8 Abam Corporation is selling audio and video appliances. The company's fiscal year ends on March 31. The following information relates the obligations of the company as of March 31, 2007. Notes payable Abam has signed several long-term notes with financial institutions. The maturities of these notes are given below. The total unpaid interest for all of these notes amount to P340,000 on March 31, 2007. Due date April 31, 2007 July 31, 2007 September 1, 2007 February 1, 2008 Amount P 600,000 900,000 450,000 450,000 2,700,000 April 1, 2008- March 31, 2011 Estimated warranties: P5,100,000 Abam has one year product warranty on some selected items. The estimated warranty liability on sales made during the 2005-2006 fiscal year and still outstanding as of March 31, 2006, amounted to P252,000. The warranty costs on sales made from April 1, 2006 to March 31, 2007 are estimated at P630,000. The actual warranty costs incurred during 2006-2007 fiscal year as follows: Warranty claims honored on 2005-2006 Warranty claims honored on 2006-2007 sales Total Trade payables P252,000 285,000 P537,000 Accounts payable for supplies, goods and services purchases on open account amount to P560,000 as of March 31, 2007. Dividends On march 10, 2007, Abam's board of directors declared a cash dividend of P0.30 per common share and a 10% common stock dividend. Both dividends were to be distributed on Aptil 5, 2007 to common stockholders on record at the close of business on March 31, 2007. As of March 31, 2007, Abams has 5 million, P2 par value common stock shares issued and outstanding. Bonds payable Abams issued P5,000,000, 12% bonds, on October 1, 2001 at 96. The bonds will mature on October 1, 2011. Interest is paid semi-annually on October 1 and April 1. Abams uses straight line method to amortize bond discount. Based on the forgoing information, determine the adjusted balances of the following as of March 31, 2007: Questions 1. Estimated warranty payable 8 200 300 a. P252,000 2. Unamortized bond discount b. P345,000 c. P630,000 d. P882,000 a. P110,000 b. P200,000 C. P100,000 d. P90,000 3. Bond interest payable a. PO b. P300,000 C. P150,000 d. P250,000 4. Total current liabilities a. P6,445,000 b. P5,105,000 c. P5,445,000 d. P3,945,000 5. Total noncurrent liabilities a. P7,700,000 b. P7,590,000 c. P7,500,000 d. P7,610,000