Module 4 Statement of Financial Position

13. Joshtine Company had the following liabilities at December 31, 2021:

Account payable

550,000

Unsecured note, 8%, due July 1, 2022

4,000,000

Accrued expenses

350,000

Contingent liability

450,000

Deferred tax liability

250,000

Senior bonds, 7%, due March 31, 2022

5,000,000

The contingent liability is an accrual for possible loss on a P1,000,000 lawsuit filed against Joshtine. Joshtine's legal council expects the suit to be settled in 2022 and has estimated that Joshtine will be liable for damages in the amount of 450,000

The deferred tax liability is not related to an asset for financial reporting and is expected to reverse in 2022

What amount should Joshtine report in its December 31, 2021 balance sheet for current liabilities?

a. 10,350,000

b. 10,150,000

c. 9,900,000

d. 4,900,000

14. Tricia Company provided the following data at year-end:

Accounts payable, including cost of goods

Received on consignment of P150,000 1,350,000

Accrued taxes payable 125,000

Customers's deposit 100,000

Manila Company as guarantor 200,000

Bank overdraft 55,000

Accrued electric and power bills 60,000

Reserve for contingencies 150,000

What total amount should be reported as current liabilities?

a. 1,840,000

b. 1,740,000

c. 1,650,000

d. 1,540,000

15. The following information pertains to Kaila Company on December 31 of the current year:

Property, plant and equipment

35,000,000

Accounts receivable

20,000,000

Prepaid insurance

2,500,000

Short-term note payable

3,000,000

Cash

5,000,000

Bonds payable

40,000,000

Total assets

101,500,000

Land

20,000,000

Accounts payable

8,000,000

Allowance for doubtful accounts

1,000,000

Merchandise inventory

13,000,000

Available for sale securities - to be held indefinitely

7,000,000

Wages payable

2,000,000

Total liabilities

56,000,000

Premium on bonds payable

3,000,000

The December 31 working capital is

a. 46,500,000

b. 33,500,000

c. 26,500,000

d. 35,500,000

16. Rosalie Corporation is located in London but does business throughout Europe.The company builds and sells equipment used in manufacturing pharmaceuticals.On December 31, 2021, Rosalie has trading securities valued at 42,000; goodwill valued at 300,000; prepaid insurance valued at 24,000; patents valued at 140,000; and a customer list valued at 260,000.On Rosalie Corporation's statement of financial position at December 31, 2021, what amount should be reported as intangible assets?

a. 742,000

b. 766,000

c. 700,000

d. 440,000

17. The accounts and balances shown below were taken from Kaila Company's trial balance on December 31, 2021. All adjusting entries have been made.

Wages Payable, P250,000; Cash, P175,000; Bonds Payable, P600,000; Dividends Payable, P140,000; Prepaid rent, P136,000; Inventory, P820,000; Sinking Fund Assets, P525,000; Trading securities, P153,000; Premium on Bonds Payable, P48,000; Stock Investment in Subsidiary, P1,020,000; Taxes Payable, P228,000; Accounts Payable, P248,000; Accounts Receivable, P366,000; Property Plant & Equipment, P1,200,000; Patents- net, P150,000; Accumulated Depreciation-PPE, P400,000; Land held for future business site, P900,000.

How much should be reported in Kaila's December 31, 2021 balance sheet as current and non-current assets, respectively?

a. 1,650,000 and 2,375,000

b. 1,650,000 and 3,395,000

c. 1,800,000 and 2,225,000

d. 1,800,000 and 3,795,000

18. Jostin Company's adjusted trial balance at December 31, 2021 includes the following accounts balances:

Ordinary share capital, P3 par P3,000,000

Subscription Receivable due 2022 300,000

Share premium 4,000,000

Treasury shares, at cost 250,000

Net unrealized loss on available for sale securities 100,000

Reserve for uninsured earthquake losses 750,000

Accumulated profits 1,000,000

Ordinary shares subscribed 500,000

Reserve for treasury share 250,000

What amount should Jostin report as total owners' equity in its December 31, 2021 balance sheet?

a. 8,400,000

b. 8,900,000

c. 9,150,000

d. 9,200,000

19. Facundo Corporation's post-closing trial balance at December 31, 2021 was as follows:

Facundo Corporation

Post-Closing Trial Balance

December 31, 2021

Debit

Credit

Accounts payable

P495,000

Accounts receivable

P963,000

Reserve for depreciation

360,000

Reserve for doubtful accounts

54,000

Premium on ordinary shares

1,800,000

Gain on sale of treasury shares

450,000

Bonds payable

720,000

Building and equipment

1,980,000

Cash

396,000

Dividends payable on preference shares

7,200

Ordinary share capital (P1 par value)

270,000

Inventories

1,116,000

Land

684,000

Available-for-sale securities at fair value

513,000

Trading securities at fair value

387,000

Net unrealized loss on available-for-sale securities

45,000

Preference share capital (P50 par value)

900,000

Prepaid expenses

72,000

Donated capital

800,000

Share warrants outstanding

208,000

Retained earnings

415,800

Treasury shares - ordinary, at cost

324,000

Totals

P6,480,000

P6,480,000

At December 31, 2021, Facundo had the following number of ordinary and preference shares:

Ordinary

Preference

Authorized

900,000

90,000

Issued

270,000

18,000

Outstanding

252,000

18,000

The dividends on preference shares are P0.40 cumulative.In addition, the preference share has a preference in liquidation of P50 per share.

Based on the above and the result of your audit, determine the following as of December 31, 2021:

1. Share premium/Additional paid-in capital

a.P3,213,000 c.P3,050,000

b.P3,258,000 d.P2,600,000

2. Total contributed capital

a.P4,428,000 c.P3,770,000

b.P4,220,000 d.P1,170,000

3. Unappropriated retained earnings

a.P415,800 c.P91,800

b.P739,800 d.P37,800

4. Total equity

a.P4,266,800 c.P4,888,800

b.P4,519,800 d.P4,474,800

20. Tricia Industries provided the following balances on December 31, 2021

Accounts payable

1,400,000

Accrued taxes

55,000

Ordinary share capital

7,700,000

Dividends - ordinary share

4,400,000

Dividends - preference share

1,600,000

Mortgage payable (500,000 due in 6 months)

6,000,000

Notes payable, due on January 14, 2023

2,300,000

Preference share capital

3,250,000

Premium on notes payable

125,000

Income summary - credit balance

9,090,000

Retained earnings - January 1

8,080,000

Unamortized issue cost on note payable

65,000

Unearned rent income

35,000

What is the amount of retained earnings for the year ended?

a. 2,080,000

b. 11,170,000

c. 17,170,000

d. 22,120,000