UNIVERSITY OF SANTO TOMAS

UST - ALFREDO M. VELAYO COLLEGE OF ACCOUNTANCY

MA5128- Integrated Review in Financial Reporting, Planning,

Performance and Control
2nd Term- AY 2022-2023

Module 1- External Financial Reporting- Balance Sheet and Valuation

Name : ______________________________________________________ Section: ____________________

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____ 1. What is the primary objective of financial reporting?

a. to provide forecasts for future cash flows and financial performance
b. to provide economic information that is comprehensible to all users
c. to provide management with an accurate evaluation of their financial performance
d. to provide information that is useful for economic decision making
____ 2. The FASB is a(n):
a. group of accounting firms c. private sector body
b. international organization d. government unit
____ 3. Which of the following will best protect investors against fraudulent financial reporting by
corporations?
a. the fact that all firms must report the same way
b. criminal statutes
c. the integrity of management
d. the requirement that financial statements be audited
____ 4. Reporting accounts receivable at net realizable value is a departure from the accounting principle
of:
a. market value c. fair value
b. historical cost d. conservatism
____ 5. The balance sheet reports:
a. Cash flows for a period of time.
b. Assets and liabilities for a period of time.
c. Net income at a point in time.
d. Assets and equities at a point in time.
____ 6. The primary objective of external financial reporting:
a. direct measurement of the value of a business enterprise
b. provision of information that is useful to present and potential investors, creditors,
and others in making rational financial decisions regarding the enterprise
c. direct measurement of the enterprise’s stock price
d. establishment of rules for accruing liabilities
____ 7. Which of the following is true regarding the comparison of managerial and financial accounting?
a. managerial accounting has a past focus, and financial accounting has a future focus
b. managerial accounting is generally more precise
c. the emphasis on managerial accounting is relevance, and the emphasis on financial
accounting is timeliness
d. managerial accounting need not follow generally accepted accounting principles
(GAAP), while financial accounting must follow them.
____ 8. Notes to financial statements are beneficial in meeting the disclosure requirements of financial
reporting. The notes should not be used to:
a. describe depreciation methods employed by the company
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 b. describe significant accounting policies
c. describe principles and methods peculiar to the industry in which the company
operates, when these principles and methods are predominantly followed in that
industry
d. correct an improper presentation in the financial statements
____ 9. A classified balance sheet _______________:
a. Contains confidential information.
b. Shows subtotals for current assets and current liabilities.
c. Shows only current assets and current liabilities.
d. Shows changes in assets, liabilities, revenues and expenses.
____ 10. Which of the following is a primary reason a company’s book value is less than its market value?
a. Many valuable resources of the company are not recorded as assets.
b. Land and buildings are valued at their fair value.
c. Management recording errors.
d. Investors tend to be too optimistic about a company’s growth opportunities.
____ 11. Which of the following potentially limit the usefulness of the balance sheet?
a. All of the other answers represent potential limitations.
b. Many valuable resources of the company are not recorded as assets.
c. Many items in the balance sheet reflect estimates and judgments of management.
d. Property, plant, and equipment are recorded at their book values rather than fair
values.
____ 12. Current assets include cash and all other assets expected to become cash or be consumed:
a. Within one operating cycle.
b. Within one year or one operating cycle, whichever is shorter.
c. Within one year.
d. Within one year or one operating cycle, whichever is longer.
____ 13. A company would classify a six-month prepaid insurance policy as:
a. Investment. c. Current asset.
b. Property, plant, and equipment. d. Goodwill.
____ 14. Long-term solvency refers to:
a. The risk that a company will not be able to pay its long-term debt.
b. The amount of current assets relative to long-term assets.
c. The efficiency with which a company manages its resources.
d. The profitability of a company over a long-term period of time.
____ 15. Which is a shareholders' equity account in the balance sheet?
a. Accumulated depreciation. c. Salaries payable.
b. Paid-in capital. d. Accounts receivable.
____ 16. Notes payable that are due in two years are:
a. Long-term investments. c. Long-term liabilities.
b. Long-term intangible assets. d. Current liabilities.
____ 17. New Oaks Winery requires two months to make wine, two years to age it, one month to bottle it,
two months to sell it, and one month to collect the receivable. Its operating cycle is:
a. Six months. c. Thirty months.
b. Three months. d. Twelve months.
____ 18. Long-term assets generally include:
a. Land held for a possible future plant site.
b. Accounts receivable.
c. Prepaid rent.
d. Inventory held for sale.

