Reference no: EM133146756

Question 1 - Presented below is selected information pertaining to the Cone Company:

Cash balance, January 1, 2021- P13,000

Accounts receivable, January 1, 2021- P19,000

Collections from customers in 2021- P210,000

Capital account balance, January 1, 2021- P38,000

Total assets, January 1, 2021- P75,000

Cash investment added, July 1, 2021-P5,000

Total asset, December 31, 2021- P101,000

Cash balance, December 31, 2021- P20,000

Accounts receivable, December 31, 2021- P36,000

Merchandise taken for personal use during 2021- P11,000

Total liabilities, December 31, 2021- P41,000

How much is the net income for 2021?

a. P26,000

b. P28,000

c. P30,000

d. P22,000

Question 2 - In 2021, Allen company reported cash basis income of P 7,800,000. Tracing back its records, accounts receivable and accounts payable on December 31, 2021 were P5,200,000 and P 1,950,000 respectively. During the year, the accounts receivable increased by 200% while accounts payable decreased by 50%. How much were net income using accrual method?

a. P7,150,000

b. P8,450,000

c. P7,800,000

d. P12,350,000