11. At the beginning of the current year, Jimin started a retail merchandising business. During the current year, the business paid trade creditors P2,000,000 in cash and suffered a net loss of P350,000. The ledger preclosing balances at year-end included the following:

Accounts Receivable 600,000

Accounts Payable 750,000

Capital (total investment in cash) 2,000,000

Expenses (paid in cash) 100,000

Merchandise (unadjusted debit balance) 700,000

There were no withdrawals. All sales and purchases were on credit. The merchandise account is debited for purchases and credited for sales. What is the amount of sales for the year?

a. 2,750,000

b. 2,050,000 ...

c. 2,650,000

d. 700,000

12. Using the same information in No. 11, what is the cash balance at year-end?

a. 1,350,000

b. 2,000,000

c. 1,450,000

d. 3,450,000

13. Using the same information in No. 11, what is the merchandise inventory at year-end?

a. 700,000

b. 450,000

c. 750,000

d. 0

14. Accrual accounting adheres to which of the following?

a. Materiality Principle and Conservatism Principle

b. Time Period and Consistency

c. Matching Principle and Historical Cost Principle

d. Full Disclosure and Objectivity Principle

15. Jin Company provided the following selected accounts, cash receipts and disbursements for the current year:

December 31 January 1

Accounts Receivable 250,000 300,000

Notes Receivable 150,000 100,000

Accounts Payable 120,000 160,000

Notes Payable 200,000 150,000

Prepaid Insurance 30,000 10,000

Cash Receipts for current year:

Cash sales 500,000

Collections of accounts receivable, net of discounts of P40,000 1,800,000

Collections of notes receivable 80,000

Bank loan - one year, dated December 31 100,000

Purchase returns and allowances 60,000

Cash Disbursements for current year:

Cash purchases 130,000

Payments on accounts payable, net of discounts of P20,000 1,500,000

Payments on notes payable 400,000

Insurance 220,000

Other expenses 650,000

Sales returns and allowances 50,000

Under the accrual basis, what is the amount of gross sales for the current year?

a. 2,420,000

b. 2,470,000

c. 1,920,000

d. 1,970,000

16. Using the same information in No. 15, what is the amount of gross purchases for the current year?

a. 1,960,000

b. 2,020,000

c. 1,830,000

d. 1,890,000

22. The equipment was purchased at the beginning of 2017 for P340,000. At the time of its purchase, the equipment was estimated to have a useful life of six years and a salvage value of P40,000. The equipment was depreciated using the straight-line method of depreciation through 2019. At the beginning of 2020, the estimate of useful life was revised to a total life of eight years and the expected salvage value was changed to P25,000. The amount to be recorded for depreciation for 2020, reflecting these changes in estimates, is

a. P20,625

b. P33,000

c. P38,000

d. P39,375