Question 1. The following items were identified to comprise CHI company's liabilities as of December 31, 2016

Accounts payableP500,000

6% notes payable - due January 15, 2017750,000

7% notes payable - due January 31, 20171,200,000

8% notes payable - due January 31, 20171,500,000

The following information was made available at the time the 2016 financial statements were being prepared:

• The accounts payable balance included a P150,000 advance from the company's president which is due on June 30, 2018
• The board of decided unanimously that it would refinance its 6% notes from bulls lending company.
• On December 31, 2016. CHI Company completed an agreement with bears financing company to refinance its existing note 7% with another one maturing on January 31, 2018.
• At January 2, 2017 CHI company completed an agreement with cubs financing company rescheduling the maturity date of the 8% notes to January 31, 2018.

Compute for:

1. Current Liabilities
2. Non- Current Liabilities

1. Question 2. The following schedule of NY company's outstanding liabilities as of December 31, 2016 provided as follows:

Accounts payables and accrualsP900,000

6% notes payables - due February 1, 20181,000,000

8% loan payable - due February 15, 20181,500,000

10% loan payable - due march 1, 20182,000,000

The following information was provided at the time the 2016 financial statements were being prepared:

• The 6% note includes a clause that allows NY Company to reschedule the note's maturity date for a maximum period of 2 years from the date of maturity.
• The 8% loan includes a stipulation that NY company's debt to equity ratio should not be higher than 0.40 at all times, otherwise the entire loan would be demandable immediately. At December 1, 2016, NY Company's debt to equity was 0.45. Management intends to seek a waiver from Yankees finance company with an assurance that it will reduce its debt to equity ratio below 0.40 by January 8, 2017 and that it will not let it to go beyond 0.40 during the duration of the loan. On January 10, 2017, Yankees finance company canceled its demand for payments after NY Company successfully reduces its debt to equity ratio to 0.33.
• The 10% loan includes a clause that NY Company must maintain a shop within a 5-block radius from Celtics rural bank; otherwise, the bank will terminate the loan and have it demandable. The loan agreement likewise provided a period of 15-months for NY Company to set up a new shop from the time it closes its original one before the bank will issue a demand letter for the loan. On October 30, 2016, in accordance with the municipal order, NY Company sold its shop to allow the construction of a road. At present, NY Company is still scouting for a new location.

The amount to be presented as current and non-current liabilities in NY Company's December 31, 2016 balance sheet is:

Compute for:

1. Current Liabilities
2. Non- Current Liabilities
3. Question 3. On December 31, 2016, the bookkeeper of Chicago company provided the following information

Accounts payable, includes advances from customers of P250,000650,000

Share dividends payable200,000

Customer credit balances110,000

Serial bonds, payable in semi-annual installment of P350,0003,500,000

In the December 31, 2016 statement of financial position, how much should be reported as current liabilities?

Answer:

Question 4. Cavs Company places one (1) coupon in each box. Five (5) coupons are redeemable for a hand puppet. In 2016, Cavs Company purchases 170,000 puppets at P8 and sells 1,400,000 boxes of "King Puffs" at P50 a box. Based from its experience, Cavs Company estimate that 60% of the coupons will be mailed back for redemption and will cost P4.

In 2016,420,000 coupons were presented for redemption of which 50,000 coupons remains under processing at December 31, 2016

Compute for:

1. Premiums expense reported in 2016
2. The estimated liability reported in the 2016 income statement is