Financial Statement Analysis

A. C.
B. D.
A. C.
B. D.
A B. C. D.
.
1) Arrrr
• 44
Use the following information for the next two (2) questions:
Presented below is the statement of financial position of Simple Corporation prepared by the chief accountant for the current year,
2020.
Simple Corporation
Statement of Financial Position
December 31, 2020
Current assets P 435,000
Investments 640,000
Property plant, and equipment 1,720,000
Intangible assets 305,000
P3,100,000
Current liabilities P 330,000

Long-term liabilities 1,000,000
Shareholders’ equity 1,770,000
P3,100,000
Consider the following information:
(a) The current assets section includes: cash P100,000, accounts receivable P170,000 less P10,000 for allowance for doubtful
accounts, inventories P180,000, and unearned revenue P5,000. The cash balance is composed of P114,000, less a bank
overdraft of P14,000. Inventories are stated on the lower of FIFO cost or market.
(b) The investments section includes: the cash surrender value of a life insurance contract P40,000; investment in ordinary shares,
short-term (trading) P80,000 and long-term (available-for-sale) P270,000; and bond sinking fund P250,000. The cost and fair
value of investments in ordinary shares are the same.
(c) Property, plant, and equipment includes: buildings P1,040,000 less accumulated depreciation P360,000; equipment P450,000
less accumulated depreciation P180,000; land P500,000; and land held for future use P270,000.
(d) Intangible assets include: a franchise P165,000: goodwill P100,000; and discount on bonds payable P40,000.
(e) Current liabilities include: accounts payable P90,000; notes payable - short term P80,000 and long - term P120,000: and taxes
payable P40,000.
(f) Long - term liabilities are compose solely of 10% bonds payable due 2027.
(g) Shareholders' equity has: preference shares, no par value, authorized 200,000 shares, issued 70,000 shares for P450,000; and
ordinary shares, P1.00 par value, authorized 400,000 shares, issued 100,000 shares at an average price of P10. In addition, the
corporation has retained earnings of P320,000.
Compute the adjusted amount to be reported on the company’s statement of financial position as of December 31, 2020:
1) Current assets
A 548,000 B. 574,000 C. 534,000 D. 588,000
.
2) Current liabilities
A 224,000 B. 229,000 C. 210,000 D. 215,000
.
1) Therry Company is preparing interim financial statements for the first quarter ended March 31.
Expenses in the first quarter totaled P5,000,000 of which 25% was variable
The fixed expenses included property tax for the year of P1,600,000 and depreciation expense P800,000 for the year for an
equipment that was available for use on January 1. What amount should be reported as total expenses for the first quarter ended
March 31?
A 5,000,000 B. 2,600,000 C. 3,800,000 D. 3,200,000
.
• PAGE 1 OF 37•
2) Yasmin Company is completing the preparation of the financial statements for the year ended December 31, 2023. The financial
statements are authorized for issue on March 31, 2024.
On March 15, 2024, a dividend of P1,800,000 was declared and a contractual profit share payment of P400,000 was made, both
based on the profit for the year ended December 31, 2023. On February 1, 2024, a customer went into liquidation having owned
the entity P300,000 for the past 5 months. On March 20, 2024, a manufacturing plant was destroyed by fire resulting in a
financial loss of P2,600,000.
What total amount should be recognized in profit or loss for the year ended December 31, 2023 to reflect adjusting events after
the end of reporting period?
A 1,800,000 B. 2,500,000 C. 2,600,000 D. 700,000
.
Gabrielle Company provided the following information on December 31, 2023:
Cash 500,000
Accounts receivable 800,000
Inventory 1,700,000
Prepaid expenses 250,000
Property, plant and equipment 8,800,000
Accumulated depreciation 800,000
Accounts payable 1,350,000
Accrued expenses 250,000
Bonds payable 3,150,000
Share capital 6,000,000
Retained earnings 500,000
A P600,000 note payable to bank, due on June 30, 2024, was deducted from the balance on deposit n the same bank. Gabrielle
recorded checks of P200,000 in payment of accounts payable on December 31, 2023. These checks were still on hand on January
20, 2024. An advance payment of P150,000 from a customer for goods to be delivered in 2024 was deducted from accounts
receivable. The share capital included redeemable preference shares of P1,000,000 due for redemption on October 31, 2024.
3) What total amount should be reported as current asset on December 31, 2023?
A 3,450,000 B. 3,600,000 C. 4,200,000 D. 4,050,000
.
4) What total amount should be reported as current liabilities on December 31, 2023?
A 2,400,000 B. 3,550,000 C. 3,400,000 D. 2,550,000
.
1) Transcend Company operates two major lines of business namely, candle manufacturing and clothing retailing. On December
31, 2023, in response to an unsolicited offer, Transcend Company disposed of its candle-making operations for P1,000,000
when the carrying amount of the operation’s asset were – factory building, P400,000; machinery, P00,000 and trademark,
P200,000. The candle-making operations has no other assets and has no liability, but as a result of the disposal the company has
an income tax payable of P30,000 related to the gain on disposal. The candle-making has profit before tax of P300,000 for the
year ended December 31, 2023. In the statement of comprehensive income, what single amount should Transcend Company
disclose related to the discontinued operation?
A 280,000 B. 300,000 C. 370,000 D. 400,000
.
2) McGraw Company provided the following account balances on December 31, 2023:
Accounts payable, P125,000; Accrued taxes, P50,000; Cash surrender value of life insurance, P30,000; Ordinary share capital,
P1,000,000; Share dividend payable-ordinary, P150,000; Mortgage payable (P200,000 due in six months), P1,200,000; Notes
payable-20%, due on January 2, 2024, P1,500,000; Share premium-ordinary, P250,000; Preference liability, P450,000;
Accumulated profits-December 31, 2023, P550,000; Unearned rent income, P25,000; Dividends payable-preference liability,
P100,000. How much should McGraw report as Shareholders’ equity on December 31, 2023?
A 1,900,000 B. 1,950,000 C. 2,050,000 D. 2,500,000
.
3) The following accounts are taken from the unadjusted trial balance of Flower Company on December 31, 2023:
Cash, P340,000; Accounts receivable, P850,000; Allowance for bad debts, P8,000; Notes receivable, P360,000; Prepaid rent
expense, P20,000; Trading security investment, P300,000; Merchandise inventory, P600,000; Accounts payable, P500,000;
Notes payable, P700,000;
Additional information:
Cash consists of Cash in Bank per book (outstanding checks, P24,000) 334,000
• PAGE 2 OF 37•
Petty cash including unreplenished petty expense vouchers of P300 1,000
Customer’s postdated check dated 5,000
Total 340,000
Accounts receivable includes selling price of goods sent on consignment at 125% of cost and not included in the inventory,
P250,000 one half of which has been sold by the consignee for which the consignee is entitled to a 12% of the selling price. At
the end of the account period, the consignee has yet to remit the amount due. The note receivable consists of two 120-day 6%
notes both are dated October 1, 2023. The first note with face mount of P160,000 was discounted for which the company has
transferred significant amount of risk and rewards including control on the financial asset; Market value of the trading securities
investment, P280,000; Accounts payable incudes cost of purchases in transit FOB shipping point and not included in the
inventory, P80,000;
What is the correct amount of total current assets?
A 2,321,700 B. 2,324,700 C. 2,327,100 D. 2,477,100
.
4) AJ Corporation’s trial balance contained the following account balances at December 31, 2023:
Equity investment to profit or loss, at cost 150,000
Prepaid insurance 30,000
Cash and cash equivalents 330,000
Inventory, at cost 900,000
Equipment and furniture 990,000
Land (held for capital appreciation) 1,200,000
Asset held for sale (fair value – P400,000) 500,000
Provision for returns and discounts (50,000)
Provisions for depreciation (120,000)
Provision for inventory decline (100,000)
Fair value allowance on equity investment 70,000
How much is the total current assets in AJ’s December 31, 2023 statement of financial position?
A 1,810,000 B. 1,910,000 C. 2,210,000 D. 2,310,000
.
5) Mumay Company trial balance has the following selected accounts:

Cash (includes P100,000 in bond sinking fund for long term bond payable) 500,000
Allowance of uncollectible accounts 50,000
Deposits received from customers 30,000
Merchandise inventory 70,000
Unearned rent 10,000
Investment at fair value to profit or loss 20,000
What amount should Mumay Company report as total current assets in its statement of financial position?
A 640,000 B. 670,000 C. 720,000 D. 740,000
.
1) Beloved Corporation has the following accounts at December 31, 2019:

Cash and cash equivalents including a P500,000 9-month time deposit, P3,000,000; investment in equity at fair value to profit
or loss, P500,000 with a current fair value of P600,000;Trade account receivable after offsetting a P50,000 credit balance in one
of its account receivable subsidiary ledgers, P400,000; Note receivable, P410,000, which the company has completely
transferred the risk and rewards but the proceeds of P90,000 has yet to be received as of December 31, 2019; Merchandise
inventory at cost of P600,000 but with a net realizable value of P560,000 and a prepaid insurance of P600,000 of which
P200,000 will be used up in the next 12 months. How much is the total current assets in Beloved December 31, 2019 statement
of financial position?
A 4,720,000 B. 4,810,000 C. 5,220,000 D. 5,310,000
.
ANSWER: D
Cash and cash equivalents 3,000,000 – 500,000 2,500,000
Investment at FVPL at FV 600,000
Trade and other receivable 400,000 + 50,000 450,000
Note receivable 410,000 + 90,000 500,000
Inventory 560,000
Prepaid asset 200,000
Other current asset, time deposit 500,000
Total current asset 5,310,000
• PAGE 3 OF 37•
Use the following information for the next four (4) questions:
Babes Company provided the following trial balance on December 31, 2020 which has been adjusted except for income tax
expense:
Debit Credit
Cash 5,000,000
Accounts receivables 14,000,000
Inventory 10,000,000
Income tax payable 6,000,000
Ordinary share capital 15,000,000
Share premium 4,000,000
Retained earnings 1/1 8,000,000
Net sales and other revenue 80,000,000
Costs and expenses 60,000,000
Income tax expense 11,000,000 .
125,000,000 125,000,000
1) What amount should be reported as adjusted retained earnings on December 31, 2020?
A 29,000,000 B. 22,000,000 C. 14,000,000 D. 17,000,000
.
2) The correcting entry to adjust income tax includes which of the following?
A. Debit income tax expense P6,000,000 C. Debit income tax payable P6,000,000
B. Credit income tax expense P5,000,000 D. No correction is necessary
3) What amount should be reported as total current liabilities on December 31, 2020?
A 12,000,000 B. 13,000,000 C. 18,000,000 D. 33,000,000
.
4) What amount should be reported as total shareholders’ equity on December 31, 2020?
A 19,000,000 B. 36,000,000 C. 41,000,000 D. 46,000,000
.
• 44
Casio Company reported the following current assets on December 31, 2022:
Cash 5,000,000
Accounts receivable 2,000,000
Inventory, including goods received on consignment P200,000 800,000
Bonds investment at fair value through other comprehensive income 1,000,000
Prepaid expenses, including a deposit of P50,000 made on inventory to be delivered in 18 months 150,000
Total current assets 8,950,000
Cash in general checking account 3,500,000

Cash fund to be used to retire bonds payable in 2024 1,000,000
Cash held to pay value added taxes 500,000
Total cash 5,000,000
1) What is the correct amount of cash balance to be reported as current asset?

