Question
Casio Company keeps its records under the cash basis of accounting. You were asked to prepare its financial statements under the accrual basis as a
Casio Company keeps its records under the cash basis of accounting. You were asked to prepare its financial statements under the accrual basis as a requirement of a loan application with a bank. The following information were made available to you: Total collections from customers P800,000 Total payments to suppliers of merchandise 420,000 Total payments to employees for salaries 200,000 Total payments for rentals 140,000 Total customer returns including a P30,000 cash refund 90,000 Total purchase returns including a P20,000 cash refund 100,000 Recoveries of previously written off accounts 10,000 Audit notes: a. Outstanding customer invoices were at P150,000 and P225,000 at the beginning and at the end of the year, respectively. P5,000 of the outstanding invoice at the beginning of the year is doubtful of collection while P25,000 is doubtful at the end of the year. b. Outstanding suppliers' invoices were at P95,000 and P80,000 at the beginning and at the end of the year, respectively. c. Unsold merchandise inventory were at P55,000 and P85,000 at the beginning and at the end of the year, respectively. d. Unpaid employee's salaries were at P30,000 and P25,000 at the beginning and at the end of the year, respectively. e. The unexpired portion of rent at the end of the year was at P25,000.
11. What is the accrual basis gross sales?
12. What is the accrual basis gross purchases?
13. What is the accrual basis cost of goods sold?
14. What is the accrual basis salaries expense?
15. What is the accrual basis net income?
Step by Step Solution
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Step: 1
1 Accrual basis gross sales Sales per books cash basis P800000 Add Increase in receivables P225000 P...Get Instant Access to Expert-Tailored Solutions
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Step: 3
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