Reference no: EM133000608

Bolitho Company is a service firm. It established a Deferred Revenue account because prepayments are required for its services. It also uses an Accrued Expense account to record billings of operating expenses.

• The Deferred Revenue account had a balance of P670,000 on January 1. Total credits to this account during the year is P8,714,000. Its ending balance increased to P978,000 at yearend.
• The Accrued Expense account had a balance of P421,000 on January 1. Total debits to this account during the year is P3,417,000 during the year. Its ending balance decreased by P120,000.

Problem 1: How much is the net income during the year?

Problem 2: How much is the total liabilities as of yearend?

Problem 3: How much is the net cash flow during the year? [Indicate whether it is an inflow or outflow.]