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____ 19. Long-term productive assets used in the normal course of business are typically classified as:
a. Investments. c. Current assets.
b. Property, plant and equipment. d. Intangible assets.
____ 20. Patents, copyrights, franchises, and trademarks are examples of:
a. Intangible assets. c. Current assets.
b. Investments. d. Property, plant and equipment.
____ 21. ABC Company uses IFRS in preparing its financial statements and provided the following
information at year-end:

Cash 1,500,000
Accounts receivable- unassigned 2,000,000
Accounts receivable- assigned 1,200,000
Inventory, including inventory expected in the ordinary course of 1,000,000
operations to be sold beyond 12 months amounting to PHP700,000
Financial assets held for trading 300,000
Equity investment at FVOCI 8,000,000
Investment in associate 2,500,000
Equipment held for sale 2,000,000
Deferred tax asset 1,500,000

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

a. 8,000,000 c. 6,800,000
b. 6,000,000 d. 8,800,000
____ 22. ABC Company reported the following current assets at year-end:

Cash 5,000,000
Accounts receivable 2,000,000
Inventory, including goods received on consignment PHP200,000 800,000
Trading Securities- Bond Investment 1,000,000
Prepaid expenses, including a deposit of PHP50,000 made on 150,000
inventory to be delivered in 18 months
Total current assets 8,950,000

Cash in general checking account 3,500,000

Cash fund to retire 5-year bond payable 700,000
Cash fund to purchase equipment on third quarter of the comming 300,000
year
Cash held to pay value added taxes 500,000
Total cash 5,000,000

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

a. 7,700,000 c. 6,700,000
b. 7,400,000 d. 6,750,000
____ 23. ABC Co.'s adjusted trial balance at December 31, 2004, includes the following account balances:

Common Stock, PHP3 par PHP360,000

Additional Paid-In Capital 480,000
Treasury Stock, at cost 30,000
Net Unrealized Loss on Available-for-Sale Securities 12,000
Retained Earnings: Appropriated for Uninsured Earthquake Losses 90,000
Retained Earnings: Unappropriated 120,000

What amount should ABC report as total stockholders' equity in its December 31, 2004, balance
sheet?

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 a. PHP1,092,000 c. PHP1,068,000
b. PHP1,008,000 d. PHP1,032,000
____ 24. ABC Corporation's trial balance included the following account balances at December 31, 2021:

Accounts Payable PHP45,000

Bonds Payable, due 2022 75,000
Discount on Bonds Payable, due 2022 9,000
Dividends Payable January 31, 2022 24,000
Notes Payable, due January 31, 2025 60,000

What amount should be included in the current liability section of ABC' December 31, 2021, balance
sheet?
a. PHP153,000 c. PHP135,000
b. PHP195,000 d. PHP234,000
____ 25. ABC Co. has total debt of PHP252,000 and stockholders' equity of PHP420,000. ABC is seeking
capital to fund an expansion. ABC is planning to issue an additional PHP180,000 in common stock,
and is negotiating with a bank to borrow additional funds. The bank requires a maximum debt ratio
of .75. What is the maximum additional amount ABC will be able to borrow after the common stock
is issued?
a. PHP1,548,000 c. PHP1,236,000
b. PHP639,000 d. PHP852,000
____ 26. The accounts and balances shown below were gathered from ABC Corporation's trial balance on
December 31, 2021. All adjusting entries have been made.

Wages Payable PHP 25,600

Cash 17,700
Mortgage Payable 151,600
Dividends Payable 14,000
Prepaid Rent 13,600
Inventory 81,800
Sinking Fund Assets 52,400
Short-Term Investments 15,200
Premium on Bonds Payable 4,600
Stock Investment in Subsidiary 102,400
Taxes Payable 22,800
Accounts Payable 24,800
Accounts Receivable 36,600

The amount that should be reported as current assets on ABC Corporation's balance sheet is
a. PHP267,300. c. PHP151,300.
b. PHP217,300. d. PHP164,900.
____ 27. The December 31, 2021, balance sheet of ABC Inc., reported total assets of PHP1,050,000 and total
liabilities of PHP680,000. The following information relates to the year 2022:

• ABC Inc. issued an additional 5,000 shares of common stock at PHP25 per
share on July 1, 2022.
• ABC Inc. paid dividends totaling PHP80,000.
• Net income for 2022 was PHP110,000.
• No other changes occurred in stockholders' equity during 2022.

