Reference no: EM133090562

Questions -

Q1. GHI Company was incorporated on January 1, 2021, with proceeds from the issuance of P7,500,000 in share capital and borrowed funds of P1,100,000. During the first year, revenue from sales and consulting amounted to P8,200,000 and operating costs and expenses totaled P6,400,000. On December 15, 2021 the entity declared a P300,000 dividend, payable to shareholders on January 15, 2022. No additional activities affected shareholder's equity in 2021. The liabilities increased to P2,000,000 by December 31, 2021. On December 31, 2021, what amount should be reported as total assets?

Q2. The following accounts and their balances appear in an unadjusted trial balance of ONLY Company as of December 31, 2020.

Cash, P400,000; Accounts receivable, P2,000,000; Inventory, P500,000; Accounts payable, P300,000; Notes payable, P200,000.

The cash account includes collection in January 2021 of P200,000 account from customer who was given a cash discount of P10,000.

It also includes a January 2021 cash sale of P50,000. Gross profit on the sale was 40%.

From the amount collected, the company fully paid a bank loan of P100,000 with interest of P20,000 accruing January 2021.

What is the correct amount of working capital on December 31, 2020?

Q3. The working capital of EXP Co. on December 31, 2021 are presented below:

Cash on hand - 200,000

Cash in bank - 108,000

Notes receivable - 250,000

Trade receivable - 600,000

Inventory - 650,000

Prepaid expenses - 45,000

Trade payables - 325,000

Notes payable (due annually at 500,000 payable every March 31) - 1,000,000

Accrued expenses - 40,000

How much total current liabilities should EXP Co. present in its statement of financial position on December 31, 2021?