Updates in Philippine Accounting and Financial Reporting Standards 1

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 2

Learning Activities

Name: ANGEL MAE A. HAMPAC

Class Schedule: TTH 2:30 – 4:00 PM

Directions: Read and analyze the following activity and answer what is required. Submit
your work in the pigeon boxes which are provided in your department/college, or to google
class on or before the date as reflected in your study schedule. See Rubrics in appendix.
You may also access the rubrics in the classwork section in the google classroom.

Activity 1
Loving Care Company provided the following balances on December 21, 2021:
Franchise 200,000
Goods in process 600,000
Building 4,000,000
Employees income tax payable 20,000
Prepaid insurance 20,000
Raw materials 200,000
Notes payable 100,000
Cash 420,000
Accounts receivable 500,000
Retained earnings 880,000
Finished goods 400,000
Accrued Expenses 30,000
Trading securities 250,000
Claim receivable 20,000
Machinery 2,000,000
Advance from customer 100,000
Tools 40,000
Goodwill 100,000
Accumulated Depreciation-Machinery 1,300,000
Allowance for doubtful account 50,000
Plant expansion fund 500,000
Serial bonds payable (500,000 due every) 2,500,000
July 31 of each year
Accounts payable 300,000
Share capital 5,000,000
Accumulated Depreciation-Building 1,600,000
Income tax payable 60,000
Factory supplies 50,000
Share premium 500,000
Accrued interest on notes payable 10,000
Investment in bonds 1,500,000
Land 1,500,000
Notes Receivable 150,000

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 3

Required:
Prepare a properly classified statement of financial position on December 31, 2021

LOVING CARE COMPANY

Statement of Financial Position
December 31, 2021

ASSETS
Current Asset: notes
Cash 420,000
Trade and other Receivables (1) 620,000
Inventories (2) 1,250,000
Prepaid insurance 20,000
Trading securities 250,000
Total current assets 2,560,000

Noncurrent Asset:
Property, Plant and Equipment (3) 4,640,000
Long-term investment (4) 2,000,000
Intangible Asset (5) 300,000
Total noncurrent asset 6,940,000
Total Assets 9,500,000

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:
Trade and other Payables (6) 620,000
Serial bonds payable- current portion 500,000
Total current liabilities 1,120,000

Noncurrent Liabilities
Serial bonds payable 2,000,000
Total noncurrent liabilities 2,000,000

Shareholders’ Equity
Share capital 5,000,000
Share premium 500,000
Retained earnings 880,000
Total shareholders’ equity 6,380,000
Total Liabilities and Shareholder’s equity 9,500,000

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 4

Note 1- Trade and other Receivables

Accounts Receivables 500,000
Allowance for doubtful accounts (50,000)
Claim receivable 20,000
Notes Receivables 150,000
Total 620,000
Note 2 – Inventories
Raw Materials 200,000
Goods in process 600,000
Finished goods 400,000
Factory supplies 50,000
Total 1,250,000
Note 3- Property, Plant and Equipment
Machinery 2,000,000
Accumulated Depreciation- Machinery (1,300,000)
Building 4,000,000
Accumulated Depreciation- Building (1,600,000)
Land 1,500,000
Tools 40,000
Total 4,640,000
Note 4- Long term investment
Investment in bonds 1,500,000
Plant expansion fund 500,000
Total 2,000,000
Note 5- Intangible Asset
Franchise 200,000
Goodwill 100,000
Total 300,000
Note 6- Trade and other Payables
Advance from customer 100,000
Accounts Payable 300,000
Notes Payable 100,000
Accrued interest on notes payable 10,000
Employees income tax payable 20,000
Income tax payable 60,000
Accrued expenses 30,000
Total 620,000

“Not intended for publication. For classroom instruction purposes only”.