The stockholders' equity section of the December 31, 2022, balance sheet would report a balance of:
a. PHP525,000. c. PHP835,000.
b. PHP685,000. d. PHP400,000.

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 ABC Corporation was organized on January 3, 2021. ABC was authorized to issue 50,000 shares of
common stock with a par value of PHP10 per share. On January 4, ABC issued 30,000 shares of
common stock at PHP25 per share. On July 15, ABC issued an additional 10,000 shares at PHP20
per share. ABC reported an income of PHP33,000 during 2021. In addition, ABC declared a dividend
of PHP.50 per share on December 31, 2021.

____ 28. The amount reported on ABC Corporation's December 31, 2021, balance sheet as additional paid-in
capital was:
a. PHP563,000. c. PHP550,000.
b. PHP400,000. d. PHP950,000.
____ 29. The amount reported on ABC Corporation's December 31, 2021, balance sheet as stockholders'
equity was:
a. PHP963,000. c. PHP950,000.
b. PHP400,000. d. PHP550,000.
____ 30. The accounts and balances shown below were gathered from ABC Corporation's trial balance on
December 31, 2021. All adjusting entries have been made.

Wages Payable PHP 25,600

Cash 17,700
Mortgage Payable 151,600
Dividends Payable 14,000
Prepaid Rent 13,600
Inventory 81,800
Sinking Fund Assets 52,400
Short-Term Investments 15,200
Premium on Bonds Payable 4,600
Stock Investment in Subsidiary 102,400
Taxes Payable 22,800
Accounts Payable 24,800
Accounts Receivable 36,600

ABC Corporation's working capital is:

a. PHP62,500. c. PHP125,700.
b. PHP73,100. d. PHP77,700.
____ 31. Which of the following is not true about the Balance Sheet?
a. provide useful information about liquidity but not long-term solvency
b. sometimes referred to as the statement of financial position
c. it is a freeze frame or snapshot of a company’s financial position at the end of an
accounting period
d. present an organized list of assets, liabilities, and equity at a point in time
____ 32. This refers to the assessment of the ability of the company to pay all its liabilities:
a. long-term solvency c. liquidity
b. any of these d. solvency
____ 33. Which of the following statements are false about financial flexibility?
a. the higher percentage of a company’s liabilities to its equity, the easier it typically
will be able to borrow additional funds either to take advantage of a promising
investment opportunity or to meet obligations
b. in general, the less financial flexibility, the more risk there is that an enterprise will
fail
c. other things being equal, the risk that a company will not be able to pay its debt
increases as its liabilities, relative to equity increases
d. financial flexibility is the ability of a company to alter cash flows in order to take
advantage of unexpected investment opportunities and needs

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____ 34. An analysis of an entity’s $150,000 accounts receivable at year-end resulted in a $5,000 ending
balance for its allowance for uncollectible accounts and a bad debt expense of $2,000. During the
past year, recoveries on bad debts previously written off were correctly recorded at $500. If the
beginning balance in the allowance for uncollectible accounts was $4,700, what was the amount
of accounts receivable written off as uncollectible during the year?
a. $2,800 c. $1,200
b. $1,800 d. $2,200
____ 35. The following information applies to a manufacturing company, which has a 6-month operating
cycle:

Cash sales $100,000

Credit sales during the sixth month with net 30 days terms 150,000
Credit sales during the fifth month with a special term of net 9 10,000
months
Interest earned and accrued on an investment that matures during 2,000
month 3 of the next cycle

The total of the company’s trade accounts receivable at the end of the current cycle is:
a. $160,000 c. $260,000
b. $262,000 d. $152,000
____ 36. CMA Cakes and Pastries estimates the allowance for uncollectible accounts at 3% of the ending
balance of accounts receivable. During 2021, CMA's credit sales and collections were $125,000 and
$131,000, respectively. What was the balance of accounts receivable on January 1, 2021, if $180
in accounts receivable were written off during 2021 and if the allowance account had a balance
of $750 on December 31, 2021?
a. $31,000.
b. $31,180.
c. None of these answer choices are correct.
d. $5,820.
____ 37. The following information relates to CMA Co.'s accounts receivable for 2021:

Accounts receivable balance, 1/1/2021 $ 840,000

Credit sales for 2021 3,300,000
Accounts receivable written off during 2021 70,000
Collections from customers during 2021 3,100,000
Allowance for uncollectible accounts balance, 12/31/2021 210,000

What amount should CMA report for accounts receivable, before allowances, at December 31,
2021?
a. $1,040,000.
b. $970,000.
c. None of these answer choices are correct.
d. $760,000.

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____ 38. The following aging information pertains to CMA Co.'s accounts receivable at December 31, 2021:

Estimated %
Days Outstanding
Amount Uncollectible
0-30 $ 420,000 2%
31-60 140,000 5%
61-120 100,000 10%
Over 120 120,000 20%

During 2021, CMA wrote off $18,000 in receivables and recovered $6,000 that had been written off
in prior years. CMA's December 31, 2020, allowance for uncollectible accounts was $40,000. Using
the balance sheet approach, what amount of allowance for uncollectible accounts should CMA
report at December 31, 2021?
a. $31,400. c. $49,400.
b. $55,400. d. $28,000.
____ 39. A corporation uses a calendar year for financial and tax reporting purposes and has $100 million of
mortgage bonds due on January 15, Year 2. By January 10, Year 2, the corporation intends to
refinance this debt with new long-term mortgage bonds and has entered into a financing agreement
that clearly demonstrates its ability to consummate the refinancing. This debt is to be:
a. considered off-balance-sheet debt
b. classified as a current liability on the statement of financial position at December
31, Year 1
c. retired as of December 31, Year 1
d. classified as a long-term liability on the statement of financial position at
December 31, Year 1
____ 40. In a perpetual inventory system, the cost of purchases is debited to:
a. Inventory. c. Accounts payable.
b. Cost of goods sold. d. Purchases.
____ 41. Which of the following is false regarding the FIFO inventory method?
a. FIFO under a perpetual inventory system results in the same cost of goods sold as
FIFO under a periodic inventory system.
b. A company can choose to account for the flow of inventory using the FIFO
method even if this doesn't match the actual flow of its inventory.
c. Perishable goods often follow an actual physical flow that is consistent with the
FIFO method assumptions.
d. All of the other answer choices are true.
____ 42. Inventory records for CMA Company revealed the following:

March 1, 2021, inventory: 1,000 gallons @ $7.20 per gallon = $7,200

Purchases: Sales:
Mar. 10 600 gals @ $ 7.25 Mar. 5 400 gals
Mar. 16 800 gals @ $ 7.30 Mar. 14 700 gals
Mar. 23 600 gals @ $ 7.35 Mar. 20 500 gals
Mar. 26 700 gals

Ending inventory assuming LIFO in a periodic inventory system would be:

a. $5,055. c. $5,135.
b. $5,040. d. $5,075.
____ 43. During periods when costs are rising and inventory quantities are stable, ending inventory will be:
a. Lower under average cost than LIFO.
b. Higher under LIFO than FIFO.
c. Higher under average cost than FIFO.
d. Higher under FIFO than LIFO.
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____ 44. For companies using FIFO or average cost, inventory is valued at:
a. Replacement cost. c. Cost.
b. Net realizable value. d. Lower of cost or net realizable value
____ 45. Management has adopted a policy of reporting its unsold inventory at the end of each year at the
lower of LIFO cost or the estimated selling price of that inventory in the next year. Which of the
following statements is correct?
a. Management should instead choose the higher of the two amounts to report
inventory.
b. Management's policy is acceptable.
c. Management should instead report inventory at the lower of cost or the most recent
selling price in the current year.
d. Management also needs to consider the inventory's replacement cost.
____ 46. CMA Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information
pertaining to that inventory is as follows:

Selling price $ 620,000

Costs to sell 30,000
Replacement cost 520,000

What should be the reported value of CMA's inventory?

a. $620,000. c. $590,000.
b. $520,000. d. $600,000.
____ 47. Data related to the inventories of CMA Medical Supply are presented below:

