Problem 01: Identify if the following cash and cash equivalents are

current or non-current: Problem 05: P Company provided the following information on

1)​ Cash in Checking Account December 31, 2025:
2)​ 3-Month Treasury Bill On December 31, 2025, what amount should be reported as current
3)​ Petty Cash Fund assets?
4)​ Money Market Fund
5)​ Savings Account with a Withdrawal Restriction for 18
Months
6)​ Cash Set Aside for a Debt Payment Next Month
7)​ Sinking Fund Account for Bond Redemption in 10 Years
8)​ Cash fund for payment of taxes
9)​ Cash fund for acquisition of Land in 2 years
10)​ Cash fund for acquisition of Equipment to be purchased a.​ 6,000,000
next month b.​ 8,000,000
c.​ 6,800,000
Problem 02: Identify if the following financial instruments are d.​ 4,800,000
classified as FVPL, FVOCI or AC –
1)​ Investment in bonds held for trading Problem 06: A Corp. provided the following information on
2)​ Shares of stock held for dividends December 31, 2025:
3)​ Bonds held until maturity
4)​ Shares to be sold in the stock exchange
5)​ Bonds held for interest and to be disposed before
maturity

Problem 03: Identify if the following financial instruments is current

or non-current:
1)​ Investment in equity classified as FVOCI
2)​ Investment in bonds at FVPL
3)​ Bonds carried at amortized cost maturing in 6 months
4)​ Equity instruments treated as FVPL
5)​ Bonds at amortized cost collectible in 3 years
6)​ Interest receivable from bonds
7)​ Dividends receivable from shares

Problem 04: Identify if the following financial instruments is current

or non-current:
1)​ Sold merchandise on credit to customer, payable within
60 days.
2)​ Sold a piece of equipment for P400,000 payable after 2
years.
3)​ Advanced a P500,000 loan to a manager. The loan is due
Prepare the asset portion of the balance sheet with proper line
in 3 years.
items
4)​ Accrued P30,000 in interest on a note maturing in 4
years.
5)​ Sold inventory for P100,000 payable in installments every Problem 01: Identify if the following is a trade or other payables and

year for 5 years. if it is current or non-current.

 1)​ Payables from purchase of inventory this loan into a new 3-year facility. The refinancing agreement is
2)​ Payables from the purchase of equipment signed on January 31, 2025.
3)​ Note payable due in 2 years Case #3
4)​ Note payable from purchase of inventory Company B’s bank loan is due in 6 months. The bank and Company
5)​ Bonds payable B sign a new agreement on December 29, 2024, extending the
6)​ Interest payable maturity date of the loan for an additional 2 years.
7)​ Tax payable Case #4
Company C has a 5-year loan with a due date in 2 years. However,
Problem 02: In the following scenarios, measure the liability to be the loan has financial covenants that must be met quarterly. On
recognized. December 31, 2024, Company C determined it breached one of the
Case #1 key financial ratio covenants.
X commenced a lawsuit against D for alleged violation of copyright Case #5
laws seeking damages of P2,000,000. D denies the allegations, and Company G has a long-term loan that matures in 2 months. The
as of December 31, it is not likely that D will pay any damages loan contract provides an option to renew for 3 more years, but the
because of the lawsuit. lender has sole discretion to approve the renewal.
State the accounting treatment of X and D respectively.
Case #2
G became involved in a lawsuit. As a result of this litigation, it is Problem 04: Prepare the journal entry for the following bonds:
more likely than not that G will pay an amount ranging from 1.​ Issued 8% bonds with a face value of P50,000 for
P700,000 to P1,000,000 but P800,000 is considered to be the P60,000.
best estimate of the obligation. 2.​ Issued P150,000 bonds at 98.
State the accounting treatment of G. 3.​ Issued 50 bonds with par value of P2,000 each. The
Case #3 present value of the bond issue is P105,000.
In May 2025, E Company became involved in litigation. IN December Problem 05: G Corp reported the following liability accounts on
2025, the court ruled E Company liable for P1,600,000 in damages. December 31, 2025:
The entity appealed the amount and E Company’s attorneys
believed that it is probable that the amount can be reduced by
50%.
State the accounting treatment of E.
Case #4
T Corp. owns a car dealership that grants warranty to its cars. It is
expected that 60% of all cars sold in a year have zero defects, 25%
On December 31, 2025, what amount should be reported as current
have minor defects, and 15% will have major defects.
liabilities?
The cost of fixing the defects are P10,000 for minor and P30,000
a.7,100,000
for major.
b.4,300,000
The entity sold 500 cars during the year.
c.3,900,000
D.3,300,000
Problem 03: As of December 31, 2024, identify if the liability is
current or non-current.
Case #1 Problem 01: Identify if the item is part of COGS, selling, admin, or

