URDANETA CITY UNIVERSITY

San Vicente West, Urdaneta City Pangasinan

College of Business Management and Accountancy

FIRST SEMESTER - A.Y. 2021-2022

PQ3

Problem 1
The trial balance of Evening Co. as of December 31, 20x1 is shown below:
Debits Credits
Cash on Hand 120,000
Cash in Bank 980,000
Accounts Receivable 2,000,000
Allowance for Doubtful Accounts 300,000
Advances to Employees 40,000
Advances to Officers (due in 20x3) 130,000
Advances to Affiliates (no agreed due date) 670,000
Inventories 200,000
Dairy Cattle (used to produce milk) 1,200,000
Advances to Suppliers 30,000
Fair Value of Plan Assets 1,000,000
Land (held for long term capital appreciation) 900,000
Land (office building site) 1,200,000
Building 4,800,000
Accumulated Depreciation - Building 1,600,000
Patent 440,000
Accumulated Amortization - Patent 80,000
Web Site Costs 250,000
Accumulated Amortization Web Site 50,000
Accounts Payable 720,000
Utilities Payable 80,000
Loans Payable (short-term bank loan) 2,500,000
Discount on Notes Payable 740,000
Provision for Probable Loss on Lawsuit 430,000
Deposit Liability for Returnable Containers (short-term) 120,000
Present value of defined benefit obligation 2,700,000
Ordinary Share Capital 4,000,000
Share Premium 600,000
Share Premium Share warrants Outstanding 300,000
Share Premium Treasury Shares 70,000
Retained Earnings 1,030,000
Reserves for Contingencies 190,000
Translation Gain on Foreign Operation 30,000
Treasury Shares 100,000
Totals 14,800,000 14,800,000
Required:

1. Prepare the Statement of Financial Position of Evening Co. Make a proper

heading for the financial statement. Observe compliance with the general feature of

2. Prepare notes showing the breakdown of line items in the financial

statement.