A 5,000,000 B. 4,500,000 C. 4,000,000 D. 3,500,000
.
2) What total amount of current assets should be reported on December 31, 2022?
A 6,750,000 B. 6,700,000 C. 7,700,000 D. 7,750,000
.
Babes Company provided the following trial balance on December 31, 2020 which has been adjusted except for income tax
expense:
Debit Credit
Cash 5,000,000
Accounts receivables 14,000,000
Inventory 10,000,000
• PAGE 4 OF 37•
Income tax payable 6,000,000
Ordinary share capital 15,000,000
Retained earnings 1/1 8,000,000
Net sales and other revenue 80,000,000
Costs and expenses 60,000,000
Income tax expense 11,000,000 .
125,000,000 125,000,000
5) What amount should be reported as adjusted retained earnings on December 31, 2020?
A 29,000,000 B. 22,000,000 C. 14,000,000 D. 17,000,000
.
6) The correcting entry to adjust income tax includes which of the following?
A. Debit income tax expense P6,000,000 C. Debit income tax payable P6,000,000
B. Credit income tax expense P5,000,000 D. No correction is necessary
A 12,000,000 B. 13,000,000 C. 18,000,000 D. 33,000,000
.
8) What amount should be reported as total shareholders’ equity on December 31, 2020?
A 19,000,000 B. 36,000,000 C. 41,000,000 D. 46,000,000
.
Quake Company reported the following current assets on December 31, 2022:
Cash 4,500,000
Noes receivable, net of discounted note P500,000 2,000,000
Inventory 4,000,000
Total 18,000,000
An analysis disclosed that accounts receivable comprised the following:

Trade accounts receivable 5,000,000
Allowance for doubtful accounts (500,000)
Selling price of Quake Company’s unsold goods sent to Tar Company on consignment at 150% of cost
and excluded from Quake’s ending inventory 3,000,000
Total 18,000,000
3) What is the net realizable value of accounts receivable?

A 7,500,000 B. 4,500,000 C. 5,000,000 D. 6,500,000
.
4) On December 31, 2022, what amount should be reported as total current assets?
A 17,000,000 B. 17,500,000 C. 15,000,000 D. 16,000,000
.
5) Bane Company reported the following current asset at year-end:

Cash 3,200,000
Inventory 2,800,000
Deferred charges 200,000
The accounts receivable consisted of the following:

Customers’ accounts 1,420,000
Employees’ account-current 240,000
Advances to subsidiary 260,000
Allowance for uncollectible accounts (120,000)
Subscription receivable, not collectible currently 1,200,000
Total accounts receivable 3,000,000
What total amount should be reported as current asset at year-end?

A 8,000,000 B. 9,200,000 C. 7,740,000 D. 7,540,000
.
• PAGE 5 OF 37•
Nastumi Company provided the following data on December 31, 2022:
Cash in bank, net of bank overdraft of P500,000 5,000,000
Petty cash, unreplenished petty cash expenses P10,000 50,000
Notes receivable 4,000,000
Accounts receivable, net of accounts with credit balances of P1,500,000 6,000,000
Inventory 3,000,000
Bond sinking fund 3,000,000
Accounts payable, net of accounts with debit balances of P1,000,000 7,000,000

Notes payable 4,000,000
Bond payable due June 30, 2023 3,000,000
Accrued expenses 2,000,000
Total current liabilities 16,000,000
6) What total amount should be reported as current asset on December 31, 2022?
A 19,040,000 B. 20,040,000 C. 23,540,000 D. 24,040,000
.
7) What total amount should be reported as current liabilities on December 31, 2022?
A 19,000,000 B. 16,000,000 C. 15,500,000 D. 15,000,000
.
On December 31, 2022, Siman Company showed the following current assets:
Cash 3,200,000
Inventory 2,000,000
Deferred tax asset 700,000
Prepaid expense 100,000
Cash on hand, including customer postdated check P50,000 and employee IOU P50,000 500,000
Cash in bank per bank statement, outstanding checks on December 31, 2022, P200,000 2,700,000
Customers’ debit balances, net of customers’ deposit P50,000 1,900,000

Sales price of goods invoiced to customers at 150% of cost on December 29, 2022 but delivered on
January 5, 2023 and excluded from inventory 750,000
8) What is the adjusted cash balance?

A 2,900,000 B. 2,500,000 C. 2,950,000 D. 3,200,000
.
9) What total amount should be reported as current assets on December 31, 2022?
A 6,900,000 B. 7,050,000 C. 7,350,000 D. 7,400,000
.
Use the following information for the next three (3) questions:
The ledger of Kara Company in 2021 includes the following:
January 1, 2021 December 31, 2021
Current assets 240,000 ?
Noncurrent assets 1,600,000 1,700,000
Current liabilities ? 130,000
Noncurrent liabilities 580,000 ?
All assets and liabilities are reported at year-end. Working capital of P90,000 remained unchanged. Net income for the current year
was P60,000. No dividends were declared during the year and there were no other changes in shareholder’s equity.
• PAGE 6 OF 37•
10) What is the amount of current assets on December 31?
A 220,000 B. 130,000 C. 90,000 D. 40,000
.
11) What is the shareholders’ equity on December 31?

A 1,170,000 B. 1,110,000 C. 1,050,000 D. 1,080,000
.
12) What is the amount of noncurrent liabilities on December 31?

A 540,000 B. 480,000 C. 620,000 D. 750,000
.
Use the following information for the next five (5) questions:
Dr. Strangest Company provided the following account balances on December 31, 2022:
Accounts receivable, net of allowance for doubtful accounts P50,000 600,000
Accrued taxes 50,000
Accrue interest receivable 30,000
Authorized share capital, 50,000 shares, P100 par 5,000,000
Building, net of accumulated depreciation of P2,500,000 3,000,000
Cash on hand 50,000
Cash in bank 650,000
Furniture and equipment, net of accumulated depreciation of P900,000 1,500,000
Inventory 1,200,000
Investment property 700,000
Land 1,000,000
Deferred tax liability 650,000
Bonds payable due June 30, 2023 2,000,000
Note payable 850,000
Notes receivable 200,000
Patent 370,000
Other accrued liabilities 150,000
Share premium 300,000
Retained earnings appropriated for contingencies 200,000
Retained earnings 2,700,000
Share subscription receivable 500,000
Subscribed share capital, 2,000 shares 1,000,000
Unissued share capital 2,000,000
1) On December 31, 2022, what total amount should be reported as current assets?
A 4,830,000 B. 2,830,000 C. 2,830,000 D. 2,870,000
.
2) On December 31, 2022, what total amount should be reported as non-current assets?
A 7,870,000 B. 8,570,000 C. 6,570,000 D. 5,870,000
.
3) On December 31, 2022, what total amount should be reported as current liabilities?
A 4,050,000 B. 2,050,000 C. 2,700,000 D. 3,900,000
.
4) On December 31, 2022, what total amount should be reported as non-current liabilities?
A 2,650,000 B. 650,000 C. 1,500,000 D. 0
.
5) On December 31, 2022, what is the total shareholder’s equity?

A 6,700,000 B. 7,700,000 C. 7,200,000 D. 8,700,000
.
CA NCA CL NCL SHE

Accounts receivable, net 600,000
Accrued taxes 50,000
• PAGE 7 OF 37•
Accrue interest receivable 30,000
Authorized share capital, 50,000 shares, P100 par 5,000,000
Building, net 3,000,000
Cash on hand 50,000
Cash in bank 650,000
Furniture and equipment, net 1,500,000
Inventory 1,200,000
Land 1,000,000
Bonds payable due June 30, 2023 2,000,000
Patent 370,000
Other accrued liabilities 150,000
Share subscription receivable (500,000)
Subscribed share capital, 2,000 shares 1,000,000
Unissued share capital (2,000,000)
Total 4,830,000 6,570,000 4,050,000 650,000 6,700,000
Waitz Company provided the following account balances on December 31, 2022:
Share capital............................................................ ............................................................ ...... ...... 5,000,000
Share premium............................................................ ............................................................ ...... 500,000
Retained earnings............................................................ ............................................................ ...... 880,000
Serial bonds payable (P500,000 due every July 1 of each year)............................................................ 2,500,000
Employees income tax payable............................................................ ............................................ 20,000
Note payable............................................................ ............................................................ ...... ...... 100,000
Accrued expense............................................................ ............................................................ ...... 30,000
Accrued interest on note payable............................................................ ......................................... 10,000
Income tax payable............................................................ ............................................................ .... 60,000
Allowance for doubtful accounts............................................................ ............................................ 50,000
Advances from customers............................................................ ..................................................... 100,000
Accounts receivable............................................................ .............................................................. 500,000
Accumulated depreciation – building............................................................ ..................................... 1,600,000
Accumulated depreciation – machinery............................................................ ................................ 1,300,000
Financial assets at amortized cost............................................................ ........................................ 1,500,000
Land............................................................ ............................................................ ....................... 1,500,000
Machinery............................................................ ............................................................ ...... ........ 2,000,000
Factory supplies............................................................ ............................................................ ...... 50,000
Notes receivable............................................................ ............................................................ ...... 150,000
Building............................................................ ............................................................ ............... ...... 4,000,000
Cash............................................................ ............................................................ ...................... 420,000
Claim receivable............................................................ ............................................................ ...... 20,000
Finished goods............................................................ ............................................................ ...... 400,000
Franchise............................................................ ............................................................ ...... ...... ...... 200,000
Goods in process............................................................ ............................................................ ...... 600,000
Prepaid insurance............................................................ ............................................................ ...... 20,000
Raw materials............................................................ ............................................................ ...... ...... 200,000
Financial assets at fair value through profit or loss............................................................ ................ 250,000
Tools............................................................ ............................................................ ....................... 40,000
Goodwill............................................................ ............................................................ ...... ...... ...... 100,000
Plant expansion fund............................................................ ............................................................ 500,000
Accounts payable............................................................ ............................................................ ...... 300,000
A 2,560,000 B. 2,660,000 C. 2,760,000 D. 2,860,000
.
A 6,940,000 B. 12,740,000 C. 6,980,000 D. 6,440,000
.
• PAGE 8 OF 37•
A 1,120,000 B. 1,020,000 C. 720,000 D. 620,000
.
A 2,000,000 B. 500,000 C. 2,500,000 D. 2,100,000
.
• PAGE 9 OF 37•
Allowance for doubtful accounts............................................................ ............................................ (50,000)
Accounts receivable............................................................ .............................................................. 500,000
Factory supplies............................................................ ............................................................ ...... 50,000
Notes receivable............................................................ ............................................................ ...... 150,000
Cash............................................................ ............................................................ ...................... 420,000
Claim receivable............................................................ ............................................................ ...... 20,000
Finished goods............................................................ ............................................................ ...... 400,000
Goods in process............................................................ ............................................................ ...... 600,000
Prepaid insurance............................................................ ............................................................ ...... 20,000
Raw materials............................................................ ............................................................ ...... ...... 200,000
Financial assets at fair value through profit or loss............................................................ ................ 250,000
Accumulated depreciation – building............................................................ ..................................... (1,600,000)

