7. The following information pertains to Spee Company's 2014 sales. Cash sales Gross P 400,000 Retum and allowances 20,000 Credit sales Gross 600,000 Discounts 30,000 On January 1, 2014, customers Owed Spee P200,000. On December 31, 2014, customers owed Spee P150,000. Spee uses the direct write off method for bad debts. No bad debts were recorded in 2014. Under the cash basis of accounting, what amount of revenue should Spee report for 2014? A. P1,000,000 B. P 950,000 C. P 850,000 D. P 380,000 8. The following balances were reported by Easy Company on December 31, 2014 and 2013. 2014 2013 Accounts payable P 700,000 P 500,000 Notes payable 800,000 300.000 On July 1, 2014, the company issued a 1-year 12% note for a bank loan of P200,000. Total payments to suppliers in 2014 amounted to P2.200,000, after purchase discounts of P50,000. During 2014, the company returned merchandise costing P100,000. What is the amount of gross purchases for 2014 under accrual basis? A. P 3,050,000 B. P 2,850,000 C. P 2,700,000 D. P 900,000 9. Hard Company maintains its accounting records on the cash basis but restates it financial statements to the accrual method of accounting. Hard has P6,000,000 in cash basis income for 2014. The following information pertains to the operations for the years ended December 31, 2014 and 2013 2014 2013 Accounts receivable P4,000,000 P 2,000,000 Accounts payable 1,500,000 3,000,000 Under the accrual method, what amount should Hard report in its 2014 income statements? A. P 2.500,000 B. P 5,500,000 C. P 6,500,000 D. P 9,500,000 10. Clay Company borrows money under various loan agreements involving notes discounted and notes requiring interest payments at maturity. During the year ended December 31, 2014, Clay paid interest totaling P100,000. Clay's December 31 balance sheets included the following information: 2013 2014 Prepaid interest P 23,500 P 18,000 Interest payable 45,000 53,500 8How much interest should Clay report for 2014? A. P 86,000 B. P 97.000 C.P 103,000 D.P 114,000 11. Under Easter Company's accounting system, all insurance premiums paid are debited to prepaid insurance. Information for the year ended December 31, 2014. is as follows: Prepaid insurance at January 1 P 100,000 Charge to insurance expense 440,000 Prepaid insurance at December 31 120,000 What was the amount of insurance premium paid in 2014? A. P 340,000 B. P 420.000 C.P 440,000 A17NC-009 D.P 460,000 Page 2 of 4