Beruflich Dokumente
Kultur Dokumente
Cash P 1,500,000
Accounts receivable 1,200,000
Inventory, including inventory expected in the ordinary
course of operations to be sold beyond 12 months
amounting to P700,000 1,000,000
Financial asset held for trading 300,000
Equity investment at fair value through other
comprehensive income 800,000
Equipment held for sale 2,000,000
Deferred tax asset 150,000
2. Petite Company reported the following current assets on December 31, 2018:
Cash P5,000,000
Accounts receivable 2,000,000
Inventory, including goods received on
consignment P200,000 800,000
Bond investment at fair value through other
comprehensive income 1,000,000
Prepaid expenses, including deposit of P50,000 made on
inventory to be delivered in 18 months 150,000
Total current assets P8,950,000
What total amount of current assets should be reported on December 31, 2018?
a. 6,750,000
b. 6,700,000
c. 7,700,000
d. 7,750,000
3. Rice Company was incorporated on January 1, 2018 with P5,000,000 from the issuance of
share capital and borrowed funds of P1,500,000. During the first year, net income was
P2,500,000.
On December 15, the entity paid a P500,000 cash dividend. On December 31, 2018, the
liabilities had increased to P1,800,000.
a. 6,500,000
b. 9,300,000
c. 8,800,000
d. 6,800,000
4. Mirr Company was incorporated on January 1, 2018 with proceeds from the issuance of
P7,500,000 in share capital and borrowed funds of P1,100,000.
During the first year, revenue from sales and consulting amounted to P8,200,000, and
operating costs and expenses totaled P6,400,000.
On December 15, 2018, the entity declared a P300,000 cash dividend, payable to
shareholders on January 15, 2019. The liabilities increased to P2,000,000 by December 31,
2018.
a. 11,000,000
b. 11,300,000
c. 10,100,000
d. 12,100,000
Cash P4,500,000
Accounts receivable 7,900,000
Notes receivable, net of discounted note P500,000 2,900,000
Inventory 4,000,000
Deferred charges 1,000,000
P19,400,000
Cash P 3,200,000
Accounts receivable 3,000,000
Inventory 2,800,000
Prepaid insurance 200,000
Total current assets P 9,200,000
a. 7,700,000
b. 7,450,000
c. 7,400,000
d. 7,500,000
8. Gar Company reported the following liability account balances on December 31, 2018:
On December 31, 2018, what total amount should be reported as current liabilities?
a. 7,100,000
b. 6,700,000
c. 6,500,000
d. 6,900,000
The contingent liability is an accrual for possible loss on a P1,000,000 lawsuit filed against
the entity.
The legal counsel expects the suit to be settled in 2019 and has estimated that the entity will
be liable for damages in the range of P450,000 to P750,000.
The deferred tax liability is not related to an asset for financial reporting and is expected to
reverse in 2019.
What total amount should be reported as current liabilities on December 31, 2018?
a. 10,350,000
b. 10,150,000
c. 9,900,000
d. 4,900,000
Under the loan agreement for the 10% note payable, the entity has the discretion to
refinance the obligation for at least twelve months after December 31,2018.
On March 1, 2019, the entire P4,000,000 balance of the 12% not payable was refinanced
through issuance of long-term obligation payable lump-sum.
What amount of notes payable should be classified as current on December 31, 2018?
a. 6,000,000
b. 4,000,000
c. 2,000,000
d. 0
12. Willem Company reported the following liabilities on December 31, 2018:
The P1,000,000 bank loan was refinanced with a 5-year loan on December 31, 2018. The
financial statements were issued march 1, 2019.
What total amount should be reported as current liabilities on December 31, 2018?
a. 7,500,000
b. 5,000,000
c. 8,500,000
d. 4,000,000
13. Ronna Commpany provided the following information on December 31, 2018:
The financial statements for 2018 were issued on March 31, 2019.
On December 31, 2018, the 6% note payable was refinanced on a long-term basis.
