Brite Company provided the following information on December 31, 200A:

Accounts payable 550,000

Note payable, 8% unsecured, due July 1, 200B 4,000,000
Accrued expenses 350,000
Contingent liability 450,000
Deferred tax liability 250,000
Bonds payable, 7%, due March 31, 200B 5,000,000
Premium on bonds payable 500,000

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 200B 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 200B.

What total amount should be reported as current liabilities on December 31, 200A? = 10,400,000

Charice Company provided the following information on December 31,200A:

•Accounts payable amounted to P500,000 and accrued expenses totaled P300,000 on December
31, 200A.

•On December 15, 200A, the entity declared a cash dividend of P7 per share on 100,000
outstanding shares, payable on January 15, 200B.
•On July 1, 200A, the entity issued P5,000,000, 8% bonds for P4,400,000 to yield 10%. The
bonds mature on June 30, 200F, and pay interest annually every June 30.
•The pretax financial income was P8,500,000 and taxable income was P6,000,000. The
difference is due to P1,000,000 permanent difference and P1,500,000 of taxable temporary
difference to reverse in 200B.

The income tax rate is 30%. The entity made estimated income tax payments during the year of
P1,000,000.

What amount should be reported as total current liabilities on December 31, 200A? = 2,500,000
A range of outcomes that suggest that a future event is likely to occur. = Probable

The following are examples of current assets, except = Deferred tax liability

A financial asset is classified as held for trading under the following circumstances, except = All
circumstances will classify a financial asset as held for trading.

Property, plant and equipment are tangible assets which are held by an entity for the following
purposes, except = For capital appreciation

It is the time between the acquisition of assets for processing and their realization in cash or cash
equivalents. = Operating cycle

Estimated liabilities are = Obligations which exist at the end of reporting period although
their amount is not definite.

The following are identifiable intangible assets, except = Goodwill