-basis financial statements, Retry
discovered the following:

 Customers owed Retry P50,000 at the beginning and P35,000 at the end of the
year.
 Retry owed suppliers P20,000 at the beginning and P27,000 at the end of the
year.
 Retry's beginning inventory was P42,000, and its ending inventory was P44,000.
 Retry had prepaid expenses of P5,000 at the beginning and P7,400 at the end of
the year.
 Retry had accrued expenses of P12,000 at the beginning and P19,000 at the end
of the year.
 Depreciation for the year was P51,000.

Determine the accrual basis net income of Retry Company for the year ended December
31, 2020.
84400

17. The following information was taken from the 2019 financial statements of
Entrapment Corporation:

Inventory – January 1, 2019 90,000

Inventory – December 31, 2019 120,000

Accounts payable – January 1, 2019 75,000

Accounts payable – December 31, 2019 120,000

Sales 600,000

Cost of goods sold 450,000

What amount should Entrapment Corporation report as cash payments to suppliers?

435000

Use the following information for the next three (3) questions:
Damalerio Corporation uses the cash basis of accounting. Damalerio collected
P1,400,000 from its customers during the year. Damalaerio had P100,000 in Accounts
receivable at the beginning of the year, and P180,000 in Accounts receivable at the end
of the year. The company also had P40,000 and P50,000 of allowance for bad debts at
the beginning and at the end of the year, respectively.
What is Damalerio’s Sales Revenue under the accrual basis of accounting?

1480000

19. What is Damalerio’s Sales Revenue under the accrual basis of accounting assuming that the
company wrote off P30,000 of tis accounts during the year and recovered P10,000 from
previously written off accounts?

1510000

20. What is Damalerio’s Sales Revenue under accrual basis of accounting assuming that
company had sales discount amounting to P50,000 and sales returns (all before collections)
amounting to P70,000.

1600000