Under the long-term agreement for the 8% note payable, the entity has the discretion to
refinance the obligation for at least twelve months after December 31, 2018.
14. Manchester Company provided the following information on December 31, 2018:
What amount should be reported as total current liabilities on December 31, 2018?
a. 8,100,000
b. 7,950,000
c. 9,100,000
d. 7,350,000
15. Charice Company provided the following information on December 31, 2018:
What amount should be reported as total current liabilities on December 31, 2018?
a. 3,500,000
b. 2,700,000
c. 2,300,000
d. 2,500,000
16. United Company provided the following current assets and shareholders’ equity at year-end:
Cash P 600,000
Financial assets at fair value through profit or loss,
including cost of P300,000 of United Company shares 1,000,000
Accounts receivable 3,500,000
Inventory 1,500,000
Total current assets P6,600,000
19. Mont Company reported net assets totaling P8,750,000 at year-end which included the
following:
The only liabilities not listed are a P3,000,000 note payable due in two years and related
accrued interest of P100,000 due in four months.
21. Kenya Company provided the following information on December 31, 2018:
1. What amount should be reported as total current assets on December 31, 2018?
a. 19,040,000
b. 20,040,000
c. 20,050,000
d. 24,040,000
2. What amount should be reported as total current liabilities on December 31, 2018?
a. 19,000,000
b. 16,000,000
c. 15,500,000
d. 15,000,000
22. Gold Company provided the following trial balance on December 31, 2018:
Checks amounting to P300,000 were written to vendors and recorded on December 29,
2018 resulting in a cash overdraft of P100,000. The checks were mailed on January 15, 2019.
Land held for sale was sold for cash on January 31, 2019.
23. Trey Company provided the following trial balance at year-end which had been adjusted
except for income tax expense:
Cash P 600,000
Accounts receivable 1,650,000
Prepaid taxes 300,000
Accounts payable P 140,000
Share capital 500,000
Share premium 680,000
Retained earnings 630,000
Foreign currency translation adjustment 400,000
Revenue 3,600,000
Expenses 2,600,000 _________
P5,550,000 P5,550,000
During the current year, estimated tax payments of P300,000 were charged to prepaid taxes.
The entity has not yet recorded income tax expense.
There were no differences between financial and taxable income. The tax rate is 30%.
Included in accounts receivable is P500,000 due from the customer. Special terms granted to
this customer require payment in equal semiannual installments of P125,000 every April 1
and October 1.
24. Mint Company provided the following account balances at year-end which had been
adjusted except for income tax expense:
Cash P 600,000
Accounts receivable 3,500,000
Cost in excess of billings on long-term contracts 1,600,000
Billings in excess of cost on long-term contracts 700,000
Prepaid taxes 450,000
Property, plant and equipment at carrying amount 1,510,000
Note payable – noncurrent 1,620,000
Share capital 750,000
Share premium 2,030,000
Retained earnings unappropriated 900,000
Retained earnings restricted for note payable 160,000
Earnings from long-term contracts 6,680,000
Costs and expenses 5,180,000
25. Shaw Company provided the following trial balance on December 31, 2018 which had been
adjusted except for income tax expense:
Cash P 600,000
Accounts receivable 2,800,000
Inventory 2,000,000
Property, plant and equipment (net) 10,500,000
Accounts payable and accrued liabilities P 1,800,000
Income tax payable 1,500,000
Deferred tax liability 700,000
Share capital 2,500,000
Share premium 3,000,000
Retained earnings, January 1 3,500,000
Net sales and other revenue 15,000,000
Costs and expenses 10,000,000
Income tax expense 2,100,000 __________
P28,000,000 P28,000,000
The accounts receivable included P1,000,000 due from a customer and payable in quarterly
installments of P125,000. The last payment is due December 30, 2020.
During the year, estimated tax payment of P600,000 was charged to income tax expense.
The income tax rate is 30%.
26. Cara Company provided the following information for the current year:
January 1 December 31
Current assets 700,000 ?
