Reference no: EM132619650
Watermelon provided the following account balances on December 31, 2023 which had been adjusted except for income tax expense:
Cash ....................... ....................... ....................... .....800,000
Accounts receivable....................... ....................... ....................... ..... 2,800,000
Inventory....................... ....................... ....................... ..... 3,000,000
Property, plant and equipment at carrying amount....................... ....................... ....................... ..... 10,500,000
Accounts payable ....................... ....................... ....................... ..... 1,800,000
Income tax payable ....................... ....................... ....................... ..... 2,400,000
Bonds payable - due December 31, 2024 ....................... ....................... ....................... ..... 1,300,000
Share capital ....................... ....................... ....................... ..... 2,500,000
Share premium ....................... ....................... ....................... ..... 3,000,000
Retained earnings, January 1 ....................... ....................... ....................... ..... 1,000,000
Net sales and other revenue ....................... ....................... ....................... ..... 20,000,000
Costs and expenses ....................... ....................... ....................... ..... 12,000,000
Income tax expense ....................... ....................... ....................... ..... 2,900,000
The accounts receivable included P1,000,000 due from a customer and payable in quarterly installments of P125,000 under special terms. The last payment is due on December 31, 2025. During the year, estimated tax payment of P500,000 was charged to income tax expense. The income tax rate 30%. Included in property, plant and equipment is land held for sale measured at P1,500,000.
Problem 1: On December 31, 2023, what amount should be reported as total shareholders' equity?
A. 12,100,000
B. 14,500,000
C. 6,500,000
D. 5,500,000