Surgical Surgical Rehab Rehab

Equipment Supplies Equipment Supplies
Selling price $ 260 $ 100 $ 340 $ 165
Cost 170 90 250 162
Costs to sell 30 15 25 10

In applying the lower of cost or net realizable value rule, the inventory of surgical equipment
would be valued at:
a. $230. b. $240. c. $170. d. $152.
____ 48. For companies using LIFO, inventory is valued at:
a. Cost. c. Lower of cost or market.
b. Replacement cost. d. Net realizable value.
____ 49. CMA Co. has determined its year-end inventory on a LIFO basis to be $600,000. Information
pertaining to that inventory is as follows:

Selling price $ 720,000

Costs to sell 30,000
Normal profit margin 80,000
Replacement cost 620,000

What should be the reported value of CMA's inventory?

a. $610,000. c. $690,000.
b. $620,000. d. $600,000.

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____ 50. Data related to the inventories of CMA Medical Supply are presented below:

Surgical Surgical Rehab Rehab

Equipment Supplies Equipment Supplies
Selling price $ 260 $ 120 $ 340 $ 165
Cost 170 90 250 162
Replacement cost 240 80 235 158
Costs to sell 30 5 25 10
Normal gross profit ratio 30% 30% 30% 20%

In applying the lower of cost or market rule, the inventory of surgical equipment would be
valued at:
a. $152. b. $170. c. $230. d. $240.
____ 51. Which of the following investment securities held by CMA Inc. are not reported at fair value in its
balance sheet?
a. Bonds held as trading securities.
b. All of these answer choices are reported at fair value.
c. Debt securities held-to-maturity.
d. Debt securities held as available-for-sale securities.
____ 52. CMA Inc. purchased several investments in debt securities during 2020, its first year of operations.
The following information pertains to these securities. The fluctuations in their fair values are not
considered permanent.

Held-to-Maturity Fair Value Fair Value Amortized Amortized

Securities: 12/31/2020 12/31/2021 Cost Cost
12/31/2020 12/31/2021
ABC Co. Bonds $ 375,000 $ 400,000 $ 367,500 $ 360,000

Trading Fair Value Fair Value

Securities: 12/31/2020 12/31/2021 Cost
DEF Co. Bonds $ 48,000 $ 59,500 $ 66,000
GEH Inc. Bonds $ 47,000 $ 77,000 $ 39,000
IJK Inc. Bonds $ 44,000 $ 38,500 $ 32,900

Available-for-Sale Fair Value Fair Value

Securities: 12/31/2020 12/31/2021 Cost
LMN Co. Bonds $ 130,500 $ 150,400 $ 140,000

What balance sheet amount would CMA report for the total of its investments in bonds at
12/31/2020?
a. None of these answer choices are correct.
b. $637,000.
c. $645,400.
d. $644,500.
____ 53. On January 1, 2021, CMA Retailers purchased $100,000 of CPA Company bonds at a discount of
$5,000. The CPA bonds pay 6% interest but were purchased when the market interest rate was 7%
for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and
December 31 of each year. CMA accounts for the bonds as a held-to-maturity investment and uses
the effective interest method. In CMA's December 31, 2021, journal entry to record the second
period of interest, CMA would record a credit to interest revenue of:
a. $3,500. c. $3,336.
b. $3,325. d. $3,000.

