GMA Radio received P600,000 cash from Breeze Company on May 1 for twelve advertisements (good for...

 

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GMA Radio received P600,000 cash from Breeze Company on May 1 for twelve advertisements (good for thirty seconds each) spread evenly P200,000 a month for May. June and July a) How much advertising revenue should GMA Radio report for the month of May assuming the cash concept is applied? b) How much should be reported as advertising revenue by GMA Radio for the month of May assuming the accrual concept is applied? 2. Philippine Air Lines has provided the following information regarding ticket sales and collections from September to November: Cash received in September for October flights Cash received in October for October flights Cash received in October for November flights Cash received in November for November flights a) Applying the cash concept, how much should be reported by Philippine Air Lines as Ticket Sales revenue for October? b) Applying the accrual concept, how much should be reported by Philippine Air Lines as Ticket Sales revenue for October? 3. Bench Consultancy has provided the following information regarding cash payments to its employees for the months of May and June Salary paid in May for work performed by employees in April, P18,000 Salary paid in May for work performed by employees in May, P25,000 Salary paid in June for work performed by employees in May, P19,000. a) Applying the cash concept, what amount of salary expense will be reported for May? b) Using the accrual rule, what amount of salary expense will be reported for May? P5,000,000 3,000,000 4,000,000 6,000,000 4. Healthy Foods and Drinks gave the following transactions for the month of June: a. Revenues of P100,000 were earned but only P80,000 was received in cash. b. Bank loans of P20,000 were paid off. Kitchen equipment of P25,000 was purchased and paid in cash d. Expenses of P75,000 were incurred but only P70,000 was paid in cash c. Additional P60,000 in cash was contributed by the owner. f. Owner made a cash withdrawal of P5,000 for personal use. Using the matrix, determine the profit, cash balance and equity as at the end of June. Beginning balances are already given for cash and owner's equity. Apply the accrual rule. Be sure to transfer the profit (loss) to the owner's equity column. Transaction Cash Owner's Equity Oct. 1 Balance Revenues (Expenses) P74,500 P150,000 Analyze the following transactions and fill up the given matrix. The answer to the first transaction is given as an example. Revenues and expenses in the income statement column will give you the net income which you should transfer to owner's equity before you get the final balances. Business Transactions 1 Owner invested P 50,000 cash in business 2 Paid,P10,000 cash for utilities 3 Paid P5,000 cash for wages 4 Issued note for cash borrowed, P100,000. 5 Received P15,000 cash for rooms sold. 6 Bought land P500,000 and issued a note 7. Bought equipment P8,000 and paid cash. 8 Room services on credit, P12,000. 9 Collected 50% of the accounts in no 8. 10 Owner withdrew cash, P7,500. Accounts receivable Office supplies Luna, Capital Office equipment Accounts payable Income Statement 50,000 22,500 +Revenues - Expenses 380,000 280,000 75.000 Statement of Financial Position Total Owner's Liabilities Equity Net Income(Net Loss) Final balances The fundamental identity of balance should always be maintained in the last line. XX Total Assets +50,000 6. October 1, Natalie Luna formed a consulting firm. At the end of October, business records show the following items and amounts. Cash P 120,000 +50,000 Luna, Drawings Consulting fees earned Rent expense Salaries expenses Telephone expense Advertising expenses Luna, Capital represents the beginning investment of the owner. Required: ? P 33,000 150,000 25,500 60,000 7,200 6,800 a. Select the revenue and expense accounts and prepare an income statement for the month ended October 31, 2015. GMA Radio received P600,000 cash from Breeze Company on May 1 for twelve advertisements (good for thirty seconds each) spread evenly P200,000 a month for May. June and July a) How much advertising revenue should GMA Radio report for the month of May assuming the cash concept is applied? b) How much should be reported as advertising revenue by GMA Radio for the month of May assuming the accrual concept is applied? 2. Philippine Air Lines has provided the following information regarding ticket sales and collections from September to November: Cash received in September for October flights Cash received in October for October flights Cash received in October for November flights Cash received in November for November flights a) Applying the cash concept, how much should be reported by Philippine Air Lines as Ticket Sales revenue for October? b) Applying the accrual concept, how much should be reported by Philippine Air Lines as Ticket Sales revenue for October? 3. Bench Consultancy has provided the following information regarding cash payments to its employees for the months of May and June Salary paid in May for work performed by employees in April, P18,000 Salary paid in May for work performed by employees in May, P25,000 Salary paid in June for work performed by employees in May, P19,000. a) Applying the cash concept, what amount of salary expense will be reported for May? b) Using the accrual rule, what amount of salary expense will be reported for May? P5,000,000 3,000,000 4,000,000 6,000,000 4. Healthy Foods and Drinks gave the following transactions for the month of June: a. Revenues of P100,000 were earned but only P80,000 was received in cash. b. Bank loans of P20,000 were paid off. Kitchen equipment of P25,000 was purchased and paid in cash d. Expenses of P75,000 were incurred but only P70,000 was paid in cash c. Additional P60,000 in cash was contributed by the owner. f. Owner made a cash withdrawal of P5,000 for personal use. Using the matrix, determine the profit, cash balance and equity as at the end of June. Beginning balances are already given for cash and owner's equity. Apply the accrual rule. Be sure to transfer the profit (loss) to the owner's equity column. Transaction Cash Owner's Equity Oct. 1 Balance Revenues (Expenses) P74,500 P150,000 Analyze the following transactions and fill up the given matrix. The answer to the first transaction is given as an example. Revenues and expenses in the income statement column will give you the net income which you should transfer to owner's equity before you get the final balances. Business Transactions 1 Owner invested P 50,000 cash in business 2 Paid,P10,000 cash for utilities 3 Paid P5,000 cash for wages 4 Issued note for cash borrowed, P100,000. 5 Received P15,000 cash for rooms sold. 6 Bought land P500,000 and issued a note 7. Bought equipment P8,000 and paid cash. 8 Room services on credit, P12,000. 9 Collected 50% of the accounts in no 8. 10 Owner withdrew cash, P7,500. Accounts receivable Office supplies Luna, Capital Office equipment Accounts payable Income Statement 50,000 22,500 +Revenues - Expenses 380,000 280,000 75.000 Statement of Financial Position Total Owner's Liabilities Equity Net Income(Net Loss) Final balances The fundamental identity of balance should always be maintained in the last line. XX Total Assets +50,000 6. October 1, Natalie Luna formed a consulting firm. At the end of October, business records show the following items and amounts. Cash P 120,000 +50,000 Luna, Drawings Consulting fees earned Rent expense Salaries expenses Telephone expense Advertising expenses Luna, Capital represents the beginning investment of the owner. Required: ? P 33,000 150,000 25,500 60,000 7,200 6,800 a. Select the revenue and expense accounts and prepare an income statement for the month ended October 31, 2015.

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