I. Cash Basis Accounting Problem 1. The following transactions affecting the accounts receivable of WON Inc. took place during the year, ended December 31,2010: Sales Sales discount Cash received from cash customers Accounts receivable written off as worthless Credit memo issued to credit customers for sales returns Cash refunds given to cash customers for sales returns Recoveries on accounts receivable written off as uncollectible as uncollectible in prior periods (not included in cash amount stated above) The following balances were taken from the January 1,2010 Statement of Financial Position: Accounts Receivable Allow. For Bad Debts 950,000 100,000 P5,900,000 126,000 *2,100,000 50,000 .250,000 20,000 80,000 The entity provided for bad debt expense by crediting allowance for bad debts in the amount of 70,000 for the year. The net realizable value of Accounts Receivable on December 31,2010 is P1,100,000. What is the cash basis revenue for the year ended December 31,2010? Problem 2. The following information appears in ION Inc.'s records for the year ended December 31,2010: Inventory, January 1 Purchase returns Freight In P 650,000 80,000 Sales Sales returns Accounts Payable, Jan. 1 Accounts Payable, Dec. 31 60,000 3,400,000 30,000 300,000 200,000 On December 31,2010, a physical inventory revealed that the ending inventory was only P571,000. The gross profit on sales has remained constant at 30% in recent years. What is the cash basis cost of sales for the year ended December 31,2010? Problem 3. The following information appears in NEO Inc.'s records for the year ended December 31,2010: Inventory, January 1 Purchase returns Freight In Sales Sales returns Accounts Payable, Jan. 1 Accounts Pay. Dec. 31 P 520,000 60,000 100,000 4,900,000 400,000 2,000,000 2,500,000 On December 31,2010 a physical inventory revealed that the ending inventory was only P200,000. The gross profit based on cost has remained at 50% in recent years. What is the cash basis cost of sales?