Lance is a dealer of household appliances. He reported the following in 2015 and 2016:
2015. 2016Installment sales. P500K. P800K
Cost of installemnt basisP250K. P440K
Collections. P300K. P600K
Lance's 2016 collection is inclusove of P100,000 accounts from 2015
Using the installment method, compute Lance's gross income subject to income tax in 2016
A. P360,000
B. P320,000
C. P275,000
D. P250,000
Answer: C. P275,000
Using the accrual basis of accounting, compute Lance's gross income subject to income tax in 2016
A. P360,000
B. P320,000
C. P275,000
D. P250,000
Answer: A. P360,000