INTERMEDIATE ACCOUNTING 3

PROBLEM NO. 1

The summarized general ledger trial balance of Dapitan Corp., an investment company, includes the
following accounts at December 31, 2022:

Accounts Debit Credit

Cash P7,000 -
Deposits, at call 112,869 -
Dividends receivable 15,693 -
Interest Receivable 478 -
Outstanding settlements receivable 4,900 -
Trading Securities 68,455 -
Listed securities (Available for Sale) 1,880,472 -
Deferred Tax 655 -
Outstanding settlements payable - P10,253
Interest payable - 280
Other payables - 83
Current tax payable - 242
Provision for employee benefits - 752
Deferred tax - 56,414
Share Capital - 1,368,024
Revaluation reserve - Investments - 376,090
Retained earnings - 278,384
TOTAL P2,090,522 P2,090,522

Note: Provision for employee benefits includes P525 payable within one year

Questions:

Based on the above information, calculate the amount that should appear on Dapitan’s statement of
financial position at December 31, 2022 for the following:

1. Current Assets
2. Noncurrent Assets
3. Current Liabilities
4. Noncurrent Liabilities

PROBLEM NO. 2

In connection with your audit of the Pagadian Co. for the year 2022, you were able to gather the
following accounts are from the unadjusted trial balance of the company on December 31, 2022.

Accounts Amount
Cash Php 170,000
Accounts Receivable 525,000
Allowance for Bad Debts 4,000
Notes Receivable 180,000
Prepaid Rent Expenses 10,000
Trading Securities 150,000
Merchandise Inventory 450,000
Accounts Payable 242,500
Note Payable 100,000
Accrued Expenses 22,000
Bonds Payable (due semi-annually in June and December at P30,000) 300,000
Income Tax Payable 30,000
SSS and HDMF Premiums Payable 12,000
Withholding Tax Payable 9,000
Mortgage Payable, due July 31, 2024 200,000
Contingent Liability 80,000
INTERMEDIATE ACCOUNTING 3

Additional Information:

Cash consists of:

Cash in bank per bank statement (outstanding checks, Php12,000) Php167,000

Petty cash, (including unreplenished petty cash expense vouchers 150) 500
Customer’s advance deposit in check dated January 15, 2022 2,500
Php170,000

 Accounts receivable includes Php 125,000 selling price of goods sent on consignment at 125% of
cost and not included in the inventory.
 Notes receivable include notes discounted pf Php80,000
 Accounts payable includes Php40,000 cost of purchases in transit FOB destination but not included
in the inventory. It is also includes customer’s advance deposit in check dated January 15,2023 of
Php 2,500.
 The note payable is a promissory note dated October 1, 2022 due March 31, 2023 with 18% interest
p.a. This is in connection with a loan from a Chubby Bank. Accrued expenses exclude the interest
payable on the note.

Questions:

Based on the above and the result of your audit, determine the amounts to be presented in Pagadian’s
statement of financial position as of December 31, 2022 for the following:

1. Cash
2. Trade and other receivables
3. Total current assets
4. Trade and other payables
5. Total current liabilities

PROBLEM NO. 3

The bookkeeper for Maguindanao Computers Inc. reports the following statement of financial position
amounts as of 30 June 2022.

Current Assets Php 2,440,500

Non-Current Assets 6,285,500
Current Liabilities 1,386,000
Non-Current Liabilities 900,000
Owner’s Equity 6,440,000

A review of account balances reveals the following data.

a. An analysis of current assets discloses the following:

Cash Php 422,500

Investment securities – trading 600,000
Trade accounts receivable 568,000
Inventories, including advertising supplies 850,000
Of Php20,000
Total Php 2,440,500

b. Non-Current assets include the following:

Property, Plant and Equipment: Depreciated Php 5,490,000

book value (cost P6,560,000)
Deposit with a supplier for merchandise 21,500
ordered for August delivery
Goodwill recorded on the books to cancel 774,000
losses incurred by the company in prior years
Total Php 6,285,500
INTERMEDIATE ACCOUNTING 3

c. Current liabilities include the following:

Payroll payable Php 71,500

Taxes payable 41,500
Rent payable 114,000
Trade accounts payable (net of Php15,000, 6 999,000
mons. Note, received from a supplier who
purchased some used equipment on June
29,2022
Notes payable 160,000
Total Php 1,386,000

d. Non-current liabilities include the following:

9% mortgage on the Property, Plant and Equipment payable in

Semi-annual installment of Php90,000
Through to June 30,2027 Php900,000

e. Owner’s equity includes the following:

Preference share capital: 190,000 shares Php 3,800,000

outstanding (P20 par value)
Ordinary share capital: 1,600,000 shares at P1 1,600,000
par value
Share premium 1,040,000
Total Php 6,440,000

f. Ordinary shares were originally issued for Php3,910,000 but the losses of the company for the
past years were charged against share premium.

Questions:

Based on the above and the result of the audit, determine the adjusted amounts of the following:

1. Current Assets
2. Non-Current Assets
3. Current Liabilities
4. Non-Current Liabilities
5. Equity

PROBLEM NO. 4

The following statement of financial position is submitted to you for the inspection and review.

Surigao Corporation
Statement of Financial Position
December 31, 2022

Assets
Cash Php 180,200
Accounts Receivable 450,000
Inventories 816,000
Prepaid Insurance 35,200
Property, Plant and Equipment 1,507,200
Total Assets Php 2,988,600
INTERMEDIATE ACCOUNTING 3

Liabilities and Equity

Miscellaneous liabilities Php 14,400
Loan Payable 304,800
Accounts Payable 301,000
Share Capital 536,000
Paid in Capital 1,832,400
Total Liabilities and Equity Php 2,988,600

During the review, you find the following data:

a. The possibility of uncollectible accounts on accounts receivable has not been considered. It is
estimated that uncollectible accounts will total Php19,200.
b. The amount of Php180,000 representing the cost of large-scale news paper advertising campaign
completed in 2022 has been added to the inventory because it is believed that this campaign will
benefit sales of 2023. It is also found that inventories include merchandise of Php65,000 received
on December 31 and has not been recorded as a purchase.
c. The books show the property, plant and equipment have a cost of Php2,227,200 with accumulated
depreciation of Php720,000. However, these balances include fully depreciated equipment of
Php340,000 that has been scrapped and is no longer on hand.
d. Miscellaneous liabilities of Php14,400 represent salaries payable of Php38,000, less non-current
advances of Php23,600 made to the company officials.
e. Loan payable represents a loan from the bank that is payable in regular quarterly installments of
Php25,000.
f. Income tax payable not shown is estimated at Php73,000.
g. Deferred tax liability arising from temporary differences totals Php178,200. This liability was not
included in the statement of financial position.
h. Share capital consists of 6%, par Php20, 25,000 preference shares and 36,000 ordinary shares, par
value P1.
i. Share capital have been issued for a total consideration pf Php1,134,400; the amount received in
excess of the par values of the shares has been reported as Paid in Capital. Profit and dividends
were recorded in Paid in capital.
Questions:
Based on the above and the result of the audit, determine the adjusted amounts of the following:
1. Current Assets
2. Non-Current Assets
3. Total Assets
4. Current Liabilities
5. Non-Current Liabilities
6. Total Liabilities
7. Equity