Reference no: EM132831704

Question - The accounts below were taken from the unadjusted trial balance of Digz Company as at December 31, 2020:

Cash and cash equivalents P1,240,000

Investment in securities held for trading, at cost P870,000

Investments in equity securities (at fair value through OCI) P2,500,000

Notes Receivable P920,000

Trade Accounts Receivable P1,220,000

Allowance for Bad Debts P60,000

Merchandise Inventory P1,360,000

Notes Payable P1,500,000

Trade Accounts Payable P750,000

Employees Income Tax withheld P40,000

Bonds Payable P2,500,000

Share Dividends Distributable P150,000

Income Tax Payable P280,000

Deferred Tax Liability P78,000

An analysis of the above accounts disclosed the following:

a. Included in Cash and Cash Equivalents is a 120-day, P500,000, certificate of time deposit dated September 17, 2020 and maturing on January 15, 2021. The certificate of deposit bears an interest rate of 4.8%. Digz has not accrued any interest on this deposit.

b. Trade accounts receivable was net of customers' deposit of P50,000.

c. Merchandise worth P150,000 received December 30, 2020 was included in the inventory but was not recorded as a purchase.

d. Accounts Payable was net of accounts with debit balance of P100,000.

e. A bank loan of P300,000 due December 31, 2022 was included in the notes payable balance.

f. Bonds Payable, which bear interest at 10%, were issued on June 30, 2020, will mature in five annual installments beginning June 30, 2021. The company has not recorded the accrued interest on these bonds at December 31, 2020.

g. The securities held for trading have a fair value of P900,000 while investment in equity securities measured through OCI have fair value of P2,420,000.

h. P28,000 of deferred tax liability is expected to reverse in 2021.

Required - Determine the total current assets and total current liabilities of Digz Company at December 31, 2020.