Property, plant and equipment 3,000,000 4,000,000
Current liabilities ? 300,000
Noncurrent liabilities 1,000,000 ?
Working capital of P600,000 remained unchanged. Net income for the current year was
P400,000. No dividends were declared during the year and there were no other changes in
shareholders’ equity.
27. Goodrich Company provided the following information on December 31, 2018:
The P3,000,000, 10% note was issued March 1, 2018, payable on demand. Interest is
payable every six months.
The one-year P5,000,000, 11% note was issued January 15, 2018. On December 31,
2018, the entity negotiated a written agreement with the bank to replace the note with
a 2-year, P5,000,000, 10% note to be issued January 15, 2019.
The 10% mortgage note was issued October 1, 2015, with a term of 10 years. Terms of
the note give the holder the right to demand immediate payment within 10 days from
the date the payment is due. On December 31, 2018, the entity is three months behind
in making the required interest payment.
The bonds payable are ten-year, 8% bonds, issued June 30, 2009. Interest is payable
semiannually on June 30 and December 31.
28. Aroma Company provided the following information on December 31, 2018:
Cash P 300,000
Accounts receivable 800,000
Inventory 1,650,000
Prepaid expenses 250,000
Property, plant and equipment 8,800,000
Accumulated depreciation 800,000
Accounts payable 1,250,000
Accrued expenses 250,000
Bonds payable 4,000,000
Share capital 5,000,000
Retained earnings 500,000
A P500,000 note payable to bank, due on June 30, 2019, was deducted from the balance on
deposit in the same bank.
The entity recorded checks of P200,000 in payment of accounts payable on December 31,
2018. These checks were still on hand on January 20, 2019.
An advance payment of P100,000 from a customer for goods to be delivered in 2018 was
deducted from accounts receivable.
1. What total amount should be reported as current assets on December 31, 2018?
a. 3,800,000
b. 3,600,000
c. 3,700,000
d. 3,900,000
2. What total amount should be reported as current liabilities on December 31, 2018?
a. 2,100,000
b. 2,300,000
c. 1,900,000
d. 2,200,000
29. Daet Company provided the following account balances and related information at year-
end:
Cash P3,700,000
Accounts receivable 1,500,000
Allowance for doubtful accounts 200,000
Inventory 2,000,000
Prepaid insurance 300,000
Total current assets P7,700,000
Analysis of cash
Cash in bank P1,300,000
Bank overdraft in another bank ( 300,000)
Cash set aside for plant addition 2,000,000
Petty cash fund 10,000
Cash withheld from wages 190,000
General cash 500,000
Total cash P3,700,000
The accounts receivable included past due accounts in the amount of P100,000. The account
is deemed uncollectible and should be written off.
The inventory included goods held on consignment amounting to P150,000 and goods of
P200,000 purchased and received at year-end. Neither of these items have been recorded as
purchase.
The prepaid insurance included cash surrender value of life insurance of P50,000.
Cash P2,000,000
Accounts receivable 3,000,000
Inventory 1,900,000
Prepaid expenses 100,000
Accounts payable 2,500,000
Interest payable 150,000
Income tax payable 300,000
Money claim of the union pending final decision 500,000
Mortgage payable, due in four annual installments 2,000,000
Analysis of cash
Cash in bank P1,650,000
Customer check market NSF 100,000
Employee IOU 50,000
Deposit with court for case under litigation 200,000
Total cash P2,000,000
1. A 16. A
2. B 17. A
3. C 18. A
4. A 19. A
5. A 20. (1) B, (2) C, (3) A
6. C 21. (1) D, (2) A
7. D 22. (1) A, (2) A, (3) A
8. C 23. (1) A, (2) C
9. C 24. (1) B, (2) A, (3) C, (4) C
10. A 25. (1) D, (2) A, (3) C
11. B 26. (1) A, (2) A, (3) C
12. A 27. (1) A, (2) C
13. (1) B, (2) C 28. (1) A, (2) B
14. A 29. (1) A, (2) B, (3) C, (4) A
15. D 30. (1) B, (2) A