HYPERION Corporation's accounting records provided the following information: 1. ATHENA Company acquired rights to a patent from ARTEMIS Corp. under a licensing agreement that required an advance royalty payment when the agreement was signed. ATHENA remits royalties earned and due under the agreement on October 31 each year. Additionally, on the same date, ATHENA pays in advance estimated royalties for the next year. ATHENA adjusts prepaid royalties at year-end. Information for the year ended December 31, 2020 are shown below: DATE 01/01/20 Prepaid royalties 10/31/20 Royalties payments (charged to royalties expense) 12/31/20 Year-end credit adjustment to royalty expense AMOUNT $130,000 220,000 50,000 In its December 31, 2020 statement of financial position, ATHENA should report prepaid royalties of A. P 80,000 C. P180,000 B. P170,000 D. P300,000 2. During the year ended 30 September 2020, CHRONOS Corp. recorded the following cash transactions: Payment of an annual insurance premium of P12,000. This covered the period to 31 December 2020. Receipt of P6,000 in respect of rent from a tenant covering the three month period to 30 November 2020. What is the impact on the profit of making the year end adjustments for prepaid expenditures and unearned income at 30 September 2020. A. P1,000 increase B. P1,000 decrease C. P7,000 increase D. P7,000 decrease 3. On December 31, 2020, the following accounts appear in the trial balance of POSEIDON Company: Current assets Noncurrent assets Current liabilities Noncurrent liabilities 12/31/19 P 240,000 1,600,000 12/31/20 ? ? 580,000 1,500,000 130,000 ? All assets and liabilities of the company are reported in the schedule above. Working capital of 92,000 remain unchanged from 2019 to 2020. Net income in 2020 was P88,000. No dividends were declared during 2020 and there were no other changes in equity. Total noncurrent liabilities at December 31, 2020 would be: A. P480,000 B. P392,000 C. P616,000 D. P568,000 5. At balance sheet date, EPIMETHEUS Limited had the following net balance from cash flows: Operating activities: Investing activities: Financing activities: P53,440 P45,230 P(47,860) If the company had an ending balance of cash amounting to P107,310, what was the comparative ending balance of cash for the previous year? A. P163,380 B. P158,120 C. *56,500 D. P(39,220) 6. The cash account of PROMETHEUS Corp. on December 31, 2020 has a balance of P127,600, which consists of the following: Bills and coins on hand Petty cash, including petty cash vouchers of P650 P 52,780 Balance in savings account with a bank closed by the BSP Customer's check dated January 15, 2021 Credit memo from suppliers for purchases returns Checking account balance in Mt. Olympus Bank Inventories on January 1: Direct labor P1,420,000 Raw Materials P 350,000 Indirect labor Postage stamps Money order 900,000 Goods in Process 400,000 Realty tax-factory building IOU of an employee 150,000 Finished Goods 319,000 Realty tax-salesroom & office 120,000 Purchases of raw materials 4,200,000 Purchases returns & allowances 120,000 Depreciation-factory building Depreciation-salesroom & office 90,000 50,000 The correct cash balance on December 31, 2020 of PROMETHEUS Corp is: A. 975,130 Freight in 80,000 Light and power 1,000,000 B. P75,930 C. P76,580 D. #76,380 1,000 35,000 8,000 6,500 120 800 400 22,000 Of the light and power, 60% was consumed in the factory, 25% in the office and 15% in the salesroom Inventories on December 31: Raw materials - P380,000; goods in process - P500,000; finished goods -P250,000 The cost of materials used is: 7. The policy of ATLAS Company is to debit bad debt expense for 3% of all new sales. The following are the Company's sales and allowance for bad debts for the past four years: SALES ALLLOWANCE FOR BAD DEBTS A. P4,250,000 B. P4,170,000 C. P4,130,000 D. 94,050,000 2017 $3,000,000 2018 2,950,000 2019 3,120,000 2020 2,420,000 P45,000 56,000 60,000 75,000 Compared to 2019, the accounts written off in 2020 decreased by A. P32,000 B. 940,000 C. P57,600 D. P10,000