Reference no: EM132869206

An entity provided the following adjusted balances at year-end

Cash 550,000

Share premium 600,000

Accounts Receivable 1,650,000

Retained earnings 700,000

Prepaid Taxes 300,000

RE adjustment(dr) 500,000

Accounts Payable 200,000

Revenue 3,600,000

Share Capital 500,000

Expenses 2,600,000

During the current year, estimated tax payments of P300,000 were charged to prepaid taxes. The entity has not yet recorded income tax expense. There were no differences between financial income and taxable tax income and the tax rate is 30%. Included in accounts receivable is P500,000 due from a customer. Special terms granted to this customer require payment in equal semiannual installments of P125,000 every April 1 and October 1.

Question 1. What amount should be reported as total current assets?

a. P1,950,000

b. P2,500,000

c. P2,200,000

d. P2,250,000

Question 2. What amount should be reported as total retained earnings?

a. P1,700,000

b. P1,400,000

c. P700,000

d. P900,000

Question 3. What is the total stockholder's equity?

a. P2,500,000

b. P2,000,000

c. P1,800,000

d. P1,300,000