Reference no: EM132918290
Problem 1 - CAR Company provided the following information at year-end:
Cash 1,500,000
Accounts Receivable 1,200,000
Inventory, including inventory expected in the Ordinary course of operations to be sold beyond 12 mos. amounting to P700,000 1,000,000
Financial asset held for trading 300,000
Equity investment at fair value through other 800,000 comprehensive income
Equipment held for sale 2,000,000
Deferred tax asset 150,000
What amount should be reported as total current assets at year-end?
a. 6,000,000
b. 4,000,000
c. 6,800,000
d. 4,800,000
Problem 2 - Riza Company was incorporated on January 1, 2019 with P5,000,000 from the issuance of share capital and borrowed funds of P1,500,000. During the first year, net income was P2,500,000.
On December 15, the entity paid a P500,000 cash dividend. On December 31, 2019, the liabilities had increased to P1,800,000.
On December 31, 2019, what amount should be reported as total assets?
a. 6,500,000
b. 9,300,000
c. 8,800,000
d. 6,800,000
Problem 3 - Mariza Company used the allowance method of accounting for doubtful accounts.
The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31:
No. of days Probability of Outstanding Amount collection
0-30 days 5,000,000 0.98
31-60 days 2,000,000 0.90
Over 60 days 1,000,000 0.80
The following additional information is available for the current year:
Net Credit sales for the year 40,000,000
Allow. for doubtful accounts:
Balance, January 1 450,000 (cr)
Balance before adjustment, Dec. 31 20,000 (dr)
What amount should be recognized as doubtful accounts expense for the current year?
a. 470,000
b. 480,000
c. 500,000
d. 520,000
Problem 4 - Effective with current year, Hall Company adopted a new accounting method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging of accounts receivable.
Allowance for doubtful accounts 250,000
Provision for doubtful accounts during the current year at 2% of credit sales of P10,000,000 200,000
Accounts written off 205,000
Estimated uncollectible accounts per aging on Dec. 31 220,000
What amount should be recognized as doubtful accounts expense for the current year?
a. 220,000
b. 205,000
c. 200,000
d. 175,000
Problem 5 - On December 1, 2019, Bamboo Company assigned specific accounts receivable totaling P4,000,000 as collateral on a P3,000,000, 12% note from a certain bank. The entity will continue to collect the assigned accounts receivable.
In additional to the interest, the bank also charged a 5% finance fee deducted in advance on the P3,000,000 value of the note.
The December collections of assigned accounts receivable amounted to P2,000,000 less cash discounts of P100,000. On December 31, 2019, the entity remitted the collections to the bank in payment for the interest accrued and wrote off assigned accounts of P200,000.
What is the carrying amount of note payable on December 31, 2019?
a. 1,000,000
b. 1,100,000
c. 1,130,000
d. 1,460,000