Accumulated depreciation – machinery............................................................ ................................ (1,300,000)
Financial assets at amortized cost............................................................ ........................................ 1,500,000
Land............................................................ ............................................................ ....................... 1,500,000
Machinery............................................................ ............................................................ ...... ........ 2,000,000
Building............................................................ ............................................................ ............... ...... 4,000,000
Franchise............................................................ ............................................................ ...... ...... ...... 200,000
Tools............................................................ ............................................................ ....................... 40,000
Goodwill............................................................ ............................................................ ...... ...... ...... 100,000
Plant expansion fund............................................................ ............................................................ 500,000
Total noncurrent asset 6,940,000
Serial bonds payable – current portion 500,0000

Employees income tax payable............................................................ ............................................ 20,000
Note payable............................................................ ............................................................ ...... ...... 100,000
Accrued expense............................................................ ............................................................ ...... 30,000
Accrued interest on note payable............................................................ ......................................... 10,000
Income tax payable............................................................ ............................................................ .... 60,000
Advances from customers............................................................ ..................................................... 100,000
Accounts payable............................................................ ............................................................ ...... 300,000
Total current liability 1,120,000
Serial bonds payable non current portion 2,500,000 – 500,000 2,000,000
Thanos Company provided the following account balances on December 31, 2022:
Accounts receivable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 400,000
Advances to officers – not currently collectible...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 100,000
Sinking fund...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 400,000
Building...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 5,000,000
Long term refundable deposit...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 50,000
Cash and cash equivalents...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 500,000
Cash surrender value...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 60,000
Equipment...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1,000,000
Lease rights...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 100,000
Accrued interest on notes receivable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 10,000
Inventories...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1,300,000
Land...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... . 1,500,000
Land held for speculation...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 500,000
Notes receivable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... 250,000
Computer software...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 3,250,000
Prepaid expenses...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 70,000
Financial assets held for trading...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... 280,000
Unearned rent income... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... ..... 40,000
Retained earnings (deficit) ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... (1,800,000)
Share premium – preference...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 500,000
Premium on bonds payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1,000,000
Preference share capital...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 2,000,000
Share premium – ordinary...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 200,000
Note payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... 300,000
SSS payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .. 10,000
Accounts payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 400,000
Accrued salaries...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 100,000
Accumulated depreciation – building...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 2,000,000
Accumulated depreciation – equipment...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... 200,000
Allowance for doubtful accounts...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... 20,000
• PAGE 10 OF 37•
Bonds payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 5,000,000
Dividends payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 120,000
Ordinary share capital...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... 5,000,000
Withholding tax payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 30,000
Preference share redemption fund...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 350,000
A 3,290,000 B. 2,890,000 C. 2,790,000 D. 2,810,000
.
A 10,110,000 B. 10,010,000 C. 9,760,000 D. 9,610,000
.
A 960,000 B. 1,000,0000 C. 940,000 D. 880,000
.
A 6,000,000 B. 5,000,000 C. 6,120,000 D. 5,120,000
.

A 2,700,000 B. 1,900,000 C. 5,500,000 D. 5,900,000
.
Accounts receivable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 400,000
Cash and cash equivalents...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 500,000
Accrued interest on notes receivable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 10,000
Inventories...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1,300,000
Notes receivable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... 250,000
Prepaid expenses...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 70,000
Financial assets held for trading...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... 280,000
Allowance for doubtful accounts...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... (20,000)
Advances to officers – not currently collectible...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 100,000
Sinking fund...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 400,000
Building...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 5,000,000
Long term refundable deposit...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 50,000
Cash surrender value...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 60,000
Equipment...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1,000,000
Lease rights...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 100,000
Land...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... . 1,500,000
Land held for speculation...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 500,000
Computer software...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 3,250,000
Accumulated depreciation – building...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... (2,000,000)
Accumulated depreciation – equipment...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... (200,000)
Preference share redemption fund...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .... 350,000
Note payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... 300,000
SSS payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .. 10,000
Accounts payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 400,000
Accrued salaries...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 100,000
Dividends payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 120,000
Withholding tax payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 30,000
Total current liabilities 1,000,000
Bonds payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 5,000,000
Premium on bonds payable...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1,000,000
Total noncurrent liability 6,000,000
Total asset 2,790,000 + 10,110,000 12,900,000

Total liability 1,000,000 + 6,000,000 (7,000,000)
Shareholders’ equity 5,900,000
Dr. Stranger Company provided the following information on December 31, 2022:
• PAGE 11 OF 37•
Cash 400,000
Allowance for doubtful accounts 50,000
Inventories 1,000,000
Land 500,000
Building 5,000,000
Accumulated depreciation – building 2,000,000
Machinery 3,000,000
Accumulated depreciation – machinery 1,200,000
Equipment 400,000
Accumulated depreciation – equipment 100,000
Investment in associate 1,300,000
Accounts payable 350,000
Income tax payable 50,000
Mortgage note payable in quarterly installments of P100,000 2,000,000
Estimated liability for damages 140,000
Retained earnings appropriated for plant expansion 1,000,000
Retained earnings unappropriated 1,250,000
Trademark 150,000
Secret process and formula 200,000
Bank loan payable – due June 30, 2024 500,000
A B. C. D. 2,250,000
.
A B. 7,650,000 C. D. 7,250,000
.
A B. 2,250,000 C. 2,000,000 D.
.
A 1,600,000 B. 1,750,000 C. 2,000,000 D. 2,500,000
.

A B. C. D.
.
CA NCA CL NCL SHE

Cash 400,000
Land 500,000
Building 5,000,000
Accumulated depreciation – building (2,000,000)
Machinery 3,000,000
Accumulated depreciation – machinery (1,200,000)
Equipment 400,000
Accumulated depreciation – equipment (100,000)
Investment in associate 1,300,000
Mortgage note payable 400,000 1,600,000
Estimated liability for damages 140,000
RE appropriated for plant expansion 1,000,000
• PAGE 12 OF 37•
RE appropriated for contingencies 100,000
Retained earnings unappropriated 1,250,000
Trademark 150,000
Secret process and formula 200,000
Bank loan payable – due June 30, 2024 500,000
Total 2,250,000 7,250,000 2,250,000
1) The ledger of Husky Company as of December 31, 2021 includes the following:
Asset
Cash 5,000
Trade accounts receivable (net of P5,000 credit balance in accounts) 20,000
Held for trading securities 40,000
Financial assets designated at FVPL 15,000
Investment in equity securities at FVOCI 35,000
Investment in bonds measured at amortized cost (due in 3 years) 30,000
Prepaid assets 5,000
Deferred tax asset (expected to reverse in 2022) 6,000
Investment in associate 18,000
Sinking fund 19,000
Property, plant, and equipment 50,000
Goodwill 14,000
Total 280,000
How much is the total current assets?

A 125,000 B. 96,000 C. 95,000 D. 90,000
.
2) The ledger of Wagg Company as of December 31, 2021 includes the following:
Liabilities
Bank overdraft 5,000
Trade accounts payable (net of P5,000 debit balance in accounts) 20,000
Note payable (due in 20 semi-annual payments of P2,000) 40,000
Interest payable 15,000
Bonds payable (due on March 31, 2022) 35,000
Discount on bonds payable (15,000)
Dividends payable 5,000
Share dividends payable 6,000
Deferred tax liability (expected to reverse in 2022) 18,000
Contingent liability 50,000
Reserve for contingencies 14,000
Total 860,000
How much is the total current liabilities?

A 96,000 B. 114,000 C. 146,000 D. 90,000
.
The ledger of Poly Company in 2021 includes the following:
Noncurrent assets 2,000,000 ?
Current liabilities 450,000 500,000
Noncurrent liabilities ? 1,500,000
• Rottweiler’s working capital as of December 31, 2021 is twice as much as the working capital as of January 1, 2021.
• Total equity as of January 1, 2021 is P850,000. Profit for the year were P1,200,000 while dividends declared amounted to
P500,000. There were no other changes in equity during the year.
3) How much is the noncurrent liabilities as of January 1, 2021?

A 1,300,000 B. 1,325,000 C. 1,350,000 D. 1,250,000
.
4) How much is the current assets as of December 31, 2021?
• PAGE 13 OF 37•
A 800,000 B. 900,000 C. 850,000 D. 200,000
.
5) How much is the noncurrent assets as of December 31, 2021?

A 3,000,000 B. 2,250,000 C. 2,750,000 D. 2,000,000
.
1) Selected information from the accounting records of Mabini Company is as follows:

Accounts receivable at January 1 1,200,000
Accounts receivable at December 31 1,100,000
Account receivable turnover 6 to 1
Inventory at January 1 800,000
Inventory at December 31 1,400,000
Inventory turnover 5 to 1
What was the gross margin for end of year?

A 1,400,000 B. 1,300,000 C. 1,200,000 D. 1,500,000
.
2) The following unadjusted account balances have been reported on the financial statements by Tarlac Trucking Company on
December 31, 2012:
Cash in bank 4,000,000 Petty cash fund 70,000

Notes receivable 3,000,000 Accounts receivable 5,000,000
Inventory 2,000,000 Deferred charges 350,000
Cash in bank is net of a checking account’s bank overdraft amounting 250,000. Petty cash expenses have not been replenished
for 20,000. Notes receivable includes discounted note of 800,000 while Accounts receivable balance is net of accounts with
credit balances of 650,000. The total current assets for the Balance Sheet as of December 31, 2012 should be
A 12,950,000 B. 14,150,000 C. 12,850,000 D. 13,200,000
.
3) The following unadjusted account balances have been reported on the financial statements by Marilag Biscuit Company on
December 31, 2012:
Cash in bank 4,000,000; Notes receivable 3,000,000;

Accounts receivable 5,000,000; Inventory 2,000,000;
Deferred charges 350,000; Accounts payable 2,500,000;
Notes payable 4,000,000; Accruals 1,500,000;
Cash in bank is net of a checking account’s bank overdraft amounting 250,000. Notes receivable includes discounted notes of
800,000 while Accounts receivable balance is net of accounts with credit balances of 650,000. Accounts payable is also net of
accounts with debit balances of 500,000. The total current liabilities to be reported as of December 31, 2012 should be
A 8,900,000 B. 8,500,000 C. 8,000,000 D. 9,400,000
.
4) The following accounts came from the adjusted trial balances of Davao Pacific Company at December 31, 2012: Cash 750,000,
Accounts receivable, net 1,800,000, Prepaid taxes 400,000 Other Assets 110,000 Accounts payable 140,000
During the year, the company granted special payment terms to a customer that requires the latter to pay equal semi annual
installments of 150,000 for a 600,000 worth of goods and services. Installment dates are due every March 1 and September 1
starting year 2013. Estimated corporate tax payable of 400,000 was charged to prepaid taxes during the year. The corporate tax
rate is 35%. There were no adjustments between financial and taxable income.
What is the amount of current assets that company should show in the financial statements?
A 2,550,000 B. 2,250,000 C. 2,950,000 D. 3,060,000
.
5) Jen Company is completing the preparation of its draft financial statements for the year ended December 31, 2009. The
financial statements are authorized for issue on March 31, 2010.
• PAGE 14 OF 37•
On March 15, 2010, a dividend of P1,750,000 was declared and a contractual profit share payment of P350,000 was made, both
based on the profit for the year ended December 31, 2009.
On February 1, 2010, a customer went into liquidation having owed the entity of P340,000 for the past 5 months. No allowance
had been made against this debt in the draft financial statements.
On December 30, 2010, a manufacturing plant was destroyed by fire resulting in a financial loss of P2,600,000.
What total amount should be recognized in profit or loss for the year ended December 31, 2009 to reflect adjusting events after
the end of reporting period?
A 1,750,000 B. 3,290,000 C. 2,600,000 D. 690,000
.
Contractual profit share payment 350,000

