ASSIGNMENT #1: SINGLE ENTRY AND CASH AND ACCRUAL BASIS

NAME: __________________________________ SECTION:_____ SCORE:_______

INSTRUCTION:
• Write your final answers on the blank. Use PERMNANENT BLACK BALLPEN.
• ERASURES are NOT ALLOWED on the final answer. Any form of erasures are INCORRECT.
1. ____________ 3. ____________ 5. ____________
2. ____________ 4. ____________

PROBLEM 1
TWICE Company disclosed the following changes:
Cash 480,000 increase
Accounts Receivable 300,000 decrease
Merchandise Inventory 3,100,000 increase
Accounts Payable 420,000 increase

During the year, the owner borrowed P4,000,000 in notes from the bank and paid off notes
of P3,000,000 and interest of P240,000. Interest of P100,000 is accrued on December 31.
There was no interest payable at the beginning of the year.

In the current year, the owner transferred certain trading securities to the business and
these were sold for P1,500,000 to finance purchase of merchandise. The owner made
annual withdrawal of P520,000.
1. What is the net income for the current year?

PROBLEM 2
PABLO DIMASALANG started his food business on January 1 of 2023. The owner decided
to use single-entry in recording its day-to-day operation. It became also the practice of the
business to record all sales and purchase transactions on account.

At the end of the year, the following information were provided:

Cash 900,000
Accounts receivable 350,000
Accounts payable 450,000
Merchandise Inventory – Ending 500,000
Capital – total investment in cash 1,200,000
Expenses paid in cash 75,000

During the year, the entity collected P950,000 from the customers.
2. What is the amount of net income for the year?
3. What is the amount of the cost of goods sold for the year?

PROBLEM 3
HeiHei Company provided the following selected accounts, cash, receipts and
disbursements for 2020:
December 31 January 1
Accounts receivable 250,000 300,000
Notes receivable 150,000 100,000
Accounts payable 120,000 160,000
Notes payable 200,000 150,000
Prepaid insurance 30,000 10,000

Cash receipts for 2020

Cash sales 500,000
Collections of accounts, net of discounts of P40,000 1,800,000
Collections of notes receivable 80,000
Bank loan – one year, dated December 31, 2020 100,000
Purchase returns and allowances 60,000
ASSIGNMENT #1: SINGLE ENTRY AND CASH AND ACCRUAL BASIS

Cash disbursements for 2020

Cash purchases 130,000
Payments of accounts payable, net of discounts of P20,000 1,500,000
Payments of notes payable 400,000
Insurance 220,000
Other expenses 650,000
Sales returns and allowances 50,000

4. Under accrual basis, what amount should be reported as gross sales?

5. Under accrual basis, what amount should be reported as gross purchases?

SOLUTION FOR PROBLEM 1-3: