Car-seat manufacturing and distributing company

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Reference no: EM133209515

Varga Corp. is a car-seat manufacturing and distributing company. Nacho, the company's accountant, is tasked to record all the transactions that transpired within the company. The following events have occurred for the month of April, 2022.

1. Varga wrote a check amounting to P 190,000.00 to Hector Corp. for the order of raw leather. Varga has dated the check on May 2, 2022, which coincides with the date of delivery. Nacho did not record the said transaction.

2. Varga received a check from Lalo Corp. for batch of car-seat delivered last March. The check amounted to P 255,000.00 which is dated on May 1 2022. Nacho did not record the transaction.

3. Varga signed a 5-year contract w/ Finger Company to supply a 500 car-seats within 5 years. The contract price for the said engagement amounted to P5,000,000.00 and Varga received the whole amount on the date of signing. As of now, Varga was able to supply the 40 car seats to Finger for the year 2022. Varga decided to expand the business and decided to allot and restrict the whole amount for the construction of a new building and factory. Due to the complexity of the transaction, Nacho did not record the transaction.

4. Due to excess cash on hand, Varga decided to purchase short-term treasury bills and notes. Varga decided to purchase 5 pieces of P300,000 treasury bills and a 15-year treasury bond amounting to P2,000,000.00 from a third person. The 5 treasury bills are set to mature by year-end 2022, while the 15 year bond is set to mature by the end of the 2nd quarter of 2022. Nacho recorded the treasury bills as cash equivalent, while the 15 year bond was recorded as an other asset (non-current).

5. Bryle Corp. was demanding payment from Varga Corp. for the materials purchased last March, 2022. Varga wrote a check dated April 30, 2022 amounting to P175,000.00 Due to Nacho's tardiness, the check was delivered to Bryle Corp. on May 2, 2022. Nacho recorded the check payment on the date it was written.

Varga's beginning cash balance amounted to P700,000.00.

1. Journalize each transaction.

2. Compute for the total amount of :

a. Cash b. Cash Equivalent c. Non-current Asset

Reference no: EM133209515

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