Presented below is the statement of Financial Position of Love Corporation as of December 31, 2019.

Love corporation
Statement of Financial Position
December 31, 2019

Assets
investment in available for sale securities(at cost note 4)
investment in trading securities(at cost note 4)
Goodwill(note2)
Building (note10
Inventories
Land
Accounts receivable
Treasusry shares(50,000 shs. No par)
Cash on hand
Assets allocated to trustee for plant expansion:
Cash in bank
BSP Treasusry Notes, at cost and fair value
Total

Liabilities and Equities

Notes pyayble (note 3)
Oridnary shares, authorized and issued,1M shares no par
Retained Earnings
Revaluaiton surplus (note 1)
income tax payable
Reserve for depreciation of building
Total

Note 1: the company opted to record th buildings at appraised value. The excess of appraisal value over cost was P570,000

Note 2: goodwill in the amount of P120,000 was recognized because the company believed that book value was not
an accurate representation of the fair value of the company. The gain of P120,000was credited to Retained Earnings

Note 3: Notes payable are long term except for the current installment due of P100,000

Note 4: Fair value as of December 31, 2019:

Available for sale securities P90,000
Trading securities 55,000

Instructions:
Prepare a corrected classified statement of financial Position in good form. The notes above are for information only.
Exercise 2
The ff. balances were taken from the books of Makulay Corp. on December 31, 2019

Interest revenue
Cash
Sales
Accounts receivable
Prepaid insurance
sales returns and allowances
Allowance for doubtfull accounts
sales discounts
Land
Equipment
Building
Cost of goods sold
Accumulated depreciation-equipment
accumulated depreciation-building
Notes receivable
Selling expenses
accounts payable
Bonds payable
Administrative and general expenses
Accrued liabilities
Interest expepnse
Notes payable
Loss on earthquake damage
Oridnary sahares
Retained earnings

Assume : total effective tax rate of 30%

Instructions: Prepare a multi-step statement of Comprehensive income; 100,000 ordinary shares were outstanding during the
ember 31, 2019.

P100,000 100,000
50,000 50,000
120,000 120,000
1,640,000 1,640,000
312,100 312,100
750,000 750,000
170,000 170,000
87,000 87,000
175,900 175,900

70,000 70,000
138,000 138,000
3,613,000 3,613,000

600,000
1,300,000
658,000
570,000
75,000
410,000
3,613,000 3,613,000

appraisal value over cost was P570,000

believed that book value was not

20,000was credited to Retained Earnings

notes above are for information only.

 86,000
51,000
1,380,000
150,000
20,000
150,000
7,000
45,000
100,000
200,000
140,000
621,000
40,000
28,000
155,000
194,000
170,000
100,000
97,000
32,000
60,000
100,000
150,000
500,000
21,000

dinary shares were outstanding during the year