Bad debt loss 340,000
Loss due to fire 2,600,000
Total adjusting entries 3,290,000
1) You are given the following selected accounts by Rapbeh Corporation, a manufacturer of tuba on December 31, 2016.
Cash and cash equivalents 2,500,000
Trade and other receivables (which includes a 2-year, non-trade note receivable of P1M due on
December 31, 2023) 3,000,000
Inventories (which includes P1,500,000 raw materials that will take three years to process before sale) 2,000,000
Interest fund 200,000
Building fund 5,000,000
In Rapbeh’s December 31, 2021 balance sheet, how much is to be reported as current asset?
A 5,200,000 B. 6,000,000 C. 6,700,000 D. 12,700,000
.
Camille Company began operations on January 1, 2022. The accountant prepared the following:
Assets Liabilities and equity

Cash 49,600 Accounts payable 28,000
Part inventory 24,000 Share capital, P100 par 265,600
Equipment 220,000 .
Total assets 293,600 Total liabilities and equity 293,600
The company has developed plans to expand its business and in the process of negotiating a bank loan to finance the expansion. The
bank is requesting 2022 financial statements prepared on the accrual basis of accounting. As the company’s external auditor, you
were called upon to assist in preparing the financial statements. During the course of your engagement, you obtain the following
information:
Transactions for 2022

Cash sales 232,000
Collections from credit customers 80,000
Payments on account for parts 80,800
Wages paid to employees 124,000
Payments to the utility company 22,000
• Uncollected customers’ bills totaled P69,800 at December 31, 2022.

• On March 1, 2022, a supplier advanced the company P40,000 on a 1-year, 12% note payable with semiannual interest payments
to be made on September 1, 2022 and at maturity on March 1, 2023.
• Unpaid bills to suppliers totaled P11,200 at December 31, 2022.
• Parts costing P8,000 were on hand at year-end.
• Wages owed at year-end were P5,600.
• Utility expense of P1,950 was unpaid at year-end.
• The P18,000 insurance premium was paid for 1-year policy effect February 1, 2022.
• The rent of P3,000 was paid on the first day of every month.
• The company’s equipment, purchased at the time the company was founded, should be depreciated over tis useful life of 10
years using straight-line depreciation with no residual value.
• PAGE 15 OF 37•
• The effective tax rate is 40%. No taxes have been paid.
2) What is the net income for 2022?

A 69,750 B. 55,050 C. 46,380 D. 41,850
.
3) What is the total current assets at year-end?

A 220,000 B. 198,000 C. 197,700 D. 196,200
.
4) What is the total asset at year-end?

A 417,700 B. 395,700 C. 307,450 D. 197,700
.
5) What is the total equity at year-end?

A 395,700 B. 335,350 C. 307,450 D. 265,600
.
6) What is the total current liability at year-end?

A 90,650 B. 88,250 C. 60,350 D. 48,250
.
Down Ltd has completed its current year financial statements which reveal, in part, the following information.
• Profit for the year – P110,000
• Total comprehensive income – P130,000
• Other comprehensive income relates to the revaluation of land and building to fair value.
• Dividends paid – P35,000
• Opening equity balances – share capital P300,000, retained earnings P220,000, asset revaluation surplus P60,000
• No more share capital was issued during the reporting period
In accordance with PAS 1 Presentation of Financial Statements, determine the amount to be included in the statement of changes in
equity for the current year for the following:
7) Closing retained earnings

A 295,000 B. 315,000 C. 355,000 D. 375,000
.
8) Closing total equity

A 580,000 B. 655,000 C. 675,000 D. 695,000
.
1) At December 31, 2022, the following require inclusion in a company’s financial statements:
• On January 1, 2022 the company made a loan of P12,000 to an employee, repayable on January 1, 2023, charging interest at
2% per year. On the due date she repaid the loan and paid the whole of the interest due on the loan that date.
• The company paid an annual insurance premium of P9,000 in 2022, covering the year ending August 31, 2023.
• In January 2023, the company received rent from a tenant of P4,000 covering the six months to December 31, 2022.
For these items, what should be included as current assets in the company’s statement of financial position as at December 31,
2022?
A 22,240 B. 19,240 C. 18,240 D. 15,240
.
ANSWER: B
Advances to employee 12,000 + (12,000 x 2%) 12,240
Prepaid insurance 9,000 x 8/12 6,000
Rent receivable 4,000
Total current asset 22,240
Use the following information for the next two (2) questions: RECHECK
The accounts and their balances appear in an unadjusted trial balance of BB Company as of December 31, 2021:
Cash and cash equivalents 400,000 Inventory 500,000
Trade and other receivables 2,000,000 Trade and other payables 670,000
Subscription receivable 375,000 Income tax payable 196,500
• PAGE 16 OF 37•
• Trade and other receivables include long term advances to company officers amounting to P430,000.
• The subscription receivable has the following call dates: June 30, 2022, P200,000; December 31, 2022, P100,000; and June 30,
2023, P75,000.
• Inventory of P500,000 was determined by physical count. At December 31, 2021, goods costing P120,000 are in transit from a
supplier. Terms of purchase of said goods is FOB shipping point. The goods and the related invoice have not been received as
of year end.
• Trade and other payable includes dividend payable amounting to P170,000, of which P70,000 is payable in cash P100,000 is
distributable in BB’s own shares.
1) What is the total current assets at December 31, 2021?

A 2,595,000 B. 2,670,000 C. 2,770,000 D. 2,895,000
.
2) What is the total current liability at December 31, 2021?

A 866,500 B. 891,500 C. 766,500 D. 886,500
.
ANSWER: Bonus, C
Trade and other receivables 2,000,000 – 430,000 + 200,000 + 100,000 1,870,000
Inventory 500,000 + 120,000 620,000
Total 2,890,000
Trade and other payable 670,000 – 100,000 690,000

Income tax 196,500
Total 766,500
3) The general ledger trial balance of Central Corporation includes the following statement of financial position accounts at
December 31, 2021:
Inventory (including inventory expected in the ordinary course of operations to be sold beyond 12 months
amounting to P70,000) 110,000
Trade receivable 120,000
Listed investments held for trading purposes at fair value 20,000
Available for sale investments 80,000
The amount that should be reported as current assets on Central’s statement of financial position is
A 218,000 B. 368,000 C. 288,000 D. 298,000
.
ANSWER: C
Inventory 110,000
Trade receivable 120,000
Listed investments held for trading purposes at fair value 20,000
Total 288,000
4) The liability section of the statement of financial position of Lalalalalalala Co. on December 31, 2021 showed:
Share dividends declared but not yet paid 50,000
Dividends in arrears on preference shares 25,000
Income tax withheld 1,500
Deferred income tax payable 10,000
Accounts payable, net of P5,000 debit balance in two supplier’s account 55,000
Bank overdraft with Metro Bank 12,000
Mortgage loans incurred in 2021 payable in ten annual installments starting July 1, 2022 500,000
What amount should the total liabilities be shown?

A 18,500 B. 123,500 C. 173,500 D. 653,500
.
• PAGE 17 OF 37•
ANSWER: B
Income tax withheld 1,500
Accounts payable adjusted 60,000
Bank overdraft with Metro Bank 12,000
Mortgage loans incurred in 2021 payable in ten annual installments starting July 1, 2022 current portion 50,000
Total current liabilities 123,500
5) At the beginning of the year, BLB corporation had total assets of P4,500,000, total liabilities of P2,000,000 and total share
capital of P800,000. During the year, the corporation earned profit of P525,000, paid cash dividends of P400,000 and issued
additional share capital for a total consideration of P300,000. At the end of the year, the company had total assets of
P6,700,000. What is the amount of the total liabilities at the end of the year?
A 1,825,000 B. 2,925,000 C. 3,775,000 D. 4,875,000
.
ANSWER: C
Total asset 4,500,000
Total liability (2,000,000)
Total equity, January 1 2,500,000
Profit during the year 525,000
Cash dividend during the year (400,000)
Investment during the year 300,000
Total equity, December 31 2,925,000

Total equity 2,925,000
Total liability 3,775,000
Margaret Company reported the following on December 31, 2023:
Equipment 840,000 Equity 1,555,000
Patent 210,000 Noncurrent liabilities 750,000
Inventory 600,000 Accounts payable 440,000
Accounts receivable (net) 405,000
Cash 690,000 .
Total 2,745,000 Total 2,745,000
• Cash included P12,000 in petty cash fund and P120,000 in bond sinking fund.
• The net accounts receivable comprised debit balance – P520,000, credit balance – P80,000, and allowance for doubtful accounts
– P35,000.
• Inventory costing P53,000 was shipped out on consignment on December 31, 2023. The inventory balance did not include the
consigned goods but an accounts receivable of P53,000 was recognized on the consigned goods.
• Income tax payable of P90,000 was accrued on December 31, 2023. The entity had set up a cash fund to meet this obligation.
The cash fund was not included in the cash balance but was offset against the income tax payable account.
1) What amount of current asset should be reported on December 31, 2023?

A 1,695,000 B. 1,745,000 C. 1,655,000 D. 1,798,000
.
2) What amount of current liabilities should be reported on December 31, 2023?

A 530,000 B. 520,000 C. 663,000 D. 610,000
.
An alphabetical list of account balances from the books of Jennylyn Company on December 31, 2014 is presented below:
Cash surrender value of life insurance 29,000
Dividends declared 250,000
Mortgage payable (including P200,000 due in six months) 1,200,000
Notes payable, 10% (due January 1, 2015) 1,500,000
Ordinary share capital, P100 par 1,000,000
Preference share capital, P200 par 450,000
Premium on notes payable 25,000
Profit and loss summary, credit balance 500,000
Retained earnings, January 1, 2014 550,000
Share premium – ordinary 250,000
Unearned rent income 33,000
• PAGE 18 OF 37•
1) What is the total non-current liabilities at December 31, 2014?
A 1,000,000 B. 2,525,000 C. 2,550,000 D. 2,725,000
.
2) What is the total shareholders’ equity at December 31, 2014?

A 1,700,000 B. 1,725,000 C. 2,500,000 D. 2,525,000
.
ANSWER: A, C
Mortgage payablenoncurrent portion 1,000,000
Retained earnings, January 1, 2014 550,000

Profit for the year 500,000
Dividends declared (250,000)
Retained earnings, December 31, 2014 800,000
Ordinary share capital, P100 par 1,000,000
Preference share capital, P200 par 450,000
Share premium – ordinary 250,000
Total shareholders’ equity 2,500,000
1) Jomilyne Inc. furnishes you with the following list of accounts:

Advances to sales personnel 10,000
Advertising expense 72,000
Allowance for uncollectible accounts 10,000
Bonds payable 80,000
Cash 22,000
Certificates of deposit 16,000
Ordinary share capital, P10 par 100,000
Equipment 215,500
Inventory 55,000
Investment in Dog Company (40% of outstanding) 76,500
Investment in Cat Company (held for trading) 21,000
Premium on bonds payable 6,000
Rent revenue 37,000
Rent revenue received in advance 12,000
Retained earnings 97,500
Taxes payable 10,000
Tools 52,000
How much is the company’s working capital?

