Problem 4 Ahw Tsu prepares nancial statements on the cash basis. The statement of financial position on December 31, 2020 and the income statement for the current year are as follows: Cash P1500000 Furniture and equipment 2,500,000 P4000000 Note payable P1,000.000 Capital: Balance. January 1 P1,600.000 Add: Net income 2,250,000 P0850000 Less: Withdrawals 850,000 3,000,000 P41000000 Professional fees P5000000 Expenses: Rent P1200000 Supplies 800,000 Other expenses 750,000 2,750,000 Net income P2250000 It was decided that the nancial statements should be prepared on the accrual basis. Relevant information is as follows: 1) The furniture and equipment were acquired on July 1, 2019. The estimated life is 10 years. 2) The 12% promissory note us dated April 1, 2020 and matures in one year. interest is payable on the date of maturity. 3) The accounts receivable as at December 31, 2020 and 2019 is P750000 and P500000, respectively. 4) Accrued rent on December 31, 2020 P100000. 5) Unused office supplies as at December 31, 2020 and 2019 is P250000 and P300000, respectively