Question
The current sections of the unadjusted balance sheet of Camarines Sur Company on December 31, 2006 were as follows: CURRENT ASSETS CURRENT LIABILITIES Cash 2,000,000
The current sections of the unadjusted balance sheet of Camarines Sur Company on December 31, 2006 were as follows:
CURRENT ASSETS CURRENT LIABILITIES
Cash 2,000,000 Trade accounts payable, net of a debit balance of P50,000 2,450,000
Accounts receivable 3,000,000 Interest payable 150,000
Merchandise inventory 1,900,000 Income tax payable 300,000
Deferred charges 100,000 Money claims of the union, pending final decision 500,000
Mortgage payable, due in four annual installments 2,000,000
Total current assets 7,000,000 Total current liabilities 5,400,000
A review of the accounts showed that the cash balance of P2,000,000 included a customer's check amounting to P100,000 returned by the bank marked NSF, an employee's IOU of P50,000, and the amount of P200,000 deposited with the court for a case under litigation. The cash in bank portion of P1,650,000 is the balance per bank statement. On December 31, 2006, outstanding checks amounted to P250,000.
Accounts receivable balance of P3,000,000 is composed of:
Customers' debit balances 1,600,000
Advances to subsidiary 400,000
Advances to suppliers 200,000
Receivables from officers 300,000
Allowances for doubtful accounts (100,000)
Selling price of merchandise invoiced at 120% of cost,
not yet delivered and excluded from ending inventory 600,000
3,000,000
The correct total of current assets on December 31, 2006 should be
a. 5,950,000 b. 6,000,000 c. 5,450,000 d. 5,500,000
The correct total of current liabilities on December 31, 2006 should be
a. 3,450,000 b. 3,400,000 c. 3,950,000 d. 3,700,000
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