Problem 1

Darwin Company provided the following information at year-end:

Cash 1,500,000
Accounts receivable 1,200,000
Inventory, including inventory expected in the ordinary
Course of operation 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

What amount should be reported as total current assets at year-

end? 1,500,000
1,200,000
ANSWER: 1,000,000
Cash 300,000
Accounts Receivable 0
Inventory
Financial asset held for trading

TOTAL CURRENT ASSETS

Problem 2

Petite company reported the following current assets at year-end:

Cash 5,000,000
Account 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 a deposit of P50,000 made
On inventory to be delivered in 18 months 150,000
Total current assets 8,950,000

Cash in general checking account 3,500,000

Cash fund to retire 5-year bonds payable 1,000,000
Cash held to pay value added taxes 500,000
Total cash 5,000,000
What total amount of current assets should be 4,000,000 reported at year-end?
2,000,000
ANSWER: 600,000
Cash 300,000
Accounts Receivable 100,000
Inventory
0
Financial asset held for trading

Prepaid Expense
TOTAL CURRENT ASSETS