Statement of Financial Position

Using the following information, prepare a properly classified Statement of Financial Position
for Graduation Company as at December 31, 20X1 under:
a. Identify the CA, NCA, CL, NCL and OE
b. Do the statement format to each account
c. Report form
d. Account form

Accruals and other current liabilities 125,890

Bonds payable 5,000,000
Cash and cash equivalents 2,500,000
Current income tax payable 589,660
Intangible assets, net 2,654,700
Investment in associate 1,890,600
Investment in equity securities 3,650,400
Investment property 1,968,740
Long-term notes payable 2,000,000
Merchandise inventory 2,789,000
Office and store supplies 400,000
Other noncurrent assets 600,000
Other noncurrent liabilities 750,000
Owner's Equity 18,211,250
Prepayments and other current assets 385,000
Property, plant, and equipment, net 9,856,250
Short-term notes payable 320,000
Trade and other payables 1,562,890
Trade and other receivables 1,865,000
 CURRENT ASSET Current Liabilities
Cash and cash equivalent 2,500,000 Trade and other payables 1,562,890
Trade and other receivables 1,865,000 Short- term notes payable 320,000
Merchandise inventory 2,789,000 Current income tax payable 589,660
Office and store supplies 400,000 Accrual and other current liabilities 128,890
Prepayment and other current asset 385,000 Total current assets 2,598,440
Total current assets 7,939,000
Noncurrent assets Non current asset
Property, land and equipment net 9,856,250 Bonds payable 5,000,000
Intangible Asset, net 2,654,700 Long term Notes payable 2,000,000
Investment in equities securities 3,650,400 Other noncurrent liabilities 750,000
Investment in associate 1,890,600 Total non-current liabilities 7,750,000
Investment property 1,968,740 Total Liabilities 10,348,440
Other accumulated asset 600,000
Total noncurrent assets 20,620,690 Equity
TOTAL ASSETS 28,559,690 Owner’s equity 18,211.250

Total Liabilities and Equity 28,559,690

REPORT FORM
Graduation Company
Statement of Financial Position
As at December 31. 20XX
ASSETS
CURRENT ASSET
Cash and cash equivalent 2,500,000
Trade and other receivables 1,865,000
Merchandise inventory 2,789,000
Office and store supplies 400,000
Prepayment and other current asset 385,000
Total current assets 7,939,000
Noncurrent assets
Property, land and equipment net 9,856,250
Intangible Asset, net 2,654,700
Investment in equities securities 3,650,400
Investment in associate 1,890,600
Investment property 1,968,740
Other accumulated asset 600,000
Total noncurrent assets 20,620,690
TOTAL ASSETS 28,559,690
LIABILITIES AND EQUITY
Current Liabilities
Trade and other payables 1,562,890
Short- term notes payable 320,000
Current income tax payable 589,660
Accrual and other current liabilities 128,890
Total current assets 2,598,440

Non current asset

Bonds payable 5,000,000
Long term Notes payable 2,000,000
Other noncurrent liabilities 750,000
Total non-current liabilities 7,750,000
Total Liabilities 10,348,440

Equity
Owner’s equity 18,211.250
 Total Liabilities and Equity 28,559,690

Account Form

Graduation Company
Statement of Financial Position
As at December 31. 20XX

ASSETS LIABILITIES AND EQUITY

CURRENT ASSET Current Liabilities
Cash and cash equivalent 2,500,000 Trade and other payables 1,562,890
Trade and other receivables 1,865,000 Short- term notes payable 320,000
Merchandise inventory 2,789,000 Current income tax payable 589,660
Office and store supplies 400,000 Accrual and other current liabilities 128,890
Prepayment and other current asset 385,000 Total current assets 2,598,440
Total current assets 7,939,000
Noncurrent assets Non current asset
Property, land and equipment net 9,856,250 Bonds payable 5,000,000
Intangible Asset, net 2,654,700 Long term Notes payable 2,000,000
Investment in equities securities 3,650,400 Other noncurrent liabilities 750,000
Investment in associate 1,890,600 Total non-current liabilities 7,750,000
Investment property 1,968,740 Total Liabilities 10,348,440
Other accumulated asset 600,000
Total noncurrent assets 20,620,690 Equity
TOTAL ASSETS 28,559,690 Owner’s equity 18,211.250

Total Liabilities and Equity 28,559,690

Now Lets try some Multiple choice problem regarding the accounting equation and the statement of
financial position
Evaluation
1. Gissele company has current assets of P 4,350,000 and total liabilities of P2890,000. If capital is
P8,000,000, how much is the entity’s non current assets?
a. 6,540,000 b.9,430,000 c. 10,890,000 d. insufficient information
Solution
Current Assets 4,350,000
Noncurrent assets ?
Total Liabilities 2,890,000
Equity 8,000,000

2. An entity has the following account balance at December 31: cash P890,000; trade receivables,
P450,000, trade payables, P300,000; land improvements, P700,000; shorterm notes payable,
P100,000; investment in associate, P1,250,000; bonds payable, P6,000,000. If the entity
maintains P400,000 worth of inventories at the end of every year, How much is the entity’s
current assets?
a. P1,340,000 b. P1,740,000 c.P2,440,000 d. P2,540,000
Solution: cash P890,000
trade receivables , P450,000
Inventories P 400,000
Total current assets 1,740,000
1. It is the most liquid and always comes first in the list among assets.
a. Accounts Receivable b. Land c. Cash d. Supplies
2. The debt comes from the purchase of goods or services on account.
a. Accounts Payable b. Notes Payable c. Mortgage d. Supplies
3. A long-term debt of a business with collateral in the form of real properties.
a. Bad Debts b. Mortgage Payable c. Accumulated Depreciation d. Bonds Payable
4. It is a structure, an office, a store or a factory used by the business to conduct its operations.
a. Building b. Land c. Trademarks d. Merchandise inventory
5. It is an account bearing the name of the owner and shows the amount of original and additional
investments made by the owner.
a. Trademarks b. Cash c. Capital d. Income Summary
6. This statement includes the amounts of the company’s total assets, liabilities, and owner’s equity which in
totality provides the condition of the company on a specific date.
a. Income Statement
b. Statement of Financial Position
c. Cash Flow Statement
d. Statement of Comprehensive Income
7. This statement also known as the balance sheet.
a. Trial Balance
b. General Journal
c. Statement of Financial Position
d. Income Statement
8. It refer to resources owned and controlled by the entity as a result of past transactions and events, from
which future economic benefits are expected to flow to the entity.
a. liabilities b. equity c. income d. assets
9. It is also known as net assets or equity, capital refers to what is left to the owners after all liabilities are
settled.
a. assets b. liabilities c. equity d. expenses
10. These are economic obligations or payables of the business. Company assets come from 2 major
sources, borrowings from lenders or creditors, and contributions by the owners. The first refers to liabilities;
the second to capital.
a. equity b. assets c. income d. liabilities