Problem D: D Company presents the following December 31, 2021 statement of financial position in condensed format.

Ba
financial position for D Company with accounts properly classified.

D Company Additional Information: The follow

Statement of Financial Position
For Year Ended December 31, 2021 a. Current assets include cash P 3
(maturity date, July 1, 2022), and l
will be recovered principally throug
Current Assets 4,430,000 has already been completed at Dec
Long-Term Investments 1,360,000 100,000 on this land.
Property and Equipment 12,350,000
Intangible Assets 770,000 Cash
Other Assets 1,360,000 Accounts Receivable
TOTAL ASSETS 20,270,000 Non-Trade Notes Receivable
Land (NCAHS)
Current Liabilities 6,660,000
Long-Term Liabilities 2,410,000
Contributed Capital 1,700,000 b. Long-term investments include a
Unrealized Capital 2,250,000 that are expected to be held until t
Retained Earnings 7,250,000 to hold the bonds until their matu
Both the equity securities and the
TOTAL EQUITIES 20,270,000 2021, the fair value of equity secu
although the fair value on Decembe

Financial Assets at FVPL

Debt Investments at Amortized Cos

c. Property and equipment include

enterprises, inventory costing P 45
were located. The land on which th
had a fair value of P 1,600,000 whi
investment property using the cost

Building (PPE)
Building (Investment Property)
Inventory
Equipment (PPE)
Land (PPE)
Land (Investment Property)

d. Intangible assets include patent

treasury shares that cost P 180,000

Patents
Accumulated Amortization - Patent
Treasury Shares

e. Other assets include prepaid in

retirement P 700,000, and tradema

Prepaid Insurance
Bond Sinking Fund
Trademarks
Accumulated Amortization - Tradem

f. Current liabilities include accoun

4,000,000, income taxes payable o
on June 30, 2022. The company, as
this note to June 30, 2023.

Accounts Payable
Bonds Payable
Income Taxes Payable
Notes Payable

g. Long-term liabilities include accru

payments of P 2,000,000 starting D

Accrued Wages
Mortgage Payable

h. Contributed capital includes ordi

Ordinary Share Capital

Preference Share Capital

i. Unrealized capital includes premi

Premium on Bonds Payable

Share Premium

j. Retained earnings includes unres

70,000, accumulated depreciation
accumulated depreciation on equip

Unappropriated Retained Earnings

Allowance for Uncollectible Accoun
Accumulated Depreciation - B (PPE)
Accumulated Depreciation - B (IP)
Accumulated Depreciation - E
Provision for Warranties
n in condensed format. Based on the information above, prepare a correct December 31, 2021 statement of

l Information: The following information is also available.

t assets include cash P 380,000, accounts receivable P 1,850,000, non-trade notes receivable P 1,000,000
date, July 1, 2022), and land P 1,200,000. This land is available for immediate sale and its carrying amount
covered principally through a sale transaction. The sale of this land is highly probable as the plan for its sale
dy been completed at December 31, 2021. Its fair value is P 1,500,000. The entity anticipates selling cost of P
n this land.

Current Asset (CA) 380,000

Receivable Current Asset (CA) 1,850,000
e Notes Receivable Current Asset (CA) 1,000,000
AHS) Current Asset (CA) 1,200,000

rm investments include a P 460,000 equity securities and a P 900,000 investment in Day Corporation bonds
xpected to be held until their December 31, 2024 maturity date. Emerald Company demonstrates the ability
he bonds until their maturity. The equity securities are intended for immediate trading in the near future.
equity securities and the investment in Day Corporation bonds are listed above at cost. On December 31,
fair value of equity securities was P 485,000. The Day Corporation bonds were purchased at face value,
the fair value on December 31, 2021 was P 906,000.

Assets at FVPL Current Asset (CA) 485,000

stments at Amortized Cost Non-Current Asset (NCA) 900,000

y and equipment include buildings costing P 6,340,000, of which P 2,000,000 is held for rental to commercial
es, inventory costing P 450,000, equipment costing P 2,960,000 and land P 2,600,000 on which buildings
ted. The land on which the building for lease is located costs P 1,200,000. As of December 31, 2021, this land
value of P 1,600,000 while the building for lease had a fair value of P 2,200,000. The company measures its
nt property using the cost model.

