PROBLEM 1

The accounts below were taken from the unadjusted trial balance of C. Aquino Company at December 31,
2021:
Cash 124,000
Trading securities (cost) 87,000
Trade notes receivable 92,000
Accounts receivable 122,000
Allowance for uncollectible accounts 6,000
Trade notes payable 154,000
Accounts payable 75,000
Merchandise inventory 136,000
Bonds payable 250,000
Share dividends distributable 15,000
Income tax payable 28,000
An analysis of the above accounts disclosed the following:
a. Bank overdraft of P13,000 was deducted from cash balance.
b. Trade accounts receivable was net of customer’s deposit of P7,000.
c. Merchandise purchased on account worth P15,000 received December 30, 2021 was included in
the inventory but was not recorded as a purchase.
d. Accounts payable was net of suppliers’ debit balance of P12,000.
e. A bank loan of P30,000 due December 31, 2024 was included in the trade notes payable balance.
f. Bonds payable that was issued in 2021 will mature in five equal annual instalments beginning June
1, 2022.
g. The fair value of the equity investments at December 31, 2021 was P90,000.

Determine the following on December 31, 2021:

 Total current assets
Cash ₱124,000
Trading securities (at fair value) (change from cost to FV cause of G) ₱90,000
Trade notes receivable ₱92,000
Accounts receivable ₱122,000
Allowance for uncollectible accounts ₱ (6,000)
Merchandise Inventory ( 136,000+15,000) ₱151,000
TOTAL CURRENT ASSET ₱573,00

 Total current liabilities

Trade Notes Payable ₱124,000
e. Bank Loan Due on 2024 (₱ 30,000)
Accounts Payable ₱91,000
a. Bank Overdraft ₱ (13,000)
c. Merchandise Inventory ₱ 15,000
b. Advances from Customer 7,000
Share Dividends Distributable ₱15,000
Income Tax Payable ₱28,000
Portion of Bonds Payable due within a year: (P250,000/5) ₱50,000
TOTAL CURRENT LIABILITIES ₱287,000

 Total non-current assets

NONE = 0 (NOT EXPLICITLY STATED)
PROBLEM 2
The following totals are taken from the December 31, 2021 balance sheet and income
statement of Marcos Company: Current Assets—P4,500,000; Noncurrent Assets—P10,000,000; Current
liabilities—P2,000,000; Noncurrent liabilities—P3,700,000; Revenues—P5,500,000; Costs and Expenses
—P4,000,000.
Additional information:
• Accounts payable amounting to P540,000 was net of P122,000 suppliers’ debit balance
• Cash in bank amounting to P600,000 was net of P50,000 bank overdraft
• Accounts receivable amounting to P800,000 was net of P145,000 customers’ credit balance
• Checks totaling P100,000 payable to suppliers were written and recorded on December 29, 2021 but
were mailed on January 10, 2022.
Compute the following:
 Total current assets
Current Assets (Unadjusted) ₱4,500,000
Cash on Bank for Bank Overdraft ₱ (50,000)
Accounts Receivable ₱145,000
Checks unreleased ₱100,000
Total Adjusted Current Assets ₱4,695,000

 Total current liabilities

Current Liability (Unadjusted) ₱2,000,000
Accounts Payable ₱122,000
Checks Unreleased ₱100,000
Bank Overdraft ₱50,000
Total Adjusted Current Liability ₱2,272,000