WEEK 5.docx - Module 11 CASH AND ACCRUAL BASIS AND SINGLE...

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Module 11 CASH AND ACCRUAL BASIS AND SINGLE ENTRY Exercises/Assignments Answer the following Problems. For Problems 1 to 3: The following information was taken from the records of JUGATE PAIRED Co.Cash purchases – gross 1,200,000 Trade accounts payable – beg. 2,000,000 Trade accounts payable – end 1,600,000 Trade notes payable decreased by 800,000 Cash payments on payables 4,000,000 Purchase returns and discounts (inclusive of P60,000 receipts from suppliers) 80,000 Inventory increased by 400,000 1. How much is the net purchases under cash basis of accounting? a. 4,740,000 b. 2,820,000 c. 3,940,000 d. Some other answer 5,140,000 2. How much is the cost of goods sold under cash basis of accounting? 3. How much is the net purchases under accrual basis of accounting? 4. How much is the goods sold under accrual basis of accounting? 5. AMEN Co. provided the following data regarding its financial position: January 1, 2020 Current Asset P5, 000,000Current Liability 2,000,000 Noncurrent Asset 8,000,000 Noncurrent Liability 4,000,000 Thefollowing changes occurred during 2020:1. Current Asset increased to P6, 000, 000. 2. Current Liability increased by P500, 000.
3. Noncurrent Asset decreased by P1, 000, 000. 4. Noncurrent Liability decreased to P2, 500, 000. 5. ADMU issued 100,000 ordinary shares with par value of P10 at P20/share. 6. Cash dividends of P300,000 were declared during the year. Note: No other transactions affect the equity except those stated. What is the profit/(loss) for the year ended December31,2020? a. P1, 700, 000 b. (P700,000) c. P2,700,000 d. (P1,700,000) 6. Incomplete accounting records using only a cash book is a characteristic of 7. Compared to its cash basis net income for the current year, an entity's accrual basis net income increased when it 8. Compared to the accrual basis of accounting, the cash basis of accounting understates income by the net decrease during the accounting period of

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