PPE) Non-Current Asset (NCA) 4,340,000

nvestment Property) Non-Current Asset (NCA) 2,000,000
Current Asset (CA) 450,000
t (PPE) Non-Current Asset (NCA) 2,960,000
) Non-Current Asset (NCA) 1,400,000
estment Property) Non-Current Asset (NCA) 1,200,000

ble assets include patents that cost P 820,000 and on which P 230,000 amortization has accumulated and
hares that cost P 180,000.

Non-Current Asset (NCA) 820,000

ted Amortization - Patent Less Patents (NCA) 230,000
Shares Equity (EQ) 180,000

assets include prepaid insurance (which expires on November 30, 2022) P 290,000, sinking fund for bond
t P 700,000, and trademarks that cost P 520,000 on which P 150,000 amortization has accumulated.

surance Current Asset (CA) 290,000

ing Fund Non-Current Asset (NCA) 700,000
ks Non-Current Asset (NCA) 520,000
ted Amortization - Trademark Less Trademarks (NCA) 150,000

liabilities include accounts payable of P 940,000, bonds payable (maturity date December 31, 2027) of P
, income taxes payable of P 720,000, and P 1,000,000 notes payable issued on June 30, 2020, and maturing
0, 2022. The company, as of December 31, 2021, negotiated with the lender to extend the maturity date of
to June 30, 2023.

Payable Current Liability (CL) 940,000

yable Non-Current Liability (NCL) 4,000,000
axes Payable Current Liability (CL) 720,000
able Non-Current Liability (NCL) 1,000,000

rm liabilities include accrued wages P 410,000, and mortgage payable (which is due in five equal annual
of P 2,000,000 starting December 31, 2022).

Wages Current Liability (CL) 410,000

Payable Non-Current Liability (NCL) 2,000,000

uted capital includes ordinary share capital (P 50 par) P 1,100,000 and preference share capital of P 600,000.

Share Capital Equity (EQ) 1,100,000

e Share Capital Equity (EQ) 600,000

ed capital includes premium on bonds payable P 430,000 and share premium of P 1,820,000.

on Bonds Payable Add Bonds Payable (NCL) 430,000

mium Equity (EQ) 1,820,000

d earnings includes unrestricted retained earnings of P 3,580,000, allowance for uncollectible accounts of P
ccumulated depreciation on buildings of P 2,100,000 (P300,000 of which relates to building for lease),
ted depreciation on equipment of P 1,300,000 and provision for warranties of P 200,000.

riated Retained Earnings Equity (EQ) 3,580,000

e for Uncollectible Accounts Less Accounts Receivable (CA) 70,000
ted Depreciation - B (PPE) Less Building - PPE (NCA) 1,800,000
ted Depreciation - B (IP) Less Building - IP (NCA) 300,000
ted Depreciation - E Less Equipment (NCA) 1,300,000
for Warranties Current Liability (CL) 200,000
 D Company
Statement of Financial
As of December 31

ASSETS: Note
Current Assets:
Cash 380,000
Financial Assets at FVPL 5 485,000
Trade and Other Receivables 6 2,780,000
Inventory 450,000
Prepaid Expenses 290,000
Non-Current Assets Held for Sale 7 1,200,000
Total Current Assets 5,585,000

Non-Current Assets:
Property, Plant, and Equipment 8 5,600,000
Investment Property 9 2,900,000
Intangible Assets 10 960,000
Other Non-Current Financial Assets 11 1,600,000
Total Non-Current Assets 11,060,000
TOTAL ASSETS 16,645,000

Notes to the Financial S

Note 1 - The Reporting Entity

Note 2 - Statement of Compliance (with IFRS)

Note 3 - Significant Accounting Policies

: inventory policy (FIFO)
: depreciation method (straight-line)
: cash equivalents policy

Note 4 - Other Disclosures

Note 5 - Financial Assets at Fair Value through Profit or Loss

The financial assets measured at fair value through profit or loss has an acquisition
cost of P 460,000. The fair value at December 31, 2021 is P 485,000.

Note 6 - Trade and Other Receivables

Accounts Receivable 1,850,000.00
Less: Allowance for Doubtful Accounts (70,000.00) 1,780,000.00
 Non-Trade Notes Receivables 1,000,000.00
TOTAL 2,780,000.00

Note 7 - Non-Current Asset Held for Sale

Land Cost 1,200,000.00 LOWER

Fair Value of Machinery 1,500,000.00

Less: Cost to Sell (100,000.00) 1,400,000.00

The land has carrying value of P 1,200,000. The land's carrying value will be recovered principally through
a sale rather than from continuing use. D Company is commited to sell the land and the sale is highly
probable. The estimated fair value at the end of the reporting period is P 1,500,000 and the entity expects
to incur costs to sell amounting to P 100,000.

Note 8 - Property, Plant, and Equipment

Land 1,400,000.00

Building 4,340,000.00
Less: Accumulated Depreciation - B (1,800,000.00) 2,540,000.00

Equipment 2,960,000.00
Less: Accumulated Depreciation - E (1,300,000.00) 1,660,000.00
TOTAL 5,600,000.00

Note 9 - Investment Property

Land 1,200,000.00

Building 2,000,000.00
Less: Accumulated Depreciation - B (300,000.00) 1,700,000.00
TOTAL 2,900,000.00

Note 10 - Intangible Assets

Patents 820,000.00
Less: Accumulated Amortization - P (230,000.00) 590,000.00

Trademarks 520,000.00
Less: Accumulated Amortization - T (150,000.00) 370,000.00
TOTAL 960,000.00

Note 11 - Other Non-Current Financial Assets

Bond Sinking Fund 700,000.00
Debt Investments at Amortized Cost 900,000.00
TOTAL 1,600,000.00

Note 12 - Trade and Other Payables

Accounts Payable 940,000.00
 Accrued Wages 410,000.00
Mortgage Payable 400,000.00
TOTAL 1,750,000.00

Note 13 - Other Non-Current Financial Liabilities

Bonds Payable 4,000,000.00
Add: Premium on Bonds Payable 430,000.00 4,430,000.00

Notes Payable 1,000,000.00

Mortgage Payable 1,600,000.00
TOTAL 7,030,000.00

Note 13 - Share Capital

Preference Share Capital, P XXX par, XXX share authorized, XXX
shares issued and outstanding 600,000.00
Ordinary Share Capital, P 50 par, XXX share authorized, 22,000
shares issued and outstanding 1,100,000.00
TOTAL 1,700,000.00
 D Company
Statement of Financial Position
As of December 31, 2021

LIABILITIES AND EQUITY: Note

Current Liabilities:
Trade and Other Payables 12 1,750,000
Income Taxes Payable 720,000
Provision for Warranties 200,000
Total Current Liabilities 2,670,000

Non-Current Liabilities:
Other Non-Current Financial Liabilities 13 7,030,000
Total Non-Current Liabilities 7,030,000
TOTAL LIABILITIES

Shareholders' Equity:
Share Capital 14 1,700,000
Share Premium 1,820,000
Retained Earnings 3,605,000
Treasury Shares (180,000)
TOTAL EQUITY 6,945,000

TOTAL LIABILITIES AND EQUITY 16,645,000

Notes to the Financial Statements

Problem E: The accounts below were taken from the unadjusted trial balance of E Company as at December 31, 2021.
assets and total current liabilities of E Company at December 31, 2021.

Account Title Classification

Cash and Cash Equivalents Current Asset (CA)
Investment in Securities Held for Trading at Cost Current Asset (CA)
Investment in Equity Securities (at FVOCI) Non-Current Asset (NCA)
Notes Receivable Current Asset (CA)
Trade Accounts Receivable Current Asset (CA)
Allowance for Bad Debts Less Accounts Receivable (CA)
Merchandise Inventory Current Asset (CA)
Notes Payable Current Liability (CL)
Trade Accounts Payable Current Liability (CL)
Employees Income Tax Withheld Current Liability (CL)
Bonds Payable Non-Current Liability (NCL)
Share Dividends Distributable Equity (EQ)
Income Tax Payable Current Liability (CL)
Deferred Tax Liability Non-Current Liability (NCL)

Additional Information:
a. Included in cash and cash equivalents is a 120-day, P 500,000, certificate of time deposit
September 17, 2021 and maturing on January 15, 2022. The certificate of deposit bears an interest
4.8%. C Company has not yet accrued any interest on this deposit.