On December 31, 2024, An entity has a note payable due on line item.

October 31, 2025. The note was refinanced with a 5-year loan. 1.​ Supplies expense

Case #2 2.​ Legal expense

Company A’s short-term bank loan is due in April 2025. 3.​ Utilities expense – store

Management is in advanced discussions with the bank to refinance 4.​ Depreciation – office equipment
5.​ Commission expense
 6.​ Marketing expense 2.​ A company buys a vehicle for P40,000 with an estimated
7.​ Salaries expense – sales clerk salvage value of P10,000 and useful life of 5 years. The
8.​ Freight-in vehicle is put into service on July 1 of the current year.
9.​ Freight-out 3.​ A company purchased an asset for P120,000. It has a
10.​ Interest Income salvage value of P20,000. After 4 years of depreciation,
11.​ Interest Expense the asset’s book value is observed to be P80,000.
12.​ Unrealized gain/loss on financial instruments 4.​ A company purchases an asset for P90,000 and expects
13.​ Depreciation on investment property it to be depreciated over an estimated 12‑year useful life.
14.​ Gain on sale of land After 6 years, the accumulated depreciation recorded is
15.​ Loss from discontinued P42,000. Compute for the salvage value.

Problem 02: Calculate the net sales in each scenario: Problem 05: Calculate the annual depreciation expense in each
1.​ Customers bought a line of products with a total price of of the following scenario:
P10,000 and a trade discount of 5%, 10%. The customer 1.​ A company purchased equipment for P50,000. The
paid in cash. equipment is sold after 4 full years for P35,000 when its
2.​ A company sold merchandise to a customer for P25,000 carrying value was P20,000
and offered a trade discount of 15%. The terms are 3/10, 2.​ A business acquired a machine for P120,000. The
n/20. The sale is on account. The customer pays after 15 machine’s salvage value is estimated at P20,000 and its
days. useful life is 8 years. The machine is sold after 5 years for
3.​ A business sells merchandise with a list price of P4,000 P60,000.
and offers a trade discount of 10%. The credit terms are 3.​ A company invests in a piece of machinery for P100,000,
5/10, n/20. The customer pays after 8 days. with an expected salvage value of P10,000 and a useful
4.​ A company sells merchandise with a list price of P50,000, life of 10 years. The machine is sold after 3 years and 6
offering a trade discount of 25%. The credit terms are months for P75,000.
2/15, n/30. The customer pays within 7 days but returns
merchandise worth P5,000. Problem 06: Calculate the bad debts expense in each of the
following scenario:
Problem 03: A merchandise business operating under a periodic 1.​ Company A had P500,000 in credit sales during the year.
inventory system has the following data for the period: The firm estimates that 2% of its credit sales will be
uncollectible. At the beginning of the year, the allowance
Beginning inventory P25,000 for bad debts has a balance of P1,000
Merchandise purchases 50,000 2.​ Company C has an ending accounts receivable balance of
Freight-in charges 3,000 P300,000. The company estimates that 5% of its
Purchase discounts 2,000 receivables will not be collectible. At year-end, the
Purchase returns 1,000 Allowance for Doubtful Accounts has a credit balance of
Ending inventory 20,000 P10,000.
​ 3.​ Company E uses an aging schedule. At year-end, the
Determine the cost of goods sold (COGS). accounts receivable are categorized as follows:
●​ Current Receivables: P150,000 (estimated
Problem 04: Calculate the annual depreciation expense in each uncollectible at 3%)
of the following scenario: ●​ 1–60 Days Past Due: P50,000 (estimated
uncollectible at 10%)
1.​ A company acquires a vehicle for P40,000. The vehicle is ●​ Receivables Over 60 Days Past Due: P20,000
estimated to have a useful life of 5 years and a salvage (estimated uncollectible at 40%)
value of P10,000. The existing balance in the Allowance for Doubtful
Accounts is a P8,000 credit.
 2.​ Entity declares dividends on the preference shares and
Problem 07: P500,000 dividends on ordinary shares.
X Corp. owns 10,000 shares in P Corp. On November 1, 2025, P Corp. 3.​ Preference shares are cumulative, and the entity declares
declared cash dividends of P5 per share for the shareholders on dividends on the preference shares and P500,000
record as of December 1, 2025. The dividends will be distributed on dividends on ordinary shares.
January 15, 2026. 4.​ Preference shares are cumulative, and the entity did not
declare dividends.
Prepare the journal entries.
Problem 04: For the year, Dunn Company had 200,000 ordinary
shares with P20 par value and 20,000 shares of P100 par, 6%
Problem 01: At the beginning of the year, C Company had 250,000
cumulative, convertible preference share capital outstanding.
outstanding shares. Share transactions for the year are as follows:

Each preference share is convertible into 5 ordinary shares. The net

income for the year was P900,000 before tax.
1.​ Compute for the BEPS
2.​ Compute for the DEPS

Problem 05: At the beginning of the year, an entity has 100,000

outstanding ordinary shares. In addition, the following transactions
has occurred:

Compute for the weighted average shares to be used for basic EPS March 1 - Issued 15,000 5% convertible preference shares with P10

calculation. par.
October 31 -​ 2,000 preference shares were converted into

Problem 02: The following transactions affected shareholder’s ordinary shares

equity for K Company for the year 2025: Each convertible preference share can be exchanged for 3 ordinary
shares each. If net income was P2,500,000 and dividends were
declared, compute for BEPS and DEPS.
Problem 06: On April 1, 2024, River Company issued P2,000,000
12% bonds at face amount. Each P1,000 bond is convertible into 10
ordinary shares.

The entity reported net income of P2,745,000 for the year ended

Compute for the weighted average shares to be used for basic EPS December 31, 2024. The average number of ordinary shares

calculation. outstanding was 100,000 shares and the income tax rate is 25%.
Compute for the BEPS and DEPS.

Problem 03: For the year, an entity reported net income of

P3,200,000. The entity’s outstanding shares composed of the Problem 07: On January 1, 2025, S Company provided the following

following: information:

●​ 200,000 ordinary shares with par value of P100 each.

●​ 50,000 8% preference shares with par value of P200
On April 1, 2025, bonds with a face amount of P3,000,000 were
each.
converted into ordinary shares. The net income for 2024 was
P2,320,000 and the income tax rate is 25%.
Under the following independent scenarios, compute for the BEPS.
1.​ Entity does not declare dividends on the preference
Compute for the BEPS and DEPS.
shares.
Problem 08: On January 2, 2026, Z Corp. issued at par P1,000,000
of 4% bonds convertible into 20,000 ordinary shares. No bonds
were converted during the year. Throughout the year, Worley had
50,000 ordinary shares outstanding. Z Corp’s net income was
P3,000,000 and income tax rate is 25%.

Problem 09: During the year, XYZ Inc. had a net income of
P2,000,000 and 150,000 ordinary shares and 25,000 of P100 par,
2% preference shares outstanding. Richards declared and paid P10
per share to ordinary shares and the annual dividends to preference
shares. The preference shares are convertible into ordinary on a
share-for-share basis.

Problem 10: On December 31, 2025, Hindi Company had 900,000

ordinary shares outstanding. On September 1, 2025, Hindi issued
450,000 ordinary shares. In addition, Hindi had P20,000,000 of 8%
convertible bonds outstanding on December 31, 2024, that are
convertible into 200,000 ordinary shares. One-half of the bonds
were converted into shares on September 30, 2025. Net income
was P7,800,000. The income tax rate is 25%.

Compute for the following:

1.​ net cash provided by operating activities
2.​ net cash used in investing activities
3.​ net cash provided by financing activities
4.​ net change in cash and cash equivalent
]