Jimmy Butler Baby a Filipino citizen, reported the following during the year:

1. P400,000 proceeds of life insurance of which Jimmy is the beneficiary (P600,000 still uncollectible)
2. P1,800,000 interest income, inclusive of P200,000 uncollectible and accrued interest
3. P200,000 decrease in value of investment in stocks.

1. Compute the gross income under the cash basis.
2. Compute the gross income under accrual basis.

A taxpayer reported the following data for 2023:

1. Total net sales made to customers were P5,000,000 in cash.
2. Goods purchased for sale totaled P2,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P1,200,000 and P300,000.
3. 2-year advanced rent of P600,000 to apply for 2024 and 2025 (annual rent is P300,000) was received from a sublease contract.
4. P800,000 total interest income from customers promissory note earned. P700,000 of this was collected.
5. Realized foreign exchange gains from foreign currency receivables totaled P60,000.

3. Using cash basis, compute the total income subject to income tax.
4. Using accrual basis, compute the total income subject to income tax.

Iligan, Inc., has the following receipt during 2023:

From service billings to clients P800,000

Advances from clients 300,000

Total cash collection P1,100,000

The P300,000 advances refer to services which will be rendered next year. Total uncollected billing increased from P300,000 on December 31,2022 to P480,000 on December 31,2023.

5. Compute the gross income using cash basis
6. Compute the gross income using accrual basis