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Reviewer In Statement Of Financial Position

1146 words - 5 pages

CHAPTER 2
STATEMENT OF FINANCIAL POSITION

1. Fran Company provided the following data at year-end:

Trade accounts payable, including cost of goods received
on consignment of P100,000 1,200,000
Accrued taxes payable 100,000
Customers' deposit 100,000
Herrera Company as guarantor 250,000
Bank overdraft 50,000
Accrued electric and power bills 55,000
Reserve for contingencies 180,000

What total amount should be reported as current liabilities?
a. 1,840,000
b. 1,405,000
c. 1,700,000
d. 1,550,000

Answer: B

Solution:
Accounts payable (1,200,000-100,000)
Accrued taxes payable 100,000
Customers' deposit ...view middle of the document...

6,220,000
b. 8,220,000
c. 7,220,000
d. 8,020,000
Answer: A
Solution:
Accounts receivable 1,400,000
Financial assets at fair value through profit or loss 450,000
Cash 1,000,000
Inventory 3,250,000
Prepaid expenses 120,000
Total current asset 6,220,000

4. Fran Company was incorporated on January 1, 2014, with proceeds from the issuance of P8, 500,000 in share capital and borrowed funds of P1,200,000. During the first year, revenue from sales and consulting amounted to P8,240,000, and operating costs and expenses totaled P6,250,000. On December 15, 2014, Fran declared a P350,000 dividend, payable to shareholders on January 15, 2015.

No additional activities affected shareholders' equity in 2014. Fran's liabilities increased to P2,100,000 by December 31, 2014. On December 31, 2014, what amount should be reported as total assets?
a. 12,940,000
b. 12,590,000
c. 13,440,000
d. 12,240,000
Answer: D
Solution:

Liabilities 2,100,000
Share capital 8,500,000
Retained earnings
(8,240,000-6,250,000-350,000) 1,640,000
Total liabilities and shareholders’ equity 12,240,000

5. Gamu-Gamu Company was incorporated on January 1, 2014, with P6,000,000 from the issuance of share capital and borrowed funds of P1,750,000. During the first year, net income was P2,550,000. On December 15,Gamu-Gamu paid a P400,000 cash dividend. No additional activities affected shareholders' equity in 2014. On December 31, 2014 , Gamu-Gamu's liabilities had increased to P1,800,000. On December 31, 2014, what amount should be reported as total assets?
a. 9,550,000
b. 9,950,000
c. 11,700,000
d. 10,050,000
Answer: B
Solution:

Liabilities 1,800,000
Share capital 6,000,000
Retained earnings
(2,550,000-400,000) 2,150,000
Total liabilities and shareholders’ equity 9,950,000

6. The trial balance of Cookies Company included the following account balances on December 31, 2014:

Accounts payable 1,000,000
Bonds payable, due 2015 2,300,000
Discount on bonds payable 280,000
Note payable, due 2016 1,800,000
Dividend payable 750,000

What is the correct amount of current liabilities?
a. 3,770,000
b. 5,570,000
c. 4,050,000
d. 3,020,000

Answer: A

Solution:

Accounts payable 1,000,000
Bonds payable, due 2015 2,300,000
Discount on bonds payable (280,000)
Dividend payable 750,000
Total current...

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