Case 1.

Tim Corporation reported total purchases of P3,200,000 in its accrual basis financial statement onDecember 31, 2X20.

Additional information revealed the following:

Accounts payable, December 31, 2X19 P900,000

Accounts payable, December 31, 2X20 1,250,000

? What is the amount of purchases under the cash basis on December 31, 2X20? _______________

Case 2.

Under the accrual basis, the rental income of Patrick Company for 2X20 is P600,000.

Additionalinformation regarding rental income are presented below:

Unearned rental income, January 1, 2X20 P50,000

Unearned rental income, December 31, 2X20 75,000

Accrued rental income, January 1, 2X20 30,000

Accrued rental income, December 31, 2X20 40,000

? Under the cash basis, how much rental income should be reported by Patrick Company in 2X20?

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Case 3.

Don Mario Company acquires copyright from authors, paying in advance royalties in some cases andothers, paying royalties within 30 days of year-end. Don Mario reported royalty expense of P375,000for the year ended December 31, 2X20.

The following data are included in the corporation's December

balance sheet:

2X19 2X20

Prepaid royalties P60,000 P50,000

Royalties payable 75,000 90,000

? Under the cash basis, what amount of royalty expense should be reported in 2X20 profit or loss?

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Instruction: Answer the following cases (3 items x 5 points): Case 1. Tim Corporation reported total purchases of P3,200,000 in its accrual basis financial statement on December 31, 2X20. Additional information revealed the following: Accounts payable, December 31, 2X19 P900,000 Accounts payable, December 31, 2X20 1,250,000 What is the amount of purchases under the cash basis on December 31, 2X20? Case 2. Under the accrual basis, the rental income of Patrick Company for 2X20 is P600,000. Additional information regarding rental income are presented below: Unearned rental income, January 1, 2X20 P50,000 Unearned rental income, December 31, 2X20 75,000 Accrued rental income, January 1, 2X20 30,000 Accrued rental income, December 31, 2X20 40,000 . Under the cash basis, how much rental income should be reported by Patrick Company in 2X20? Case 3. Don Mario Company acquires copyright from authors, paying in advance royalties in some cases and others, paying royalties within 30 days of year-end. Don Mario reported royalty expense of P375,000 for the year ended December 31, 2X20. The following data are included in the corporation's December balance sheet: 2X19 2X20 Prepaid royalties P60,000 P50,000 Royalties payable 75,000 90,000 . Under the cash basis, what amount of royalty expense should be reported in 2X20 profit or loss