Problem 1

Pagey Company was incorporated on January 1, 2019 with P500,000 from the issuance of share capital
and borrowed funds of P150,000. During the first year, net income was P2,500,000.

On December 31, 2019, what amount should be reported as total assets?

Problem 2

Sir Company was incorporated on January 1, 2019 with proceeds from the issuance of P750,000 in share
capital and borrowed funds of P110,000.

During the first year, revenue from sales and consulting amounted to P820,000, and operating costs and
expenses totaled P640,000

On December 15, 2019, the entity declared a P300,000 divided, payable to shareholders on January 15,
2020. The liabilities increased to P200,000 by December 31, 2019.

On December 31, 2019, what amount should be reported as total assets?

Problem 3

Huge Company reported the following current assets at year-end:

Cash P5,000
Accounts Receivable 2,000
Inventory, including goods received on consignment P200 800
Bond investment at fair value through other comprehensive income 1,000
Prepaid expenses, including a deposit of P50,000 made on inventory
to be delivered in 18 months 150
Total current assets 8,950

Cash in general checking account 3,500

Cash fund to retire 5-year bonds payable 1,000
Cash held to pay value added taxes 500
Total Cash 5,000

What total amount of current assets should be reported at year-end?

Problem 4

Charles Company provided the following information at year-end:

Cash P150,000
Account receivable 120,000
Inventory, including inventory expected in the ordinary
course of operations to be sold beyond 12 months amounting to P70,000 100,000
Financial asset held for trading 30,000
Equity investment at fair value through other comprehensive income 80,000
Equipment held for sale 200,000
Deferred tax asset 150,000

What amount should be reported as total current assets at year-end?

Problem 5

Western Company reported the following current assets at year-end:

Cash P3,500
Accounts Receivable 3,000
Inventory 2,800
Prepaid Insurance 200
Total current assets 9,500

The accounts receivable consisted of the following:

Customers’ accounts 1,400
Employees’ account collectible currently 200
Advances to subsidiary 500
Allowance for doubtful accounts (100)
Subscription receivable, not collected currently 1,000
Total Accounts Receivable 3,000

What amount should be reported as current assets at year-end?

Problem 6

HARHAR Company reported the following liability account balances on December 31, 2019:

Accounts Payable P1,900

Bonds Payable, due December 31, 2020 3,400
Discount on Bonds Payable 200
Deferred tax liability 400
Dividends payable 500
Income tax payable 900
Note payable, due January 31, 2021 600

On December 31, 2019, what amount should be reported as current liabilities?

Problem 7

AHAVA Company provided the following information on December 31, 2019:

Accounts Payable, net of creditors; debit balances of P200,000 P2,000,000

Accrued expenses 800,000
Bonds Payable due December 31, 2021 4,500,000
Premium on bonds payable 500,000
Deferred tax liability 500,000
Income tax payable 1,100,000
Cash dividend payable 600,000
Share dividend payable 400,000
Note payable-6% due March 1, 2020 1,500,000
Note payable-8% due October 1, 2020 1,000,000

The financial statement for 2019 were issued on March 31, 2020.

On December 31, 2019, the 6% note payable was refinanced on a long-term basis.

Under the loan agreement, the entity has the discretion to refinance the 8% note payable for at least
twelve months after December 31, 2019.

1. What amount should be reported as total current liabilities?

2. What amount should be reported as total non-current liabilities?

Problem 8

Benguet Company provided the following information at year-end:

Share Capital P15,000

Share Premium 5,000
Treasury shares, at cost 2,000
Actuarial loss on defined benefit plan 1,000
Retained earnings unappropriated 6,000
Retained earnings appropriated 3,000
Revaluation surplus 4,000
Cumulative translation adjustment-credit 1,500

What amount should be reported as total shareholder’s equity?