Problem Solving: Please answer the following problems showing your solutions, Double Rule and Encircle Final Answers. This must be done thru your handwriting placed in a Bond Paper. Take a picture of your output and attached it here. 1. On July 1, 2019 IT Corp acquired a machinery worth Php 2,500,000 from DIKO Co. Term of the contract calls for a downpayment of Php 500,000 and signing a 2 year 10% note payable for the balance. Interest is payable quarterly. The existing loan agreement does not carry a provision to refinance. During September, IT Corp was experiencing financial difficulty due to COVID-19 and was unable to pay the periodic interest. a. What amount of current liability should IT Corp report in its December 31, 2019 balance sheet assuming DIKO Co. agreed at balance sheet date not to demand payment as a consequence of the breach? b. What amount of current liability should IT Corp report in its December 31, 2019 balance sheet assuming DIKO Co. agreed to provide a grace period ending at least twelve months to rectify the breach?

2. A truck owned and operated by BASICzxc Company was involved in an accident with an auto driven by Julian on January 12, 2019. BASICzxc Company received notice on April 24, 2019 of a lawsuit for Php 800,000 damages for a personal injury suffered by Julian. BASICzxc Company counsel believes it is reasonably possible that Julian will be successful against the company for an estimated amount in the range between Php 100,000 and Php 400,000. No amount within this range is a better estimate of potential damages than any other amount. It is expected that the lawsuit will be adjudicated in the latter part of 2020. What amount of loss should BASICzxc Company accrue at December 31, 2019?

3. In November and December of 2020, adventure Company received Php 792,000 for 1,000, 3 year subscriptions at Php 264 per issue per year, starting with the January 2006 issue. adventure elected to include the Php 792,000 in its 2020 income statement for tax purposes. What amount should advneture report in its 2020 balance sheet as unearned subscription revenue?

4. In November and December 2020, Sweet Company, a newly organized magazine publisher, received Php 72,000 for 1,000 three year subscriptions at Php 24,000 per year, starting with the November 2020 issue of the magazine. Sweet elected to include the entire Php 72,000 in its 2020 income tax return. How much should Sweet report in its 2020 balance sheet as unearned subscriptions?

5. During 2019, POGI Company sold 500,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with Php 16, entitles the customer to a baking pan. POGI Company pays Php 20 per pan and Php 2 handling and shipping. POGI Company estimates that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2019. What amount should POGI Company report as liability for unredeemed coupons at December 31, 2019?