Statement of Financial Position Basic Problems Problem 1-1 (IFRS)
Statement of Financial Position Basic Problems Problem 1-1 (IFRS)
Basic Problems
Cash 1,100,000
Accounts receivable 1,600,000
Inventory 3,000,000
Financial assets at fair value through profit or loss 500,000
Bonds investment at amortized cost 1,300,000
Investment in associate 1,500,000
Equipment and furniture 2,500,000
Accumulated depreciation 1,500,000
Patent 400,000
Deferred charges 100,000
Equipment classified as held for sale 2,000,000
Cash 5,000,000
Accounts receivable 2,000,000
Inventory, including goods received on
Consignment P200,000 800,000
Bond investment at fair value through
other comprehensive income 1,000,000
Prepaid expenses, including including a deposit of P50,000
made on inventory to be delivered in 18 months 150,000
What total amount of current assets should be reported on December 31, 2016?
Rice Company was incorporated on January 1, 2016 with P5,000,000 from the issuance of share capital and borrowed
funds of P1,500,000. During the first year, net income was P2,500,000.
On December 15, the entity paid a P500,000 cash dividend. On December 31, 2016, the liabilities had increased to
P1,800,000.
Mirr Company was incorporated on January 1, 2016 with proceeds from the issuance of P7,500,000 in share capital and
borrowed funds of P1,100,00. During the first year, revenue from sales and consulting amounted to P8,200,000, and
operating costs and expenses totaled P6,400,000.
On December 15, 2016, the entity declared a P300,000 dividend, payable to shareholders on January 15,2017. The
liabilities increased to P2,000,000 by December 31,2016.
Cash 4,500,000
Accounts Receivable 7,500,000
Notes Receivable, net of discounted note P500,000 2,000,000
Inventory 4,000,000
18,000,000
7,500,000
On December 31, 2016, what amount should be reported as total current assets?
Problem 1-7 (AICPA Adapted)
On December 31, 2016, Statute Company reported the following current assets:
Cash 700,000
Accounts Receivable 1,200,000
Inventory 600,000
What total amount of current assets should be reported on December 31, 2016?
Cash 3,200,000
Accounts receivable 3,000,000
Inventory 2,800,000
Prepaid insurance 200,000
Gar Company reported the following liability account balances on December 31, 2016:
The deferred tax liability is based in temporary differences that will reverse in 2018.
On December 31, 2016, what total amount should be reported as current liabilities?
The contingent liability is an accrual for possible loss on a P1,000,000 lawsuit against the entity.
The legal counsel expects the suit to be settled in 2017 and has estimated that the entity will be liable for damages in the
range of P450,000 to P750,000.
The deferred tax liability is not related to an asset for financial reporting and is expected to reverse in 2017.
Mazda Company reported the following liability balances on December 31, 2016:
The 2016 financial statements were issued on March 31, 2017. Under the loan agreement for the 10% note payable, the
entity has the discretion to refinance the obligation for at least twelve months after December 31, 2016.
On March 1, 2017, the entire P4,000,000 balance of the 12% note payable was refinanced through issuance of a long-term
obligation payable lump sum.
What amount of the notes payable should be classified as current on December 31, 2016?
The P1,000,000 bank loan was refinanced with a 5-year loan on January 15,2017. The financial statements were issued
March 1, 2017.
What total amount should be reported as current liabilities on December 31, 2016?
On December 31, 2016, Ace Company had P40,000,000 note payable due on February 28, 2017. On December 31, 2016,
the entity arranged a line of credit with City Bank which allows the entity to borrow up to P35,000,000 at one percent
above the prime rate for three years.
On February 15, 2017, the entity borrowed P25,000,000 from City Bank and used P5,000,000 additional cash to liquidate
P30,000,000 note payable. The financial statements were issued on March 31, 2017.
What amount of note payable should be reported as current liability on December 31, 2016?
Jam Company had P2,000,000 note payable that is due on February 28, 2017. The entity borrowed P1,600,000 on
February 25, 2017 which has a five year term and used the proceeds to pay down the note and used other cash to pay the
balance.
How much of the note payable is classified is classified as current in the December 31, 206 financial statements that were
issued on March 31, 2017?
Problem 1-18
Mont Company reported net assets totaling P8,750,000 at year-end which included the following:
Peach Company reported total assets of P8,500,000 at year-end which included the following: