Natalie Clyde N.

Mates
2BSA-2

PROBLEM 1: TRUE OR FALSE

1. True
2. False - An entity may depart from the provisions of PFRS if it will provide more relevant
and reliable information.
3. True
4. False - one of the general features of Financial Statements is the comparative
information that's why PAS 1 requires an entity to present preceding year’s FS for
comparability purposes.
5. True
6. True
7. True
8. False - Investment in Equity Securities at FVOCI are non current assets.
9. True
10. False - Investment properties are noncurrent assets.

PROBLEM 2: For Classroom Discussion

1. A
2. C
3. C
4. C
5. C
6. D
7. Morning Co.

Morning Co.
Statement of Financial Position
As of December 31, 20x1
(amounts in Philippine Pesos)

ASSETS Notes 20x1

Current Assets
Cash and Cash equivalents 6 ₱1,060,000
Trade and other receivables 7 1,770,000
Held for trading Securities 800,000
Inventories 1,200,000
Total current assets 4,830,000
Non Current Assets
Investment in Equity Securities - FVOCI 300,000
Investment Property 900,000
Property, Plant and Equipment 8 4,900,000
Total noncurrent assets 6,100,000

TOTAL ASSETS ₱ 10,930,000

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 9 ₱ 1,140,000
Provisions 430,000
Income Tax Payable 500,000
Total current liabilities 2,070,000
Non Current Liabilities
Loans payable-net 10 2,260,000
Deferred tax liability 300,000
Total Non Current Liabilities 2,560,000
TOTAL LIABILITIES 4,630,000
EQUITY
Ordinary Share Capital 4,000,000
Share Premium 600,000
Retained Earnings 1,640,000
Other Components of Equity 11 60,000
Total Equity 6,300,000

TOTAL LIABILITIES AND EQUITY ₱10,930,000

Requirement B

Note 6: Cash and Cash Equivalents

Cash on Hand 60,000
Cash in Bank 1,000,000
Cash and cash equivalents 1,060,000

Note 7: Trade and Other receivables

Accounts receivable 2,000,000
Allowance for Doubtful Accounts (300,000)
Advances to employees 40,000
Advances to suppliers 30,000
Trade and other receivables 1,770,000

Note 8: PPE
Land 2,200,000
Building 3,400,000
Accumulated depreciation (700,000)
PPE 4,900,000

Note:9 Trade and other payables

Accounts payable 720,000
Accrued Liabilities 80,000
Interest Payable 340,000
Trade and other payables 1,140,000

Note 10: Loans payable

Loans payable 3,000,000
Discount on Loans Payable (740,000)
Loans payable-net 2,260,000

Note 11: Other Components of Equity

Revaluation surplus 90,000
Translation loss on foreign operation (30,000)
Other components of equity 60,000
PROBLEM 3: EXERCISE
Evening Co.
Statement of Financial Position
As of December 31, 20x1
(amounts in Philippine Pesos)

ASSETS Notes 20x1

Current Assets
Cash and Cash Equivalents 6 ₱1,100,000
Trade and other receivables 7 1,770,000
Inventories 200,000
Total current assets 3,070,000
Non current Assets
Biological Assets 1,200,000
Investment property 900,000
Property, Plant and Equipment 8 4,400,000
Intangible Assets 9 560,000
Other non current assets 10 800,000
Total noncurrent assets 7,860,000
Total Assets ₱10,930,000

Liabilities and Equity

Current Liabilities
Trade and other payables 11 ₱920,000
Loans Payable-Net 12 1,760,000
Provisions 430,000
Total current liabilities 3,110,000
Noncurrent Liabilities
Net Defined benefit liability 13 1,700,000
Total noncurrent Liabilities 1,700,000

Total Liabilities 4,810,000

Equity
Ordinary Share Capital 4,000,000
Share Premium 14 970,000
Retained Earnings 15 1,220,000
Other Components of Equity 30,000
Treasury Shares (100,000)
Total Equity 6,120,000
Total Liabilities and Equity ₱10,930,000
Note 6: Cash and Cash Equivalents
Cash on Hand 120,000
Cash in Bank 980,000
Cash and Cash Equivalents 1,100,000

Note 7: Trade and Other Receivables

Accounts Receivable 2,000,000
Allowance for Doubtful Accts (300,000)
Advances to Employees 40,000
Advances to Suppliers 30,000
Trade and Other Receivables 1,770,000

Note 8: PPE
Building 4,800,000
Accumulated Depreciation (1,600,000)
Land(office building site) 1,200,000
PPE 4,400,000

Note 9: Intangible assets

Patent 440,000
Accumulated Amortization (80,000)
Website 250,000
Accumulated Amortization (50,000)
Intangible assets 560,000

Note 10: Other Non current assets

Advances to Officers 130,000
Advances to Affiliates 670,000
Other NCA 800,000

Note 11: Trade and Other Payables

Accounts Payable 720,000
Utility Payable 80,000
Deposit Liabilities for returnable containables 120,000
Trade and Other Payables 920,000

Note 12: Loans Payable

Loans payable 2,500,000
Discount on Loans P. (740,000)
Loans Payable-net 1,760,000
Note 13: Net Defined Benefit Liability
Present Value of defined benefit obligation 2,700,000
FV of plan assets (1,000,000)
Net Defined Benefit Liability 1,700,000

Note 14: Share Premium

Share Premium 600,000
Share premium - Share warrants Outstanding 300,000
Share Premium- Treasury Shares 70,000
Share premium 970,000

Note 15: Retained Earnings

Retained Earnings 1,030,000
Reserves for Contingencies 190,000
Retained Earnings 1,220,000

PROBLEM 5: Multiple Choice

1. D
2. C
3. C
4. B
5. B
6. D
7. A
8. B
9. B
10. B
11. D
12. C
13. C
14. A
15. C
PROBLEM 6: Multiple Choice-Computational
1. C
2. A
3. B
4. A
5. C
6. A
Solutions:
1. Trade Accounts 96,000
Allowance for Doubtful Accounts (2,000)
Adjusted Accounts Receivable 94,000
Adjusted Inventory 80,000
(26K / 130%) + Beg Inv. 60,000
Cash 70,000
Total Current Assets 244,000

2. Accounts Payable 15,000

Bonds Payable, due 20x4 25,000
Discount on Bonds Payable, due 20x4 (3,000)
Dividends Payable, 1/31/x4 8,000
Current Liabilities 45,000

3. Earnings from long term contracts 6,680,000

Costs and Expenses (5,180,000)
Profit before tax 1,500,000
Income tax expense (1.5M x 30%) (450,000)
Profit after tax 1,050,000
Retained earnings-Unappropriated 900,000
Retained earnings-Restricted for note 160,000
Total Retained Earnings 2,110,000

4. Note payable-Non current 1,620,000

5. Cash 600,000
Accounts Receivable-net 3,500,000
Cost in excess of billing on long term 1,600,000
contracts
Prepaid taxes -
Total current assets 5,700,000

6. Unadjusted net assets 875,000

Treasury Shares (24,000)
Adjusted net assets 851,000