Time Deposit Certificate 500,000

Multiply by: Interest Rate 4.8%
24,000
Multiply by: 105 ÷ 360 2/7
Accrued Interest on Time Deposit 7,000

Certificate of Time Deposit Current Asset (CA)

Accrued Interest on Time Deposit Current Asset (CA)

b. Trade accounts receivable was net of customer’s deposit of P 50,000.

Advances from Customers Current Liability (CL)

Trade Accounts Receivable Current Asset (CA)

c. Merchandise worth P 150,000 received December 30, 2021 was included in the inventory but w
recorded as a purchase.

Trade Accounts Payable Current Liability (CL)

d. Accounts payable was net of accounts with debit balance of P 100,000.

Advances to Suppliers Current Asset (CA)

Trade Accounts Payable Current Liability (CL)

e. A bank loan of P 300,000 due on December 31, 2023 was included in the notes payable balance.
Notes Payable Current Liability (CL)
Loans Payable Non-Current Liability (NCL)

f. Bonds payable, which bear interest of 10%, were issued on June 30, 2021, will mature in five
installments beginning June 30, 2022. The company has not recorded the accrued interest on these
at December 31, 2021.

Initial Cost of Bonds Payable 2,500,000

Multiply by: Interest Rate 10%
Annual Interest 250,000
Multiply by: 6 ÷ 12 1/2
Accrued Interest (2021) 125,000

Bonds Payable Current Liability (CL)

Bonds Payable Non-Current Liability (NCL)
Accrued Interest on Bonds Payable Current Liability (CL)

g. The securities held for trading have a fair value of P 900,000 while investment in equity se
measured through other comprehensive income have fair value of P 2,420,000.

Investment in Securities Held for Trading at Cost Current Asset (CA)

Investment in Equity Securities (at FVOCI) Non-Current Asset (NCA)

h. P 28,000 of deferred tax liability is expected to reverse in 2022.

Deferred Tax Liability Non-Current Liability (NCL)

Adjusted Balances
Account Title Classification
Cash and Cash Equivalents Current Asset (CA)
Investment in Securities Held for Trading at Cost Current Asset (CA)
Investment in Equity Securities (at FVOCI) Non-Current Asset (NCA)
Notes Receivable Current Asset (CA)
Trade Accounts Receivable Current Asset (CA)
Allowance for Bad Debts Less Accounts Receivable (CA)
Merchandise Inventory Current Asset (CA)
Notes Payable Current Liability (CL)
Trade Accounts Payable Current Liability (CL)
Employees Income Tax Withheld Current Liability (CL)
Share Dividends Distributable Equity (EQ)
Income Tax Payable Current Liability (CL)
Deferred Tax Liability Non-Current Liability (NCL)
Certificate of Time Deposit Current Asset (CA)
Accrued Interest on Time Deposit Current Asset (CA)
Advances from Customers Current Liability (CL)
Advances to Suppliers Current Asset (CA)
Loans Payable Non-Current Liability (NCL)
Bonds Payable Current Liability (CL)
Bonds Payable Non-Current Liability (NCL)
Accrued Interest on Bonds Payable Current Liability (CL)
s at December 31, 2021. Determine the total current Current Assets:
Cash and Cash Equivalents
Financial Assets at FVPL
fication Amount Certificate of Time Deposit
740,000 Accrued Interest on Time Deposit
870,000 Trade and Other Receivables
2,500,000 Merchandise Inventory
920,000 Advances to Suppliers
1,220,000 Total Current Assets
60,000
1,360,000 Current Liabilities:
1,500,000 Trade Accounts Payable
750,000 Advances from Customers
40,000 Notes Payable
2,500,000 Withholding Taxes Payable
150,000 Bonds Payable
280,000 Accrued Interest from Bonds Payable
78,000 Income Taxes Payable
Total Current Liabilities

rtificate of time deposit dated

deposit bears an interest rate of

500,000
7,000

50,000
50,000

ed in the inventory but was not

150,000

100,000
100,000

notes payable balance.

 (300,000)
300,000

2021, will mature in five annual

accrued interest on these bonds

500,000
2,000,000
125,000

investment in equity securities

000.

900,000
2,420,000

78,000

fication Amount
740,000
900,000
2,420,000
920,000
1,270,000
60,000
1,360,000
1,200,000
1,000,000
40,000
150,000
280,000
78,000
500,000
7,000
50,000
100,000
300,000
500,000
2,000,000
125,000
 740,000.00
900,000.00
500,000.00
7,000.00
2,130,000.00
1,360,000.00
100,000.00
5,737,000.00

1,000,000.00
50,000.00
1,200,000.00
40,000.00
500,000.00
125,000.00
280,000.00
3,195,000.00
Problem F: The following selected account balances and supplemental information were taken from the accounting record
Determine the total current liabilities at December 31, 2021.

Account Title Amount Other A

Sales 9,675,000
a. Mortgage note was refinanced
Mortgage Note Payable 1,300,000 year mortgage note after paying P
Bank Note Payable 300,000 no unpaid interest as of December
Accounts Payable 270,000
Share Dividends Distributable 200,000 Adjusted Amount: Mortgage Notes
Withholding Tax Payable 120,000 (refinancing happened on its due date; not

Current Liabilities:
b. The bank notes are payable in se
Mortgage Notes Payable 1,300,000 and August 1 of each year. Unpaid
Bank Notes Payable 100,000 This was paid on January 5, 2022.
Accrued Interest on Bank Notes 7,500
Accounts Payable 270,000 Adjusted Amount: Bank Notes Paya
Provision for Damages 650,000 Adjusted Amount: Bank Notes Paya
VAT Payable 288,000 Adjusted Amount: Accrued Interes
Withholding Tax Payable 120,000 (adjusted for current and non-current porti
Income Tax Payable 116,500
Total Current Liabilities 2,852,000
c. On August 1, 2021, a suit was fil
asking for P 1,000,000 damages. Th
suit will result in a loss to the comp
December 31, 2021 was P 650,000.

New Account: Provision for Damag

(recognition of provision for loss due to dam

d. The sales account included the

sale for the month of December o
to the BIR on January 20, 2017.

December Sales (inclusive of VAT)

Divide by: 1 + VAT percentage
December Sales (exclusive of VAT)
Multiply by: VAT percentage
VAT Payable
(only the P 2,688,000 sales is VATable, the r

e. Total income tax due for 2021

BIR during the year for income ta
35,000 on income tax related to th
2021 has not yet been taken up in t

Total Income Tax Due

Less: Quarterly Remittances (2021)
Quarterly Remittances Paid
Payment for 2020
Income Tax Payable
 om the accounting records of F Company as of December 31, 2021.

Other Additional Information:

ge note was refinanced on its due date, February 15, 2022 with a new 5-
gage note after paying P 300,000 cash on the principal balance. There was
interest as of December 31, 2021.

Amount: Mortgage Notes Payable 1,300,000

happened on its due date; not an adjusting event; NCL)

nk notes are payable in semi-annual installments of P 50,000 on February 1

st 1 of each year. Unpaid interest for 2021 of P 7,500 has not been taken up.
paid on January 5, 2022.

Amount: Bank Notes Payable (CL) 100,000

Amount: Bank Notes Payable (NCL) 200,000
Amount: Accrued Interest on Bank Notes 7,500
r current and non-current portion; recognition of accrued interest)

ust 1, 2021, a suit was filed by a dismissed employee against the company
P 1,000,000 damages. The company’s lawyer believes it is probable that the
esult in a loss to the company, and the best estimate of the obligation as of
r 31, 2021 was P 650,000.

unt: Provision for Damages 650,000

of provision for loss due to damages; using best estimate)

es account included the 12% value added tax (VAT) corresponding to the
he month of December of P 2,688,000 (inclusive of VAT). This was remitted
on January 20, 2017.

r Sales (inclusive of VAT) 2,688,000

1 + VAT percentage 112%
r Sales (exclusive of VAT) 2,400,000
y: VAT percentage 12%
ble 288,000
2,688,000 sales is VATable, the rest is not VATable)

ncome tax due for 2021 amounted to P 186,500. Quarterly remittances to

g the year for income tax totaled to P 105,000, including payment of P
income tax related to the year 2020. The balance due as of December 31,
not yet been taken up in the books.

me Tax Due 186,500

rterly Remittances (2021)
erly Remittances Paid 105,000
nt for 2020 (35,000) (70,000)
ax Payable 116,500
Problem G: Presented below are the account balances and related information on December 31, 2021 for G Company. Det
assets at December 31, 2021.

