CONTENTS CHAPTER 1 STATEMENT OF FINANCIAL POSITION 2. STATEMENT OF FINANCIAL POSITION 2 Comprehensive problems 3. NOTES TO FINANCIAL STATEMENTS 43 4. STATEMENT OF COMPREHENSIVE INCOME 50 Cost of goods sold and operating ¢xpenses § STATEMENT OF COMPREHENSIVE INCOME 62 Net income and comprehensive income 6 NONCURRENTASSET HELD FOR SALE 16 7 DISCONTINUED OPERATION 88 8 CHANGE INACCOUNTING POLICY 99 9 CHANGE INACCOUNTING ESTIMATE 104 10 PRIOR PERIOD ERRORS fi 11 OPERATING SEGMENT im 12 INTERIMRECORTING iXg 3 CASHAND CASH EQUIVALENTS 148 14, CASH AND CASH EQUIVALENTS 158 Conaprehensive problems 18. BANK RECONCILIATION 16 Basic problems6 17 18 Bee RREERE BANK Comprchenie SE ATIO N PROOF OF CASH ACCOUNTS RECEIVABLE Been OF DOUBTFULACCOUNTS ESTIMA! TION OF DOUBTFUL ACCOUNTS ASSIGNMENT AND FACTORING DISCOUNTING OF NOTE RECEIVABLE NOTES RECEIVABLE LOAN RECEIVABLE IMPAIRMENT OF LOAN INVENTORY Basic problems INVENTORY INCLUSION SALES REVENUE INVENTORY COST FLOW FIFO and average method. RELATIVE SALES PRICE METHOD: LOWER OF COSTAND NET REALIZABLE VALUE 32. GROSS PROFIT METHOD ic problems Basic 55 PROFIT METHOD 33 GRO: ive problems 239 259 273 281 iM 325 338 M3 360 366 M4 RETAILMETHOD 35 BIOLOGICAL ASSETS 36 FINANCIALASSETAT FAIR VALUE Measurement —FVPL and F¥OCI 37 INVESTMENT IN EQUITY SECURITIES 38 INVESTMENT IN ASSOCIATE Basic problems: 38 INVESTMENT IN ASSOCIATE Comprehensive problems: 40 FINANCIALASSETAT AMORTIZED COST Bond investment 41 MARKET PRICE OF BONDS 42 BOND INVESTMENT - FVOCI Fair value option 43 RECLASSIFICATION OF FINANCIAL ASSET 44 INVESTMENT PROPERTY 45 FUNDAND OTHER INVESTMENTS 4% DERIVAITVES ——~ Interest rate swap 47 DERIVATIVES ‘Forward, futures, option, foreign currency 48 PROPERTY. PLANT AND EQUIPMENT 49 ACQUISITION BY EXCHANGE ‘@ GOVERNMENT GRANT S51 LANDAND BUILDING ‘Basic problems $2 LANDAND BUILDING (Comprehensive problems ek ef. 316 7 #0 #20 48 “7 S28 S15 $25 538 556 57853. MACHINERY AND CAPITAL EXPENDITURE $4 BORROWING COST 55 DEPRECIATION Straigh line and variable method 56 DEPRECIATION ‘Sum of years' digits and dectining balance 5? DEPRECIATION Change in usefill life and method 58 DEPLETION Basic problems. 9 DEPLETION ‘Comprehensive problems @ REVALUATION 61 IMPAIRMENT OF ASSET Individual asset 8 IMPAIRMENT OF ASSET (Cash generating unit REVERSAL OF IMPAIRMENT INTANGIBLE ASSETS GOODWILL LEASEHOLD IMPROVEMENT RESEARCH AND DEVELOPMENT COST COMPUTER SOFTWARE Sak & fa 59 60) 615 627 636 643 659 Bg 74 733 tee 761 arbcabanbeata = S SG dere CHAPTER I STATEMENT OF FINANCIAL POSITION Basic problems Problem 1-1 (IFRS) Darwin Company provided the following’ information at year-end: Cash 1,500,000 ‘Accounts receivable ae 1,200,000 Inventory. including inveatory ordinary cours of opentions to be 20M beyond 12 montha amounting to P700,000 Financial asset held for trading '300,000 Equity investment at fair value through other aint Gade 2a oe tered tax asset 150,000 ‘What amount should be reported as total current assets at year-end? @ 6,000,000 'b, 4,000,000 ¢. 6,800,000 _ @. 