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Chapter 3 Sol 2012 PDF
Chapter 3 Sol 2012 PDF
CHAPTER 3
THE BALANCE SHEET AND NOTES TO THE FINANCIAL STATEMENTS
Assets
Current assets: Note
Cash and cash equivalents P 35,000
Trading securities 61,000
Trade receivables (1) 110,000
Inventory 322,000 P 525,000
Noncurrent assets:
Property, plant and equipment (2) P1,483,000
Investment Property 1,000,000
Investments in associates 250,000
Intangibles (3) 141,000 2,874,000
TOTAL ASSETS P3,399,000
Note 3 – Intangibles
Patents, net of accumulated amortization of P22,000 P 98,000
Trademarks, net of accumulated amortization of P17,000 43,000
Total P141,000
Note 7 – Reserves
Paid-in capital in excess of par-preference P 81,000
Paid-in capital in excess of par-ordinary 240,000
Appropriated retained earnings 45,000
Total P366,000
Land Held for Future Use, which conventionally was classified as long-term investment, is
not qualified to be reported as Investment Property under par. 9 of PAS 40. Thus,
property held for future development and subsequent use as owner-occupied property is
part of property, plant and equipment.
Intermediate Accounting Volume III 2012 edition Suggested Answers
Note 9 – Reserves
Paid-in capital in excess of par-preferred P234,000
Paid-in capital in excess of par-common 303,000
Total P537,000
Assets
Current liabilities:
Trade and other payables (4) P1,390,000
Unearned rent 90,000 P1,480,1200
Noncurrent liabilities:
Bonds payable (5) 1,000,000
Shareholders’ equity:
Ordinary Share Capital, P10 par P1,200,000
Share Premium 1,040,000
Retained earnings 2,420,000
Total P4,660,000
Less Treasury shares, at cost 330,000 4,330,000
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY P6,810,000
Assets
Current assets: Note
Cash P 380,000
Current marketable securities 460,000
Trade receivables (1) 2,780,000
Inventories 3,050,000
Prepaid insurance 290,000 P 6,960,000
Noncurrent assets:
Property, plant and equipment (2) P 7,100,000
Other financial assets (3) 1,600,000
Intangibles (4) 960,000 9,660,000
TOTAL ASSETS P16,620,000
Note 4 – Intangibles
Patents P820,000
Less accumulated amortization 230,000 P 590,000
Trademarks P520,000
Less accumulated amortization 150,000 370,000
Total P960,000
Note 5 – Trade and other payables
Accounts payable P1,940,000
Wages payable 410,000
Current portion of mortgage payable 400,000
Total P2,750,000
Note 6 – Bonds payable
Bonds payable P4,000,000
Add premium on bonds payable 430,000
Total P4,430,000
Note – Share capital
Preference share P600,000
Ordinary share 1,100,000
Total P1,700,000
Note: The entire amount of Mortgage notes payable is classified as current liabilities because as
of December 31, 2012, the company has no discretion yet to refinance the obligation on a long-
term basis. The refinancing of the mortgage payable in 2011 is non-adjusting event that requires
disclosure in the notes to the financial statements.