Cash on Hand and Cash in Bank 2,480,000

Accounts Receivable 800,000
Allowance for Uncollectible Accounts (150,000)
Inventories 1,200,000
Prepaid Insurance 250,000
Total Current Assets 4,580,000

Other Additional Information:

a. The cash balance consists of the following:
· Cash in bank, net of bank overdraft of P 20,000 maintained in a separate bank
account and includes a P 30,000 check received from a customer that is dated
January 8, 2022
(P 20,000 should be added back because the overdraft is maintain in a separate bank; post-dated
check should be excluded in the cash in bank and included in AR)
Add: Accounts Receivable

· Cash set aside by the board of directors for the purchase of a plant site
(classified as non-current asset because the cash is set aside for purchase of PPE)

· Petty cash (unreplenished expenses are P 15,000)

(included as part of cash on hand and cash in bank, but exclude the unreplenished expenses)

· Cash in bank, for payroll

(included as part of cash on hand and cash in bank)

b. The merchandise inventory includes goods held on consignment amounting to P 40,000 and goods
80,000 received on December 31, 2021. Neither of the items has been recorded as a purchase.

Unadjusted Balance 1,200,000

Less: Goods Held on Consignment (40,000)
Adjusted Balance 1,160,000
(goods received on December 31 should be included
in the balance of Accounts Payable)

c. The prepaid insurance includes cash surrender value of life insurance in the amount of P 50,000.

Unadjusted Balance 250,000

Less: Cash Surrender Value (50,000)
Adjusted Balance 200,000
(cash surrender value is classified as non-current
asset and is excluded in the unadjusted balance)
Cash on Hand and Cash in Bank 955,000
Accounts Receivable 830,000
Allowance for Uncollectible Accounts (150,000)
Inventories 1,160,000
Prepaid Insurance 200,000
Total Current Assets 2,995,000
31, 2021 for G Company. Determine the total current

400,000

390,000

30,000

1,500,000

40,000
25,000

540,000

955,000

nting to P 40,000 and goods of P

rded as a purchase.

he amount of P 50,000.
Problem H: The following totals were taken from the December 31, 2021 statement of financial position of Aquamarine C
(financial statements were authorized for issue on April 10, 2022)

Unadjusted Balance
Current Assets 3,500,000
Non-Current Assets 8,000,000
Current Liabilities 2,400,000
Non-Current Liabilities 2,700,000

Current Asset
Unadjusted Balances taken from Dec. 31 Balance Sheet 3,500,000

Additional Information:

a. Cash of P 380,000 has been placed in a fund for the

retirement of long-term debt. The cash and long-term debt
have been offset and are not reflected in the financial
statements.

3,000,000
b. Non-current assets include P 500,000 cost of treasury shares
and land costing P 3,000,000. This land had been retired from
active use and reclassified as held for sale. The sale is highly
probable and is expected to be consummated in July 2022.
Based on the negotiation with the potential buyer, estimated
sales price is P 3,500,000; transfer costs of P 250,000 is
expected to be incurred.

c. Advances on salesperson’s commissions in the amount of P 210,000

210,000 have been made. Also, sales commissions payable total
P 240,000. The net liability of P 30,000 is included in the current
liabilities.

140,000
d. Cash of P 140,000 has been set aside to pay taxes due. The
cash and taxes payable have been offset and do not appear in
the financial statements.

e. The company, as of December 31, 2021, was a defendant in a

lawsuit for violation of a contract with a supplier. As of
December 31, the company believed it was probable that
estimated damages of P 180,000 would result; thus, a liability
was recorded on that date. In March 2022, however, the court
decided the case and made an order to the company to pay the
plaintiff the amount of P 168,000.

Adjusted Balances 6,850,000

position of Aquamarine Company. Make the necessary adjustments and determine the following:

Adjusted Balance
Current Assets 6,850,000
Non-Current Assets 4,880,000
Current Liabilities 2,738,000
Non-Current Liabilities 3,080,000

Non-Current Asset Current Liability Non-Current Liability

8,000,000 2,400,000 2,700,000

380,000 380,000

(500,000)
(3,000,000)

(30,000)
240,000

140,000

(12,000)

4,880,000 2,738,000 3,080,000