Classroom Exercises 1 - Statement of Financial Position and Comprehensive Income

TRUE OR FALSE.

Classroom Exercise 1-1. (10 pts.)

1. Financial statements that are prepared in accordance to the standards issued by the IASB is
presumed to have fair representation.
2. A set of financial statement is complete if it has the Statement of Financial Position, Statement
of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flow.
3. All financial statements are applying the accrual accounting principle.
4. The primary users of the financial statements are management of the company and the
shareholders.
5. Comparing the company’s current financial information with the previous years is an example of
intra-comparability.
6. Financial statements represent both past and future financial information.
7. When assets are realized within normal operating cycle but more than 12 months after the
reporting period, it is considered as current assets.
8. According to IAS 1, non-current asset/liabilities may be presented before current
assets/liabilities.
9. Current and non-current portion of assets and liabilities shows the assumption of going concern
principle.
10. Service type of business may also use Multi-Step format of the income statement.

PROBLEM SOLVING

Classroom Exercise 1-2.

At the beginning of the year, the company have assets worth P700,000 while liabilities is 25% of its
equity. There was a decrease in liabilities worth P49,500 and a net increase of P152,780 for the equity.

1. How much is the equity at the beginning of the year? (2 pts.)

2. How much are the assets at the end of the year? (2 pts.)
3. How much was the change in asset? Indicate if it is a decrease or an increase. (2 pts.)

Classroom Exercise 1-3.

A company incurred a net loss of P49,000 for the current period. Assume that expenses are worth
P693,160.

4. How much was the revenue for the year? (2 pts)

Classroom Exercise 1-4.

The following are the accounts of Vela Merchandising for December 31, 2019:

Sales Php 3,000,000

Salaries Expense 80,000
Supplies Expense 120,000
Depreciation Expense 96,000
Utilities Expense 64,000
Insurance Expense 32,000
Rent Expense 144,000
Beginning Inventory 6,250
Purchases 187,500
Ending Inventory 12,500
Sales Discount 625

Accordingly, 25% of rent, depreciation and utility expenses pertain to the sales office while the rest
pertains to the corporate office.

5. How much is the net sales? (2 pts)

6. How much is the cost of goods sold? (2 pts)
7. How much is the gross profit for the year? (2 pts)
8. How much is general and administrative expenses? (2 pts)
 Classroom Exercises 1 - Statement of Financial Position and Comprehensive Income

9. How much is the selling and distribution expenses? (2 pts)

10. How much is the net income? (2 pts)

Classroom Exercise 1-5.

Below are the accounts of Celestina Trading for the year ended December 31, 2019.

Accounts Payable 2,000,400

Accounts Receivables 2,000,000
Accumulated Amortization – Patents 100,000
Accumulated Amortization – Trademarks 100,000
Accumulated Depreciation - Fixtures 100,000
Accumulated Depreciation - Vehicles 200,000
Advances to Employees 23,000
Allowance for doubtful accounts 145,000
Cash Equivalents 100,000
Cash in Banco de Plata 8,000,000
Cash in Metro Pacific Bank 2,000,000
Celestina, Capital ?
Change Cash Fund 25,000
Due to suppliers 45,000
Finished Goods 1,000,000
Fixtures 1,000,000
Income Tax Payable 590,000
Interest Payable 145,000
Land 1,000,000
Land Held for fair value appreciation 8,900,000
Long-term Debt 2,300,000
Notes Payable (short-term) 890,000
Notes Receivables 200,000
Patents 1,000,000
Petty Cash Fund 50,000
Prepaid Expenses 14,500
Raw Materials 600,000
Trademarks 1,000,000
Vehicles 2,000,000
Work in Progress 400,000

11. How much is the total cash and cash equivalent? (2 pts)
12. How much is the total inventories? (2 pts.)
13. How much is the total property, plant and equipment? (2 pts.)
14. How much is the total intangible assets? (2 pts.)
15. How much is the total current assets? (2 pts).
16. How much is the total non-current assets? (2 pts)
17. How much is the total current liabilities? (2 pts)
18. How much is the total non-current liabilities? (2 pts)
19. How much is the total assets? (2 pts)
20. How much is the total equity? (2 pts)