In November and December 20x7, Litchfield Company received P792,000 for 1,000, 3-year subscriptions at P264 per issue per year, starting with the January 20x8 issue. Litchfield elected to include
the entire P792,000 in its 20x7 income statement for tax purposes. What amount should Litchfield report in its 20x7 statement of financial position as unearned subscription revenue?
 
19. At December 31 20x7, Taystee Company had 10,000 gift certificates outstanding, which had been sold to customers during 20x7 for P100 each. Taystee operates on a gross margin of 60% of its sales. What amount of revenue pertaining to the 10,000 outstanding gift certificates should be deferred at December 31, 20x7?
 
20. Reznikov, Inc. provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporation's income in excess of P600,000 before income tax but
after deduction of the bonus. If income before income tax and bonus is P1,920,000 and the tax rate is 32%, the amount of the bonus would be?

Answer rating: 100% (QA)

Lets calculate the answers to each question 19 To calculate the unearned subscription revenue for Litchfield Company we need to determine the portion of the subscription revenue received in November a... View the full answer