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____ 54. If CMA Company concluded that an investment originally classified as a trading security would now
more appropriately be classified as held-to-maturity, CMA would:
a. Reclassify the investment as held-to-maturity, but there would be no income effect.
b. Reclassify the investment as held-to-maturity and immediately recognize in net
income all unrealized holding gains and losses that have not already been
recognized as of the reclassification date.
c. Not reclassify the investment, as original classifications are irrevocable.
d. Reclassify the investment as held-to-maturity and treat the fair value as of the date
of reclassification as the investment's amortized cost basis for future amortization.
____ 55. On January 1, 2021, Nana Company paid $100,000 for 8,000 shares of Papa Company common
stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence
over Papa Company. Papa reported net income of $52,000 for the year ended December 31, 2021.
The fair value of the Papa stock on that date was $45 per share. What amount will be reported in
the balance sheet of Nana Company for the investment in Papa at December 31, 2021?
a. $315,600. c. $284,400.
b. $300,000. d. $360,000.
____ 56. GAAP regarding fair value accounting for investments in equity securities will generally apply to
an investment when the percentage of ownership of another company is:
a. Over 50%. c. Less than 20%.
b. 20% to 50%. d. Exactly 100%.
____ 57. CMA Company bought 28,000 shares of the voting common stock of CISA Corporation in January
2021. In December, CISA announced $200,000 net income for 2021 and declared and paid a cash
dividend of $2 per share on all 200,000 shares of its outstanding common stock. CMA Company's
dividend revenue from CISA Corporation in December 2021 would be:
a. $28,000.
b. $0.
c. None of these answer choices are correct.
d. $56,000.
____ 58. If Pop Company exercises significant influence over Son Company and owns 40% of its common
stock, then Pop Company:
a. Would record 40% of the net income of Son Company as investment income each
year.
b. Would increase its investment account when Son Company declares dividends.
c. All of these answer choices are correct.
d. Would record dividends received from Son Company as investment revenue.
____ 59. When using the equity method to account for an investment, cash dividends received by the
investor from the investee should be recorded:
a. As an increase in the investment account.
b. As dividend income.
c. As a reduction in the investment account.
d. As a contra item to stockholders' equity.

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____ 60. A corporation purchased 100% of the shares of CMA Corporation for $600,000. Financial
information for CMA Corporation is provided below:
CMA Corporation
($000)
Carrying Fair
Amount Value
Cash $50 $50
Accounts receivable 100 100
Inventory 150 100
Total current assets 300 250
Property, plant, and equipment (net) 500 600
Total assets $800

Current liabilities $150 $150

Long-term liabilities 200 200
Total liabilities 350 350
Common stock 150 150
Paid-in-capital 80 80
Retained earnings 220
Total liabilities and shareholders’ equity $800

The amount of goodwill resulting from this purchase, if any, would be:
a. $150,000 c. $100,000
b. $0 d. $200,000

Completion
Complete each statement.

Problem 1- The following are the typical classifications used in a balance sheet:

a. Current assets
b. Investments
c. Property, plant, and equipment
d. Intangible assets
e. Other assets
f. Current liabilities
g. Long-term liabilities
h. Paid-in capital
i. Retained earnings

1. Equipment
2. Accounts payable
3. Allowance for uncollectible accounts
4. Land (held for investment)
5. Notes payable (due in 5 years)
6. Deferred revenue (for the next 12 months)
7. Notes payable (due in 6 months)
8. The accumulated amount of net income less dividends
9. Investment in AYZ Corp. (long-term)
10. Inventory
11. Patent
12. Land (used in operations)
13. Accrued liabilities (due in 6 months)
14. Prepaid rent (for the next 9 months)
15. Common stock

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 16. Building (used in operations)
17. Cash
18. Income Tax Payable

Required:

61. For each of the following balance sheet items, use the letters above to indicate the appropriate
classification category. If the item is a contra account, place minus sign before the chosen letter.

Problem 2- The following are the ending balances of accounts at December 31, 2021, for ABC
Corporation.

Account Title Debits Credits

Cash PHP25,000
Accounts receivable 56,000
Inventory 81,000
Interest payable PHP10,000
Investment in equity securities 44,000
Land 120,000
Buildings 300,000
Accumulated depreciation- buildings 100,000
Equipment 75,000
Accumulated depreciation- equipment 25,000
Copyright (net) 12,000
Prepaid expenses (next 12 months) 32,000
Accounts payable 65,000
Deferred revenue (next 12 months) 20,000
Notes payable 250,000
Allowance for uncollectible accounts 5,000
Common stock 200,000
Retained earnings 70,000
Totals PHP745,000 PHP745,000

Additional Information:

1. The PHP120,000 balance in the land account consists of PHP100,000 for the cost of land where
the plant and office buildings are located. The remaining PHP20,000 represents the cost of land
being held for speculation.

2. The PHP44,000 balance in the investment in equity securities account represents an investment
in the common stock of another corporation. ABC intends to sell one-half of the stock within the
next year.

3. The notes payable account consists of a PHP100,000 note due in six months and a PHP150,000
note due in three annual installments of PHP50,000 each, with the first payment due in August of
2022.

Required:

62. Prepare a classified balance sheet for ABC Corporation at December 31, 2021. Use the additional
information to help determine appropriate classifications and account balances.

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