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Problem 1-4 (AICPA Adapted) ted)
Problem 1-6 (AICPA Adap
following current assets on December
Rice Company was incorporated on January 1, 2016 with Arabian Company reported the
P5,000,000 from the issuance of share capital and borrowed funds 31, 2016:
of P1,500,000. During the first year, net income was P2,500,000.
Cash 4,500,000
On December 15, the entity id a P500,000 cash div%lend. On 7,500,000
Accounts receivable
December 31, 2016, the lia bi lities had increased to P1 8 0,000. counted note P500,000 2,000,000
Notes receivable, net of dis
4,000,000
On December 31, 2016, what amount should be reported as total Inventory
assets? 18,000,000
a. 6,500,000
b. 9,300,000 nts receivable comprised the following:
An analysis disclosed that accou
c. 8,800,000
5,000,000
d. 6,800,000 'Trade accounts receivablecounts ( 500,000)
Allowance for doubtful ac
Solution 1-4 Answer c pany's unsold goods sent
Selling price of Arabian Com
ent at 150% of cost
Liabilities to Tar Company on consignm
1,800,000 and excluded from Arabian's e
nding inventory 3,000,000
Share capital 5,000,000
7,500,000
Retained earnings (P2,500,000 less dividend P500,000) 2,000,000
Total liabilities and shareholders' equity 8,800,000 ount should be reported as total
On December 31, 2016, what am
Problem 1-5 (AICPA Adapted) current assets?
it. 17,000,000
Mirr Company was incorporated on January 1, 2016 with proceeds
from the issuance of P7,500,000 in share capital and borrowed b. 17,500,000
c. 15,000,000
funds of P1,100,000. During the first year, revenue from sales and d. 16,500,000
consulting amounted to P8,200,000, and operating costs and
expenses totaled P6,400,000. a
Solution 1-6 Answer
On December 15, 2016, the entity declared a P300,000 dividend, 4,500,000
payable to shareholders on January 15, 2017. The liabilities increased Cash 5,000,000
to P2,000,000 by December 31, 2016. Accounts receivable nts ( 500,000)
Allowance for doubtful accou
On December 31, 2016, what amount should be reported as total assets? 2,000,000
Notes receivable
0,000) 6,000,000
a. 11,000,000 Inventory (4,000,000 + 2,00
b. 11,300,000 17,000,000
c. 10,100,000 Total current assets
d. 12,100,000
ods out on consignment is excluded
The selluig price of the unsold
ast of go
the goods should be included from
Solution 1-5 Answer a accounts receivable but ibe e in inventory.
Liabilities 00,000 divided by 150%
hTe cost of out on consignment is P3,0 or
Share capital 2,00000 P2,000,
Retained earnings (8,200,000 — 0,460,000 — 300,000) 7,500,000 perly netted against the total
A,500,000 The discounted note receivable is pro liotm
Total liabilities and shareholders' equity receivable.
11,000,000
Problem 1-11 (AICPA Adapted) Problem 1-12 (PHILCPA Adapted)
Brite Company provided the following information on December 31, liktrnia Company disclosed the following information:
2016:
Accounts payable 550,000 &mlts payable, after deducting debit balances
In suppliers' accounts amounting to P100,000 4,000,000
Unsecured note payable, 8%, due July 1, 2017 4,000,000
Accrued expenses 350,000 Auuntod expenses 1,500,000
Contingent liability 450,000 Credit balances of customers' accounts 500,000
Deferred tax liability 250,000 'flock dividend payable 1,000,000
Senior bonds payable, 7%, due March 31, 2017 5,000,000 ('I&tns for increase in wages and allowance by
employees of the entity, covered in a pending lawsuit 400,000
The contingent liability is an accrual for possible loss on a
I al minted expenses in redeeming prize coupons 600,000
P1,000,000 lawsuit filed against the entity.
The legal counsel expects the suit to be settled in 2017 and has What amount should be reported as total current liabilities?
estimated that the entity will be liable for damages in the range of 6,700,000
P450,000 to P750,000. h (.(00,000
7,100,000
The deferred tax liability is not related to an asset for financial
It 7,700,000
reporting and is expected to reverse in 2017.
What total amount should be reported as current liabilities? •f)luilon 1-12 Answer a
a. 10,350,000 Accounts payable (4,000,000 + 100,000) 4,100,000
b. 10,150,000 Accrued expenses 1,500,000
c. 9,900,000 'milt balances in customers' accounts 500,000
d. 4,900,000 1:41inialed I iabi I ity for coupons 600,000
'1(11111current liabilities 6,700,000
Solution 1-11 Answer c
Accounts payable 550,000 Mc debit balances in suppliers' accounts are not "netted" against
Unsecured note payable 4,000,000 accounts payable but should be reported as current asset.
Accrued expenses 350,000
Senior bonds payable 5,000,000 I lw stock dividend payable is not an accounting liability but presented us
The contingent liability is only disclosed because it is a possible I lie claims for increase in wages and allowance should be disclosed as
loss. contingent liability.
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I , What is the adjusted cash balance?
2,900,000
b. 2,500,000
CHAPTER c, 2,950,000
2 d. 3,200,000
it 1,950,000
STATEMENT OF FINANCIAL POSITION h, 2,000,000
Comprehensive problems t., 1,850,000
d, 1,800,000
Problem 2-1 (AICPA Adapted)
What is the adjusted inventory?
assets:On December 31, 2016, Ivan Company showed the following current
Cash a. 1,500,000
Accounts receivable 3,200,000 b. 2,000,000
Inventory c,
2,500,000 2,500,000
Prepaid expenses 2,000,000 d. 2,750,000
I00 000
Total current assets
7,800,000 •1 What total amount should be reported as current assets?
CCash on hand, including customer postdated checkP50,000 and employees IOUs P50ash it. 6,900,000
,000
in bank per bank statement (outstanding 500,000 h. 7,050,000
checks on December 31, 2016 P20 0,000)
c. 7,350,000
Total cash _ ,2 700 000 d. 7,400,000
3 200 000
Customers,' debit balances, net of customdereposit of P50,000
Allowance for doubtful accounts
Sale price of goods invoiced to customers at 150%of cost on December 29, 2016 but delivered onJanuary 5, 2017 and
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