4'800,000 Solution 1-] Answer a ‘Cash 1,500,000 Accouats receivable “1,200,000 1,000,000 Financial asset held for trading 300,000 Equipment held for sale 2,000,000 Total current assets 6,000,000 Inthe absence of statement tp the contrizy, equity investment at fair vatec through other comprehensive income shall be classified as mencurrent asset. ‘Under IFRS. deferred tax asset is a noncurrent asset. ‘Under IFRS, nencurrent asset held for sale is a. current asset.Problem 1-2 (AICPA Adapted) Se Caren a ne MS cea ‘Cash Accounts receivable $200,000 Inventory, including goods received on 000 consignment P200,000 £90,000 Bond investment at fair value through other ensive income 1,000,000 Prepaid expenses, including a deposit of P50.000 made ‘Of Inventory 10 be delivered in 18 months 150,000 ‘Total current assets. 8,950,000 ‘Cash in general checking account 500,000 ash fund to be used to etre bonds payable in 2020 oe ‘Cash held to pay value added taxes 500,000 Total cash 4,900,000 ‘What total amount of current assets should be reported on December 31, 20187 a a 6,750,000 b. 6,700,000 & 7,700,000 7,750,000 Solution 1-2 Answer $ Cash (3,500,000 + 500,000) 4,000,000 Accounts 2,000,000 Inventory ( 800,000 - 200,000) 600,000 Prepeid expenses ( 150,000 - 50,000) 100,000 Total current assets 6,700,000 The goods received om consignment should be excluded from inventory. ‘The cash fund to be used to retire bonds payable in 2020 should be classified as moncurrent because the bonds mature in more than one year. The bond investment a1 fair value through other comprebensive income 1s & HOECErFeRt Beart. z= Problem 1-3 (AICPA Adapted) Rice Com was incorporated on January 1, 2018 with PS, from the issuance of share capital and borrowed funds of Pl enc frat year net income was P, 500,000. On December 15, the entity paid a P500,000 cash dividend, On {On December 15, the entity ie, bad increased w PI £00,000, On December 31,2018, what amount should be reported s total assets’ Linbilities Share capital $,000,000 Retained earnings (P2.500,000 less dividend P500,000) 2,000,000 ‘Total liabilities and shareholders’ equity 4,200,000 Problem 1-4(AICPA Adapted) Mirr Company was incorporated on January 1, 2018 with proceeds from the issuance of P7-500,000 in share capital and borrowed funds of P1,100,000. On December 15, 2018, the entity declared a P300,. ‘1 shareholders on. 1§, 2019. The liabilities | 000,000 by December 31,2078, On: Decernbe: 31. 2018, what amount should be reported as tocal masets’? 4. 12,100,000 Solution 1-4 Answer a Linbilities : 2,000,000 ‘Share capital - 7,500,000 Retained earnings (8,200,000 — 6,400,000 — 300,000) _ 1,500,000 Total liabilities and shareholders’ equityProblem I-$ (AICPA Adapted) Arabian Company reparted the following current assets at yearn Cash 4.500 Accounts receivable 009 receivable, net of discounted note P500,000 ree charged ‘sti Trade sccounts receivable $,000,000 Allowance for doubtful sccownts C $00,000) Claim against shipper for goods lost ia transit ‘400,009 ‘ar Company of consignment at | of cost Selliag price of Arabian Company's unsold sent to and excluded from Arsbian's ending inventory 3,000,000 7,900,000 ‘What smnount should be repored as trtal current assets at year-end? a. 17,400,000 b. 17,000, e d@ 15,400,000 Solution !+5 Answer a Cosh 4,500,000 ivable + 5,000,000 Allowance for doubtful accownts C "500000) recciveble 2,000,000" Ctaim receivable - "400, Uarventory (4,000,000 + 7,000,000) Total current aseets 17,400,000 fesnaccomn recta ‘coat of tne goods cone be inchuded ‘The cost of i i divided by 150% Toon te mene PO by The discounted note receivable i property wetted against the total The deterred because iechaically they expinein Fe OCU “i spor than one year after the reporting, Problem 1-6 (AICPA Adapted) East Company reported the