A 72,000 B. 66,000 C. 62,000 D. 46,000
.
ANSWER: A
Current Asset Current Liability Working Capital
Advances to sales personnel 10,000
Cash 22,000
Certificates of deposit 16,000
Inventory 55,000
Investment in Cat Company (held for trading) 21,000
Rent revenue received in advance 12,000
160,000 88,000 72,000
The account balances shown below were gathered from Rica Mae Company’s adjusted trial balance.
Wages payable 250,000 Discount on bonds payable 48,000
Cash 175,000 Investment in associates 1,020,000
• PAGE 19 OF 37•
Bonds payable 600,000 Taxes payable 228,000
Dividends payable 140,000 Accounts payable 248,000
Prepaid expenses 136,000 Accounts receivable 366,000
Inventory 820,000 Property, plant and equipment 1,200,000
Long-term funds 525,000 Goodwill 450,000
Trading securities 153,000 Advances from affiliated companies 900,000
Accumulated depreciation – PPE 400,000 Investment in equity securities, measured through OCI 300,000
3) What it the total current assets of the company?

A 1,950,000 B. 1,650,000 C. 1,560,000 D. 830,000
.
4) What is the total current liabilities of the company?

A 866,000 B. 726,000 C. 686,000 D. 638,000
.
5) What is the total non-current assets of the company?

A 3,995,000 B. 3,950,000 C. 3,095,000 D. 2,795,000
.
ANSWER: B, A, C
Current Current Noncurrent
asset liability asset
Wages payable 250,000
Cash 175,000
Bonds payable
Inventory 820,000
Long-term funds 525,000
Trading securities 153,000
Accumulated depreciation – PPE (400,000)
Discount on bonds payable
Investment in associates 1,020,000
Goodwill 450,000
Advances from affiliated companies 900,000
Investment in equity securities, measured through OCI - - -
Total 1,650,000 866,000 3,995,000
Danica Company had the following assets at December 31, 2014:
Cash (of which P25,000 is earmarked for the acquisition of equipment) 490,000
Trading securities (including P200,000 investment in noncurrent available-for-sale securities) 380,000
Accounts receivable, net (including P500,000 due from an officer; no due date specified) 1,250,000
Non-trade notes receivable (due in equal semi-annual installments of P50,000 every March 1 and September 1) 300,000
Merchandise inventory 900,000
Plant and equipment, net 3,750,000
6) How much is Danica Company’s total current asset?

A 2,475,000 B. 2,425,000 C. 3,400,000 D. 2,745,000
.
7) How much is Danica Company’s total non-current assets?

A 3,750,000 B. 4,675,000 C. 4,725,000 D. 4,750,000
.
8) Abigail Corporation is preparing its December 31, 2014 statement of financial position. The following items may be reported as
either current or non-current liability:
• On December 15, 2014, Abigail declared a cash dividend of P2.50 per share to shareholders of record on December 31. The
dividend is payable on January 15, 2015. Abigail has issued 1,000,000 ordinary shares, of which 50,000 shares are held in
treasury.
• PAGE 20 OF 37•
• Also on December 15, Abigail declared a 10% bonus issue to shareholders of record on December 31, 2014. The dividend
will be distributed on January 31, 2015. Abigail’s ordinary share has a par value of P10 per share and a market value of P38
per share on the date of declaration.
• At December 31, 2014, bonds payable of P10,000,000 are outstanding. The bonds pay 12% interest every September 30
and mature in installments of P2,500,000 every September 30, beginning September 30, 2015.
• At December 31, 2013, customer advances were P12,000,000. During 2014, Abigail collected P30,000,000 of customer
advances, and advances of P25,000,000 were earned.
• At December 31,2014, retained earnings appropriated for future inventory losses is P1,500,000.
How much of the foregoing should be reported as current liabilities?

A 19,675,000 B. 23,000,000 C. 22,175,000 D. 10,175,000
.
ANSWER: C
Dividends payable 950,000 x 2.50 2,375,000
Interest payable 10,000,000 x 12% x 3/12 300,000
Current portion of long term bonds 2,500,000
Customer advances 12,000,000 + 30,000,000 – 25,000,000 17,000,000
Total 22,175,000
Stasis Smash Company revealed the following information on December 31, 2016:
Cash 3,700,000
Inventory 2,000,000
Analysis of cash:
Cash in bank 1,300,000
Bank overdraft in another bank (300,000)
Cash set aside for plant addition 2,000,000
Petty cash fund 10,000
Cash withheld from wages 190,000
General cash 500,000
The accounts receivable included past due account in the amount of P100,000. The account is deemed uncollectible and should be
written off. The inventory included goods held on consignment amounting to P150,000 and goods of P200,000 purchased and
received on December 31, 2016. Neither of these items have been recorded as a purchase. The prepaid insurance included cash
surrender value of life insurance of P50,000.
6) What is the adjusted cash balance?

A 2,000,000 B. 1,700,000 C. 4,000,000 D. 2,300,000
.
7) What is the adjusted net realizable value of accounts receivable?

A 1,200,000 B. 1,400,000 C. 1,300,000 D. 1,500,000
.
8) What is the adjusted inventory?

A 2,200,000 B. 2,000,000 C. 1,850,000 D. 1,600,000
.
9) What total amount should be reported as current assets on December 31, 2016?
A 5,400,000 B. 5,100,000 C. 5,300,000 D. 5,200,000
.
ANSWER: A, C, C, A
Cash in bank 1,300,000
Petty cash fund 10,000
Cash withheld from wages 190,000
General cash 500,000
Total 2,000,000
• PAGE 21 OF 37•
AR Allowance NRV
Unadjusted balance 1,500,000 200,000 1,300,000
Write off (100,000) (100,000) -
Adjusted 1,400,000 100,000 1,300,000
Inventory 2,000,000
Goods held on consignment (150,000)
Adjusted 1,850,000
Adjusted cash balance 2,000,000

Accounts receivable – nrv 1,300,000
Adjusted inventory 1,850,000
Prepaid expense 300,000 – 50,000 250,000
10) The ledger of Husky Company as of December 31, 2021 includes the following:
Asset
Cash 20,000
Trade accounts receivable (net of P20,000 credit balance in accounts) 80,000
Investment in equity securities at FVOCI 140,000
Investment in bonds measured at amortized cost (due in 3 years) 120,000
Deferred tax asset (expected to reverse in 2022) 24,000
Sinking fund 76,000
Property, plant, and equipment 200,000
Goodwill 56,000
Total 1,120,000
How much is the total current assets?

A 500,000 B. 384,000 C. 380,000 D. 360,000
.
ANSWER: D
Cash 20,000
Trade accounts receivable gross 100,000
Total 360,000
11) The ledger of Pug Company as of December 31, 2021 includes the following:
Liabilities
Trade accounts payable (net of P20,000 debit balance in accounts) 80,000
Note payable (due in 20 semi-annual payments of P8,000) 160,000
Deferred tax liability (expected to reverse in 2022) 72,000
Total 860,000

A 584,000 B. 456,000 C. 384,000 D. 360,000
.
ANSWER: C
Trade accounts payable gross 100,000
Note payable (160,000 / 20)x 2 16,000
• PAGE 22 OF 37•
Total 384,000
12) The ledger of Labrador Company as of December 31, 2021 includes the following:
10% Note payable 160,000
14% Mortgage payable 120,000
Interest payable --
• Labrador’s financial statements were authorized for issue on April 15, 2022
• The 10% note payable is due on July 1, 2022 and pays semi-annual interest every July 1 and December 31. On January 28,
2022, Labrador Company entered into a refinancing agreement with a bank to refinance the entire note by issuing a long-
term obligation.
• The 12% note payable is due on March 31, 2022 and pays annual interest every March 31. On January 31, 2022, Labrador
extended the maturity of the note to March 31, 2023 under the existing loan agreement. The extension of maturity date is at
the option of Labrador.
• The 14% mortgage note is due on December 31, 2029. Per agreement with the creditor, Labrador is to pay quarterly
interests on the note, failure to do so will render the note payable on demand. Labrador failed to pay the 3rd and 4th quarterly
interest on the note during 2021.

A 316,000 B. 288,400 C. 310,000 D. 280,000
.
ANSWER: B
14% Mortgage payable 120,000
Total 288,400
Carnage Company reported the following data on December 31, 2021:
Cash on hand and in bank, net of bank overdraft of P50,000 550,000
Petty cash, including unreplenished petty cash expenses P4,000 10,000
Accounts receivable, net of customers account with credit balances of P100,000 1,100,000
Merchandise inventory, excluding unrecorded purchase of P200,000 on account in transit on December 31,
2021 and shipped FOB shipping point on December 31, 2021 2,000,000
Accounts payable, net of suppliers’ accounts with debit balances of P150,000 3,000,000
Note payable, with annual installment of P500,000 payable every December 31 2,000,000
13) What amount should be reported as total current assets on December 31, 2021?
A 4,996,000 B. 4,796,000 C. 4,846,000 D. 4,896,000
.
A 4,300,000 B. 4,100,000 C. 3,800,000 D. 4,000,000
.
ANSWER: A, A
Cash on hand and in bankgross 600,000
Petty cashcurrency and coins 6,000
Accounts receivable gross 1,200,000
Merchandise inventory including inventory in transit 2,200,000
Advances to supplier 150,000
• PAGE 23 OF 37•
Overdraft 50,000
Advances from customer 100,000
Accounts payable including unrecorded purchase and gross of advances to supplier 3,350,000
Note payable current portion 500,000
Total 4,300,000
15) The ledger of Beagle Company as of December 31, 2021 includes the following:
16% Bonds payable 200,000
18% Serial bonds payable 400,000
Interest payable --
• Beagle Company financial statements were authorized for issue on April 15, 2022.
• The 15% note payable was issued on January 1, 2021 and is due on January 1, 2025. The note pays annual interest every
year-end. The agreement with the lender provides that Beagle Company shall maintain an average current ratio of 2:1. If at
any tie the current ratio falls below the agreement, the note payable will become due on demand. As of the 3rd quarter in
2021, Beagle’s average current ratio is 0.5:1. Immediately, Beagle informed the lender of the breach of the agreement. On
December 31, 2021, the lender gave Beagle a grade period ending on December 31, 2022 to rectify the deficiency in the
current ratio. Beagle promised the creditor to liquidate some of its long-term investments in 2022 to increase its current
ratio.
• The 16% bonds are 10-year bonds issued on December 31, 2012. The bonds pay annual interest every year-end.
• The 18% serial bonds are issued at face amount and are due in semi-annual installments of P40,000 every April 1 and
September 30. Interests on the bonds are also due semi-annually. The last installment on the bonds is due on September 30,
2027.

