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Problem 3

The ledger of ABC Co. as of December 31, 20x1 includes total assets of P400,000 and total liabilities of P190,000. Current assets include cash of P23,000, accounts receivable of P56,000, inventory of P40,000, and other current assets of P85,000. Current liabilities include accounts payable of P40,000, accrued expenses of P13,000, notes payable of P15,000, bonds payable of P100,000, and other current liabilities of P24,500. The working capital of ABC Co. as of December 31, 20x1 is P11,500.

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202 views

Problem 3

The ledger of ABC Co. as of December 31, 20x1 includes total assets of P400,000 and total liabilities of P190,000. Current assets include cash of P23,000, accounts receivable of P56,000, inventory of P40,000, and other current assets of P85,000. Current liabilities include accounts payable of P40,000, accrued expenses of P13,000, notes payable of P15,000, bonds payable of P100,000, and other current liabilities of P24,500. The working capital of ABC Co. as of December 31, 20x1 is P11,500.

Uploaded by

Rio De Leon
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Problem 3

The ledger of ABC Co. as of December 31, 20x1 includes the following:

Assets
Petty cash fund
Cash in bank - Banco de Oro
cash in Bank - Metrobank
Accounts Receivable (including P 15,000 pledged accounts)
Accounts Receivable - assigned
Equity in assigned receivable
Notes receivable (including P 20,000 notes receivable discounted)
Notes receivable discounted
Advances to subsidiary
Held for trading securities
Inventory
Deferred charges
Cash surrender value
Bond sinking fund
Total Assets

Liabilities
Accounts payable
estimated warranty liability
Loans payable related to assigned receivables (due in 12 months)
Accrued expenses
Bonds payable (due on December 31, 20x2)
Premium on bonds payable
Total Liabilities

Additional information:
1. Petty cash fund includes IOU's from employees amounting to P 2,000. The remaining
balance of P 5,000 represents bills and coins.

2. Cash in bank - Banco de Oro represents the balance per bank statement. As of December
31, 20x1 deposits in transit amounted to P 10,000 while outstanding checks amounted to
P 3,000. Included in the bank statement as of December 31, 20x1 is an NSF check amounting
to P 8,000.

3. Cash in bank - Metrobank represents the balance per ledger. As of December 31, 20x1,
deposits in transit amounted to P 2,000 while outstanding checks amounted to P 1,000.

4. Accounts receivable (unassigned) includes uncollectible past due accounts of P 4,000 which
need to be written-off.
5. Also included in accounts receivable (unassigned) is a P 5,000 receivable from a customer
which was given a special term. Under the special credit term, the customer shall pay the
P 5,000 receivable in equal quarterly installment of P 625. The last payment is due on
December 31, 20x3.

6. The held for trading securities include the reacquisition cost of ABC Co.'s shares amounting
to P 4,000.

7. Inventory includes P 30,000 goods in transit purchased FOB destination but excludes
P 12,000 goods in transit purcahsed FOB Shipping point.

Required: Compute for the working capital.

Petty cash fund


Cash in bank Banco de oro
Cash in bank Metrobank
Total cash
Account Receivable
Account receivable assigned
Account receivable
Notes receivable (including P 20,000 notes receivable discounted)
Notes receivable discounted
Notes receivable
Inventory
Held for trading securities
Account payable
estimated warranty liability
Loan payable
accrued expense
Bonds payable
Premium on bonds payable
Interest payable

Current assets
Current liabilities
Total working capital
7,000.00
15,000.00
5,000.00
35,000.00
25,000.00
10,000.00
45,000.00
20,000.00
32,000.00
20,000.00
62,000.00
18,000.00
6,000.00
100,000.00
400,000.00

40,000.00
14,000.00
15,000.00
13,000.00
100,000.00
8,000.00
190,000.00

,000. The remaining

tement. As of December
g checks amounted to
an NSF check amounting

of December 31, 20x1,


mounted to P 1,000.

accounts of P 4,000 which


eivable from a customer
ustomer shall pay the
payment is due on

BC Co.'s shares amounting

nation but excludes

5,000.00
14,000.00
4,000.00
23,000.00
31,000.00
25,000.00
56,000.00
45,000.00
20,000.00
65,000.00
44,000.00
16,000.00
40,000.00
14,000.00
15,000.00
13,000.00
100,000.00
8,000.00
2,500.00

204,000.00
192,500.00
11,500.00

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