following current assets al year end: 3,200,000 Avot eivabe 3,000,000 Inventory: 2.800, Prepaid insurance 200,000 Total current assets S20a0e ‘The accounts receivable consisted of the following: Customers” accounts 1,420,000 Employees’ account-current 240,000 Advances to subsidiary 260,000 Allowance for uncollectible accouats (120,000) Subscription receivable, mot collectible currently ——_1.200,000 ‘Total sccounts receivable 3,900,000 ‘Whur total amount should be reported as current assets at year-end? a 8,000,000 b. 9,200,000 7,740,000 8,940,000 + Solution I-6 Answer e Cash 3,200,000 Accounts receivable 1,420,000 Allowance for uncollectible accounts (120,000) Receivable from employees 240,000 Inventory 2,800,000 Prepaid insurance 200,000 Total current assets 7,740,000 ‘The advances to subsidiary should be classified as nencarrent.. Tea eisserppion resetvabis diced be deduction from: subscribed: pi omer nmin Tier reirProblem 1-7(AICPA. Adapted) Wvan Company showed the following cument ames it yearn. Cash Problem 1-3(AICPA Adapted) 3,200,009 SS ‘Accounts receivable 2500609 & December 31,2018: 1 Inventory 2,000,000 ie 900,000 Total current aswets 2200.09 Bonds nino des December 31, 2019 ere oe Discount on bonds payable ‘sod Cash on hand, imcleding customer postdated check ) Deferred ian liability - as P100,000 and employee LOU P50,000 500,000 Dividends payable 9 900,000 Cash in bank per bask statement (outstanding Income tax payable . 0,000 check at year-end P200,000) 2,200,009 Note payable, due January 31, 2020 ‘Total cash should be as _ Sam | On December 31, 2018, what total amount needs ‘What total amount should be reported as current assets? ‘ee 41 ib b é7oo000 = 7,700,000 s 6,500,000 b. 7,450,000 _ |) 4. 6:300,000 . 7,400, i Eras Solution |-8 Answer c | Accounts payable 1,900,000 Solution 1-7 Answer d Dividends payable 500,000 aoe {500,000 — 100,000 - 50,000) 350,000 Income tax payable 900,000, Cash in bank 2,500,000 Bonds payable 3,400,000 Accounts receivable 2,600,000. Discount on bonds payable {_200,000) Advances to employee 50,000 i eats : 20 Total current liabilities 6,500,000 Total current assets 7,500,000 7 | Under IFRS, a deferred tax liability is classified as noncurrent. Cash in bank per bank statement 2,700,000. f | The bonds payable minus the discount on bonds payable should be Outstanding check (200,000) | Classified as current because the bonds are due within one year. % ‘Adjusted cash in bank 2,500,000 ‘The dividends payable and income tax payable are normally classified ecounts receivable 2,500,000 ee ‘Customer postdated check 100,000 The note payable is classified as moncurrent because it manures in Adjusted balance 2,600,000 mare than one year from the end of reporting period. ‘The customer check should be reverted to accounts receivable. S aie i =_. 7Problem 1-9(AICPA Adapted) "Brite Company provided the following information on December 3 2018: 2 Agcounts payable $50,009 Note payable. #% ansecured, due July 1, 2019 4, 4 Accrued expenses 380/00 Contingent liability 450.000 Deferred tax liability ane Senict bonds payable, 7%, due March 31, 2019 5,000,000, The contingent liability is an accrual for possible loss on 4 P1,000,000 lawsuit filed against the entity. The legal eunsel erpees the au fo pe meee in 2019 and has estimated entity wil liable for damages in the P450,000 to 750,000. a ‘The deferred tax liability is not related to an asset for financial Teporting and is expected to reverse in 2019. ‘What total amount should be reported as current liabilities on December 31, 2018? a 10,350,000 b. 10,150,000 ¢. 