A 298,000 B. 280,000 C. 218,000 D. 200,000
.
ANSWER: B
16% Bonds payable 200,000
18% Serial bonds payablecurrent portion 80,000
The ledger of Rottweiler Company in 2021 includes the following:
Current assets 2,400,000 ?
Noncurrent assets 8,000,000 ?
Current liabilities 1,800,000 2,000,000
Noncurrent liabilities ? 6,000,000
• Rottweiler’s working capital as of December 31, 2021 is twice as much as the working capital as of January 1, 2021.
• Total equity as of January 1, 2021 is P3,400,000. Profit for the year were P4,800,000 while dividends declared amounted to
P2,000,000. There were no other changes in equity during the year.
16) How much is the noncurrent liabilities as of January 1, 2021?

A 5,400,000 B. 5,300,000 C. 5,200,000 D. 5,000,000
.
17) How much is the current assets as of December 31, 2021?

A 800,000 B. 3,600,000 C. 3,400,000 D. 3,200,000
.
18) How much is the noncurrent assets as of December 31, 2021?

A 12,000,000 B. 11,000,000 C. 9,000,000 D. 8,000,000
.
ANSWER: C, D, B
• PAGE 24 OF 37•
Total asset, January 1, 2021 2,400,000 + 8,000,000 10,400,000
Total equity, January 1, 2021 (3,400,000)
Current liability (1,800,000)
Noncurrent liability 5,200,000
Working capital, January 1 2,400,000 – 1,800,000 600,000

Twice 2
Working capital, December 31 1,200,000
Current liability 2,000,000
Current asset 3,200,000
Total equity, January 1, 2021 3,400,000

Profit 4,800,000
Dividend (2,000,000)
Total equity, December 31, 2021 6,200,000
Total liability 2,000,000 + 6,000,000 8,000,000
Current asset (3,200,000)
Noncurrent asset 11,000,000
19) The ledger of Afghan Hound Company in 2021 includes the following:
Cash 400,000
Inventory 2,000,000
During the audit of Afghan Hound’s 2021 financial statements, the following were noted by the auditor:
• Cash sales in 2022 amounting to P40,000 were inadvertently included as sales in 2021. Afghan recognized gross profit of
P12,000 on the sales.
• A collection of an P80,000 accounts receivable in 2022 was recorded as collection in 2021. A cash discount of P4,000 was
given to the customer.
• During January 2022, a short-term bank loan of P100,000 obtained in 2021 was paid together with P10,000 interest
accruing in January 2022. The payment transaction in 2022 was inadvertently included as a 2021 transaction.
How much is the adjusted working capital as of December 31, 2021?

A 2,482,000 B. 2,420,000 C. 2,402,000 D. 2,342,000
.
ANSWER: C
Cash400,000 – 40,000 – 80,000 + 110,000 390,000
Accounts receivable800,000 + 84,000 884,000
Inventory2,000,000 + 28,000 2,028,000
Accounts payable (600,000)
Note payable (200,000)
Short term loan (100,000)
Working capital 2,402,000
Alaskan Company provided the following balances on December 31, 2021:
Inventory 650,000
Prepayments 120,000
Further analysis of Alaskan Company’s accounts revealed the following:

• Cash account includes a sinking fund of P300,000, as well as P90,000 being held to pay VAT. The balance was net of an
overdraft amounting to P200,000 in its BPI account. Alaskan does not have any other account in BPI.
• Prepayments included a P50,000 security deposit which will expire by December 31, 2023.
• The deferred tax asset was due to a future deductible amount of which 40% will reverse in 2022 and the remaining portion
evenly from 2023 to 2025.
• Intangible assets includes goodwill of P70,000; P50,000 was recorded in relation to its acquisition of Malamute Company,
while P20,000 was recorded in relation to cost incurred in improving the initial goodwill recognized.
• PAGE 25 OF 37•
20) The amount reported as current assets on December 31, 2021 is
A 1,900,000 B. 1,820,000 C. 1,700,000 D. 1,620,000
.
21) The amount reported as noncurrent asset on December 31, 2021 is

A 1,350,000 B. 1,320,000 C. 1,300,000 D. 1,050,000
.
ANSWER: B, A
Cash and cash equivalents1,200,000 – 300,000 + 200,000 1,100,000
Inventory 650,000
Prepayments120,000 – 50,000 70,000
Total total current asset 1,820,000

Intangible assets380,000 – 20,000 360,000
Sinking fund 300,000
Security deposit 50,000
Foxhound Company provided the following balances on December 31, 2021:
Cash and cash equivalent 1,000,000
Trade and other receivable 950,000
Inventory 500,000
Financial assets at fair value through P&L 500,000
Financial assets at fair value through OCI 800,000
Property, Plant and Equipment 1,500,000
Further analysis of Foxhound Company’s accounts revealed the following:

• Trade and other receivable included the following:
Advances to an executive officer for P250,000 which is due on March 1, 2023.
Customer credit balance of P60,000 which deducted in relation to goods returned in 2021.
Equity over the assigned accounts of P120,000; the assigned accounts amounted to P200,000 while the related note
balance was P80,000.
• Property, Plant and Equipment includes a plot of land in which Foxhound Company has committed to a plan to sell it and
currently active in locating a buyer to complete the plan. The carrying value of the land included in the account was P675,000
while its fair value less cost to sell is P600,000.
22) The amount reported as current asset on December 31, 2021 is

A 3,440,000 B. 3,240,000 C. 2,950,000 D. 2,840,000
.
23) The amount reported as noncurrent asset on December 31, 2021 is

A 2,475,000 B. 2,375,000 C. 1,875,000 D. 1,625,000
.
ANSWER: A, C
Cash and cash equivalent 1,000,000
Trade and other receivable950,000 – 250,000 + 60,000 + 80,000 840,000
Inventory 500,000
Financial assets at fair value through P&L 500,000
NCA held for sale 600,000

Property, Plant and Equipment1,500,000 – 675,000 825,000
Advances to officer 250,000
Anatolian Company provided the following balances on December 31, 2021:
Inventory 800,000
• PAGE 26 OF 37•
Financial assets held for trading 600,000
Available-for-sale investments 2,000,000
Held-to-maturity securities 1,500,000
Cash surrender value 400,000
Further analysis of Anatolian Company’s accounts receivable revealed the following:

• Inventory included the following:
Inventory costing P200,000 expected to be sold within Anatolian Company’s ordinary course of operations but beyond
12 months from December 31, 2021.
Goods costing P100,000 received from Shepherd Company under consignment.
• Held-to-maturity securities represents investment in bonds of which P600,000 is a set to mature in May 2022; and P900,000
maturing in August 2023.
24) The amount reported as current assets on December 31, 2021 is

A 3,300,000 B. 2,850,000 C. 2,350,000 D. 2,250,000
.
25) The amount reported as noncurrent assets on December 31, 2021 is

A 4,000,000 B. 3,900,000 C. 3,300,000 D. 2,900,000
.
ANSWER: B, C
Inventory800,000 – 100,000 700,000
Financial assets held for trading 600,000
Held-to-maturity securitiescurrent portion 600,000
Available-for-sale investments 2,000,000

Held-to-maturity securitiesnon current portion 900,000
Appenzeller Company provided the following account balance on December 31, 2021:
Notes payable 900,000
Further analysis of Appenzeller Company’s accounts revealed the following:

• Accounts payable included the following:
Customer credit balance, P30,000.
Debit balance in supplier’s accounts P80,000 which was deducted.
Advances from shareholders, P200,000; call date April 1, 2023.
• Notes payable included the following:
6%, 3-year note, face amount P400,000 from Dog Company, due date March 31, 2022. On December 30, 2021,
Appenzeller and Dog Company signed a refinancing contract that will extend the due date to March 31, 2024, no
accrued interest.
8%, 3-year note, face amount P500,000 from Cat Company, due date August 1, 2022. On January 1, 2022, Appenzeller
Company completed a refinancing contract that will extend the due date to August 1, 2024, no accrued interest.
26) The amount reported as current liabilities on December 31, 2021 is

A 1,446,000 B. 1,036,000 C. 956,000 D. 926,000
.
27) The amount reported as noncurrent liabilities on December 31, 2021 is

A 1,220,000 B. 720,000 C. 600,000 D. 520,000
.
ANSWER: B, C
Accounts payable450,000 + 80,000 – 200,000 330,000
Notes payable900,000 – 400,000 refinance after 500,000
Total 926,000
• PAGE 27 OF 37•
Notes payablerefinanced before 400,000
Advances from shareholders 200,000
Total noncurrent liability 720,000
Cattle Company provided the following balances on December 31, 2021
Accounts payable and accruals 700,000
Stock dividends payable, issuance in 2022 250,000
Provisions 700,000
Further analysis of Cattle Company’s accounts revealed the following:

• Accounts payable and accruals included the following:
Bank overdraft – BDO account, P40,000; Cattle does not have any other account in BDO.
Accrued expenses for utilities, P90,000.
• Bonds payable included the following:
6%, term-bonds, maturity date January 1, 2024, P500,000.
8%, serial bonds, P2,000,000 of which P250,000 matures every June 30 and December 31.
10% term-bonds, maturity date January 1, 2027, recorded at face amount of P1,000,000; the bonds were issued on
December 31, 2021 at a discount of P120,000 giving it a yield rate of 12% and was recorded as expense.
• Provisions included the following:
P500,000 representing the estimated cost to clean up a small lake due to contamination caused by a lean in Cattle
Company’s plant. P300,000 was expected to be incurred in 2022 and P200,000 in 2023.
P200,000 the estimated amount provided by Cattle Company’s legal counsel in relation to a court case being faced by
the Company in which Cattle Company is reasonably possible to lose.
28) The amount to be reported as current liabilities on December 31, 2021 is

A 1,900,000 B. 1,700,000 C. 1,540,000 D. 1,500,000
.
29) The amount to be reported as noncurrent liabilities on December 31, 2021 is

A 3,250,000 B. 3,200,000 C. 3,080,000 D. 3,020,000
.
ANSWER: D, C
Accounts payable and accruals 700,000
Bonds payable250,000 x 2 current portion 500,000
Provisions 300,000
Total current liability 1,500,000
Bonds payable3,500,000 – 500,000 – 120,000 2,880,000

Provisions 200,000
Total noncurrent liability 3,080,000
Belgian Company’s trial balance reflected the following account balances on December 31, 2021:
Cash 400,000
Trade receivable 1,500,000
Inventory, including inventory expected in the ordinary course of operations to be sold beyond 12 months
amounting to P800,000 1,200,000
Financial assets at fair value through profit or loss 300,000
Financial assets at amortized cost 1,000,000
Machinery 800,000
Noncurrent asset held for sale – building 650,000
Land used as a plant site 920,000
30) How much is the total current assets for the year ended December 31, 2021?
A 4,290,000 B. 4,040,000 C. 3,640,000 D. 3,490,000
• PAGE 28 OF 37•
.
31) How much is the total noncurrent assets for the year ended December 31, 2021?
A 3,920,000 B. 3,320,000 C. 3,270,000 D. 2,670,000
.
ANSWER: A, C
Cash 400,000
Trade receivable 1,500,000
Inventory 1,200,000
Noncurrent asset held for sale – building 650,000

Financial assets at amortized cost 1,000,000
Machinery 800,000
Accumulated depreciation (200,000)
Land used as a plant site 920,000
Use the following information for the next two (2) questions: CHECK FOR ERROR
Bedlington Company’s trial balance reflected the following account balances on December 31, 2021:
Cash, net of bank overdraft of P300,000 and unreleased check of P100,000 and including customer’s postdated
check of P50,000 and sinking fund amounting to P280,000 1,000,000
Investment securities held for trading (including long-term investment of P500,000 in ordinary shares of
Dogs Company) 1,800,000
Inventories (including goods received on consignment of P200,000) 800,000
Property, plant and equipment (excluding P300,000 of equipment in use, but fully depreciated)
Goodwill (based on estimated by the President) 1,000,000
Total assets
An analysis of the accounts receivable disclosed the following:

Trade accounts receivable 3,000,000
Selling price of Bedlington’s unsold goods sent to Cat Company on consignment at 125% cost and excluded
from Bedlington’s ending inventory 450,000
An analysis of the prepaid asset disclosed the following:

Deposit to supplier for inventories to be delivered in 16 months 23,000
Prepaid taxes 300,000
Total prepaid expenses 391,000
During 2021, estimated tax payments of P300,000 were charged to prepaid taxes. Bedlington has not yet recorded income tax
expense. There were no differences between financial and taxable income. Bedlington’s tax rate is 30%. Adjusted total revenue and
expenses for the year are P3,000,000 and P2,000,000 respectively.
A 6,850,000 B. 6,428,000 C. 6,228,000 D. 6,178,000
.
A 6,832,000 B. 6,523,000 C. 5,823,000 D. 5,523,000
.
Flo-Rida Company’s trial balance reflected the following account balances on December 31, 2019:
Cash P 1,000,000
Accounts payable, net of debit balance in suppliers’ accounts amounting to P25,000 1,000,000
• PAGE 29 OF 37•
Premium on bonds payable 200,000
Property dividends payable 400,000
Note payable, due January 31, 2020 500,000
Cash dividends payable 80,000
Financial liabilities at FV through profit or loss 130,000
Estimated expense of meeting warranties 335,000
Estimated damages as a result of unsatisfactory performance on a contract 268,000
Mortgage payable 1,000,000
Loans payable (payable in five equal annual installments) 500,000
The P1,000,000 Cash account is net of bank overdraft of P300,000 and unreleased check of P100,000 and including customer’s
posted check of P50,000 and sinking fund amounting to P280,000
34) How much is the total current liabilities for the year ended December 31, 2019?
A 3,538,000 B. 3,238,000 C. 3,688,000 D. 3,388,000
.
35) How much is the total non current liabilities for the year ended December 31, 2019?
A 5,500,000 B. 6,003,000 C. 5,400,000 D. 6,103,000
.
SOLUTION: A, C
Current Non-current
Bank overdraft 300,000 --
Accounts payable – adjusted (1,000,000 +25,000 +100,000) 1,125,000 --
Bonds payable -- 3,400,000
Premium on bonds payable -- 200,000
Deferred tax liability -- 400,000
Property dividends payable 400,000 --
Income tax payable 300,000 --
Note payable, due January 31, 2020 500,000 --
Contingent liability – disclosure only -- --
Share dividends payable – equity account -- --
Cash dividends payable 80,000 --
Financial liabilities at FV through profit or loss 130,000 --
Reserve for contingencies – equity account (appropriated retained earnings) -- --
Estimated expense of meeting warranties 335,000 --
Estimated damages as a result of unsatisfactory performance on a contract 268,000 --
Mortgage payable -- 1,000,000
Loans payable (payable in five equal annual installments) 100,000 400,000
Total 3,538,000 5,400,000
*Customer’spostdated check should be added to the company’s Accounts Receivable. If the check is Company’s postdated check it
should be added back to Accounts Payable.
36) Bolognese Company had the following information for 2021

Accounts receivable turnover 10:1
Total assets turnover 2:1
Average receivable during the year 800,000
Total assets, January 1, 2021 1,600,000
How much is the total assets as of December 31, 2021?

A 2,400,000 B. 6,400,000 C. 3,600,000 D. 8,000,000
.
SOLUTION: B
Average receivable 800,000
AR turnover 10
Net credit sales 8,000,000
Net credit sales 8,000,000

Total assets, January 1 (1,600,000)
Total assets, December 6,400,000
• PAGE 30 OF 37•
Cavalier Company was incorporation on January 1, 2021. The following were the transactions during the year:
• Total consideration from share issuance amounted to P4,000,000.
• A land and building were acquired through a lump sum payment of P800,000. A mortgage amounting to P200,000 was assumed
on the land and building.
• Total payments of P160,000 were made during the year on the mortgage assumed n the land and building. The payments are
inclusive of interest amounting to P20,000.
• Additional capital of P400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the
bank loan required a secondary mortgage on the land and building.
• There is no accrued interest as of year-end.
• Dividends declared during the year but remained unpaid amounted to P120,000.
• No other transactions during the year affected liabilities.
• Retained earnings as of December 31, 2021 is P240,000.
37) How much is the profit for the year?

A 420,000 B. 360,000 C. 320,000 D. 280,000
.
38) How much is the total assets as of December 31, 2021?

A 4,940,000 B. 4,820,000 C. 4,802,000 D. 4,780,000
.
SOLUTION: B, B
Beginning retained earnings 0
Profit squeeze 360,000
Dividends declared (120,000)
Ending retained earnings 240,000
Ending retained earnings 240,000

Mortgage 200,000 – 140,000 60,000
Bank loan payable 400,000
Total asset/ total liability + total equity 4,820,000
My Gad Company
Statement of Financial Position
December 31, 2016
Cash and cash equivalents 95,000 Trade and other payable 82,000
Trade and other receivable, net 100,700 Long-term liabilities 98,000
Inventories 40,000
Property, plant and equipment, net 56,000 Shareholders’ equity 187,200
Other long-term financial assets 48,500
Total Assets 367,200 Total Liabilities and SHE 367,200
The following information is provided:

• Cash and cash equivalents includes the following: plant expansion fund of P15,500; P20,000 fund for the acquisition of
machineries expected to be delivered in 7 months after the balance sheet date. Cash set aside to pay interest due of P7,000; cash
in bank of P30,000 and six-month BSP treasury bills of P6,500.
• The net trade and other receivables balance includes:

Accounts receivable – debit balances 56,000
Notes receivable – trade 18,300
Advances to affiliates 14,400
Suppliers’ debit balance 20,000
• Inventories include the following: goods costing P10,000 held on consignment and goods purchased on account and recorded
on December 28, 2016 FOB Buyer received on January 8, 2017 costing P10,000.
• PAGE 31 OF 37•
• Property, plant and equipment include land costing P20,000 for short-term sale in the ordinary course of business.
• Other long-term financial assets balance includes:

FVPL – Dog Company shares of stock 11,000
FVOCI – Cat Company shares of stock 13,000
Payroll fund 9,500
• Trade and other payable include deferred tax liability of P5,000, P2,500 of which will reverse in 2017.
39) What is the total current asset to be reported in May Gad’s 2016 financial statements?
A 282,300 B. 226,300 C. 219,300 D. 262,300
.
40) What is the total non-current asset to be reported in May Gad’s 2016 financial statements?
A 196,800 B. 120,900 C. 120,000 D. 106,500
.
41) What is the total current liabilities to be reported in May Gad’s 2016 financial statements?
A 92,000 B. 84,500 C. 74,500 D. 67,000
.
SOLUTION: B, B, D
Cash and cash equivalents95,000 – 15,500 – 20,000 + 9,500 69,000
Trade and other receivable, net100,700– 14,400 86,300
Inventories40,000 – 10,000 – 10,000 + 20,000 40,000
FVPL 11,000
Total current assets 226,300
Property, plant and equipment, net56,000 – 20,000 36,000

Other long-term financial assets13,000 + 15,000 28,000
PP fund 15,500 + 20,000 35,500
Advances to affiliate 14,400
Intangible 7,000
Total noncurrent asset 120,900
Trade and other payable82,000 – 10,000 – 5,000 72,000
Emerald Company’s trial balance reflected the following account balances on December 31, 2016:
Cash in bank – Dog Bank 200,000
Inventory 600,000
Prepaid rent (P120,000 per year for the next 3 years) 360,000
Financial assets at fair value through other comprehensive income 300,000
Financial assets at amortized cost 500,000
Bank overdraft – Dog Bank 125,000
Machinery 400,000
Noncurrent assets held for sale – land 325,000
Building used as a plant site 460,000
A 2,505,000 B. 2,430,000 C. 2,140,000 D. 1,815,000
.
A 2,200,000 B. 1,875,000 C. 1,635,000 D. 1,575,000
.
SOLUTION: C, B
Current Noncurrent
• PAGE 32 OF 37•
Cash in bank – Dog Bank 200,000
Inventory 600,000
Prepaid rent (P120,000 per year for the next 3 years) 120,000 240,000
Financial assets at fair value through other comprehensive income 300,000
Financial assets at amortized cost 500,000
Bank overdraft – Dog Bank (125,000)
Machinery 400,000
Accumulated depreciation (100,000)
Noncurrent assets held for sale – land 325,000
Building used as a plant site - 460,000
Total 2,140,000 1,875,000
44) Pearl Company provided the following trial balance on December 31, 2013:
Debit Credit
Cash overdraft 100,000
Inventory 580,000
Land classified as held for sale 1,000,000
Property, plant and equipment 950,000
Accounts payable and accrued expenses 320,000
Ordinary share capital 250,000
Retained earnings -- 830,000
3,000,000 3,000,000
Checks amounting to P300,000 were written to vendors and recorded on December 29, 2013, resulting in a cash overdraft of
P100,000. The checks were mailed on January 15, 2014. Land classified as held for sale was sold for cash on January 31, 2014.
The entity issued the financial statements on March 31, 2014. On December 31, 2013, what total amount should be reported as
current assets?
A 2,250,000 B. 2,050,000 C. 1,950,000 D. 1,250,000
.
ANSWER: A
Current Noncurrent
Cash in bank adjusted 300,000 – 100,000 200,000
Inventory 580,000
Land classified as held for sale 1,000,000
Property, plant and equipment - 950,000
2,250,000 950,000
45) On December 31, Myrmidon Corporation’s current liabilities total P50,000 and long-term liabilities total P150,000. Working
capital at December 31 is equal to P80,000. If Myrmidon Corporation’s debt-to-equity ratio (total liability divided by total
equity) is 0.32 to 1, total long-term assets must equal
A 795,000 B. 745,000 C. 695,000 D. 625,000
.
ANSWER: A
Current liability 50,000
Noncurrent liability 150,000
Total liability 200,000
Total equity 200,000 / .32 625,000
Total asset 825,000
Current asset 80,000 + 50,000 (130,000)
Noncurrent asset 695,000
46) Plague Corporation’s accounting records provided the following information:

December 31, 2016 December 31, 2017
Noncurrent asset 1,600,000 1,500,000
Current liabilities ? 130,000
Noncurrent liabilities 580,000 ?
• PAGE 33 OF 37•
All assets and liabilities of the company are reported in the schedule above. Working capital of P92,000 remained unchanged
from 2016 to 2017. Net income in 2017 was P88,000. No dividends were declared during 2017 and there were no other changes
in equity. Total noncurrent liabilities at December 31, 2017 would
A 616,000 B. 568,000 C. 480,000 D. 392,000
.
ANSWER: D
Current asset, beg 240,000
Working capital (92,000)
Current liability, beg 148,000
Total asset, beg 240,000 + 1,600,000 1,840,000

Total liability, beg 148,000 + 580,000 (728,000)
Shareholders’ equity, beg 1,112,000
Net income 88,000
Shareholders’ equity, end 1,200,000
Current asset, end 130,000 + 92,000 222,000

Noncurrent asset, end 1,500,000
Total asset, end 1,722,000
Shareholders’ equity, end (1,200,000)
Total liability, end 522,000
Current liability, end (130,000)
Noncurrent liability, end 392,000
47) Prophet Company’s trial balance reflected the following account balances on December 31, 2013:
Financial asset at FVTOCI 600,000
Accumulated depreciation on equipment and furniture 1,500,000
Cash 1,100,000
Inventory 3,000,000
Equipment 2,500,000
Patent 400,000
Land held for future business site 1,800,000
The inventory included goods held on consignment amounting to P500,000. The patent was classified as held for sale on
December 31, 2013. What amount of total current assets should be reported on December 31, 2013?
A 7,200,000 B. 7,100,000 C. 6,800,000 D. 6,600,000
.
ANSWER: D
Cash 1,100,000
Inventory3,000,000 – 500,000 2,500,000
Patent, held for sale 400,000
48) On the December 31, 2015, JE Company reported the following current assets:
Cash……………………………………………………………………………………………………….. 700,000
Accounts receivable……………………………………………………………………………………… 1,200,000
Inventory…………………………………………………………………………………………………… 600,000
An examination of the accounts receivable revealed the following items:

Trade accounts 930,000
Claim against shipper for goods lost in transit 30,000
Sales price of unsold goods sent by JE on consignment at 130% of cost and excluded in ending inventory 260,000
1,200,000
What is the correct amount of current assets on December 31, 2015?

A 2,500,000 B. 2,440,000 C. 2,240,000 D. 2,210,000
.
ANSWER: D
Cash 700,000
• PAGE 34 OF 37•
Accounts receivable930,000 – 20,000 + 30,000 940,000
Inventory600,000 + (260,000 / 130%) 800,000
49) Flux Company proved the following data on December 31, 2014:
Cash and cash equivalents, including sinking fund of P500,000 2,500,000
Notes receivable (P200,000 pledged as security) 2,000,000
Accounts receivable – unassigned 800,000
Accounts receivable – assigned 300,000
Notes receivable discounted 500,000
Equity of assignor in assigned accounts 250,000
Inventory, including P100,000 cost of goods sent out on consignment 1,000,000
Allowance for doubtful accounts 50,000
Held for trading securities at fair value 1,500,000
Financial asset at FVTOCI 1,000,000
Financial asset at amortized cost 900,000
Noncurrent asset held for sale 600,000
Prepayments including deferred charges of P400,000 700,000
What total amount of current asset should be reported on December 31, 2014?
A 8,350,000 B. 7,950,000 C. 7,850,000 D. 7,550,000
.
ANSWER: B
Cash and cash equivalents, excluding sinking fund 2,000,000
Notes receivable (P200,000 pledged as security) 2,000,000
Accounts receivable – unassigned 800,000
Accounts receivable – assigned 300,000
Notes receivable discounted (500,000)
Equity of assignor in assigned accountsdisclosure only -
Inventory, including P100,000 cost of goods sent out on consignment 1,000,000
Held for trading securities at fair value 1,500,000
Noncurrent asset held for sale 600,000
Prepayments excluding deferred charges 300,000
Tree Company provided the following information at year-end:
Goodwill 500,000
Intangible assets 2,000,000
Investments in associates 1,000,000
Available-for-sale financial assets 1,250,000
Trade receivables 1,750,000
Other current assets 200,000
Other components of equity 500,000
Long-term borrowings 1,300,000
Short-term borrowings 2,000,000
Long-term provisions 400,000
Short-term provisions 100,000
Current portion of long-term borrowings 250,000
50) What is the total amount of current asset?

A 7,650,000 B. 7,400,000 C. 6,400,000 D. 6,200,000
.
51) What is the total amount of current liabilities?

A 3,000,000 B. 2,650,000 C. 2,400,000 D. 2,350,000
.
52) What is the total shareholders’ equity attributable to the parent?

A 10,300,000 B. 9,800,000 C. 9,000,000 D. 7,000,000
• PAGE 35 OF 37•
.
ANSWER: C, B, A
Current asset Current Liability Shareholders’
Goodwill
Intangible assets
Investments in associates
Available-for-sale financial assets
Trade receivables 1,750,000
Other current assets 200,000
Other components of equity 500,000
Long-term borrowings
Short-term borrowings 2,000,000
Deferred tax liability
Long-term provisions
Short-term provisions 100,000
Current portion of long-term borrowings - 250,000 -
Total 6,400,000 2,650,000 10,300,000
53) Hag Company reported the following account balances at December 31, 2014:
Trading securities 1,200,000
Accumulated depreciation on equipment and furniture 350,000
Cash 200,000
Inventory 600,000
Equipment and furniture 2,500,000
Patent 120,000
Deferred charges 40,000
Land held for future business site 800,000
What amount should be reported as total current asset?

A 3,390,000 B. 2,590,000 C. 2,550,000 D. 1,390,000
.
ANSWER: C
Trading securities 1,200,000
Cash 200,000
Inventory 600,000
54) Behemoth Company reported working capital on December 31, 2014 at P1,700,000. Data pertaining to 2015 are as follows:
Working capital provided by operations 900,000
Purchase of plant asset for cash 600,000
Short-term borrowings 950,000
Payments on short-term borrowings 500,000
Cash dividends paid on ordinary shares 250,000
Machine received as donation form a shareholder 550,000
What is the working capital on December 31, 2015?

A 2,450,000 B. 2,200,000 C. 2,000,000 D. 1,750,000
.
ANSWER: D
Current asset Current liability Working capital
Beginning 1,700,000 0
Working capital provided by operations 900,000 0
Purchase of plant asset for cash (600,000) 0
Short-term borrowings 950,000 950,000
Payments on short-term borrowings (500,000) (500,000)
Cash dividends paid on ordinary shares (250,000) 0
Machine received as donation form a shareholder 0 0 -
Ending 2,200,000 450,000 1,750,000
• PAGE 36 OF 37•
55) On December 31, 2014, Berzerker Company’s current liabilities totaled P470,000 and noncurrent liabilities totaled P550,000.
Working capital at December 31, 2014 is equal to P100,000. If the debt-to-equity ratio is 0.30 to 1, what was the amount of
noncurrent assets?
A 4,420,000 B. 3,850,000 C. 3,300,000 D. 2,830,000
.
ANSWER: B
Current liability 470,000
Noncurrent liability 550,000
Total equity 1,020,000 / .30 3,400,000
Current asset 100,000 + 470,000 570,000
Noncurrent asset 3,850,000
Comet Company as of December 31, 2017 provided the following balances:
Cash, net of a P7,000 overdraft 80,000
Receivable, net of customer credit balances totaling P6,000 30,000
Inventory (P20,000 of which are held on consignment) 60,000
Prepayments 10,000
Property, plant and equipment, net of accumulated depreciation of P15,000 90,000
Accounts payable net of debit balances in suppliers’ accounts of P3,000 45,000
Notes payable – bank, due on July 2018 25,000
56) Total current assets reported in the December 31, 2017 balance sheet is
A 176,000 B. 173,000 C. 170,000 D. 156,000
.
57) Total current liabilities reported in the December 31, 2017 balance sheet is
A 101,000 B. 98,000 C. 95,000 D. 76,000
.
ANSWER: A, A
CA CL
Cash 80,000 + 7,000 87,000
Receivable 30,000 + 6,000 36,000
Inventory 60,000 – 20,000 40,000
Prepayments 10,000
Accounts payable 45,000 + 3,000 48,000
Notes payable – bank, due on July 2018 25,000
Customer credit balance 6,000
Supplier debit balance 3,000 -
Total current 176,000 94,000
• PAGE 37 OF 37•

Financial Statement Analysis

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Statement Analysis

Uploaded by

Copyright:

Available Formats

A. C.

Current liabilities P 330,000

5) Mumay Company trial balance has the following selected accounts:

1) Beloved Corporation has the following accounts at December 31, 2019:

Cash in general checking account 3,500,000

1) What is the correct amount of cash balance to be reported as current asset?

An analysis disclosed that accounts receivable comprised the following:

3) What is the net realizable value of accounts receivable?

5) Bane Company reported the following current asset at year-end:

The accounts receivable consisted of the following:

What total amount should be reported as current asset at year-end?

Accounts payable, net of accounts with debit balances of P1,000,000 7,000,000

Customers’ debit balances, net of customers’ deposit P50,000 1,900,000

8) What is the adjusted cash balance?

11) What is the shareholders’ equity on December 31?

12) What is the amount of noncurrent liabilities on December 31?

5) On December 31, 2022, what is the total shareholder’s equity?

CA NCA CL NCL SHE

Accumulated depreciation – building............................................................ ..................................... (1,600,000)

Serial bonds payable – current portion 500,0000

Serial bonds payable non current portion 2,500,000 – 500,000 2,000,000

14) On December 31, 2022, what is the total shareholder’s equity?

Total asset 2,790,000 + 10,110,000 12,900,000

19) On December 31, 2022, what is the total shareholder’s equity?

CA NCA CL NCL SHE

How much is the total current assets?

How much is the total current liabilities?

3) How much is the noncurrent liabilities as of January 1, 2021?

4) How much is the current assets as of December 31, 2021?

5) How much is the noncurrent assets as of December 31, 2021?

1) Selected information from the accounting records of Mabini Company is as follows:

What was the gross margin for end of year?

Cash in bank 4,000,000 Petty cash fund 70,000

Cash in bank 4,000,000; Notes receivable 3,000,000;

Contractual profit share payment 350,000

Assets Liabilities and equity

Transactions for 2022

• Uncollected customers’ bills totaled P69,800 at December 31, 2022.

2) What is the net income for 2022?

3) What is the total current assets at year-end?

4) What is the total asset at year-end?

5) What is the total equity at year-end?

6) What is the total current liability at year-end?

7) Closing retained earnings

8) Closing total equity

1) What is the total current assets at December 31, 2021?

2) What is the total current liability at December 31, 2021?

Trade and other payable 670,000 – 100,000 690,000

What amount should the total liabilities be shown?

Total asset 6,700,000

1) What amount of current asset should be reported on December 31, 2023?

2) What amount of current liabilities should be reported on December 31, 2023?

2) What is the total shareholders’ equity at December 31, 2014?

Retained earnings, January 1, 2014 550,000

1) Jomilyne Inc. furnishes you with the following list of accounts:

How much is the company’s working capital?

3) What it the total current assets of the company?

4) What is the total current liabilities of the company?

5) What is the total non-current assets of the company?

6) How much is Danica Company’s total current asset?

7) How much is Danica Company’s total non-current assets?

How much of the foregoing should be reported as current liabilities?