9,900,000 d& 4,900,000 Solution 1-9 Answer ¢ Accounts payable $50,000 Note payable 4,000,000 Accrued expenses 350,000 Senior bonds payable 5,000,000 Total current liabilities 9,900,000 ‘The contingent liability is only disclosed because it is.a possible fon. ‘Under IFRS, the deferred tax linbiligy is classified as soncarrent regecdiess of the reversal period. ets Probie I-10 (PHILCPA Adapted) Accounts payable, after deducting debit balances in suppliers’ accounts amounting to P100,000 4,000,000 expenses +,500,000 Credit balances of customers’ accounts $00,000: Share dividend payable 1,000,000 ‘Claims for increase in wages and allowance by employees of the entity, covered in 4 pending lawsuit provi i 00, Estimated expenses in redeeming prize coupons: ‘What amount should be reported as total current liabilities? & 6,700,000 b. 6,600,000. ‘c. 7,100,000 7,700,000 Solution J-10 Answer a Accounts payable (4,000,000 + 100,000) 4,100,000 Accrued expenses 1,500,000 (Credit balances in customers’ sceounts 500,000 | Estimated liability for coupons 600,000, ‘Total current liabilities Accounts payable Debit balances in suppliers” accounts: Adjusted accoums payable The debit balances in suppliers’ accounts arc pot “netted” against accounts payable bui should be reported as. current asset. ‘The share dividend payable is not an accounting liability but presented ‘as part of sharebolders’ equity as an addition to share capital. ‘The claims for increase in wages and allowance should be disclosed as contingent Ikability. ’ : aProblem 1-11 (AICPA Adapted) Manda Company reponied the following ability balances on Desemy,_ ‘31, 2018: 10% note payable issued on October 1, 2017, maturing ‘Oetober 1, 2019 : 2,000,099 12% note payable issued on March 1, 2017, maturing 5 on March |, 2019 4,000,000 The 2018 financial statements were issued on March 31,2019. Under the loan agreement for the 10% note payable, the entity ha, she discretion to refinance the obligation fot at least twelve month, after December 31, 2018. On Mare 1, 2019, the entire P4,000,000 balance of the 12% Rote payable was refinanced through issuance of a long-term obligation _ Payable lurap sum_ . ‘What amount ofthe notes payable should be classified as current on December 31.2018? 2 6,000,000 b. 4,000,000 c. 2,000,000 a o Solution 1-1] Answer b The 10% note payable is classified as noneurrent. PAS 1. paragraph 73, provides that if'an entity has the discretion to refinance or roll Cover an obligation for at least twelve months after the reporting period under an existing loan facility, the ebupaeon shall be classified as aoncurrest, even ifit would otherwise be duc within a shorter period, ‘The 12% mote payable is classificd as current. PAS 1. paragraph 72, provides that an obligation that matures within ‘Otte year from the end of reporting period is classified as current evenifitis ona long-term basis after the reporting period and before issuance of the financial statements. The 12% note payable is refinanced on March J, 2019 after the i therefore sad of reporting’ period on December 31, 2018 and chastificd es carrent. i Problem 1-12 (AICPA Adapted) Willem C y reported the following liabilities on December 31, 2018: ‘Accounts payable oe ‘Short-term borrowings 000,000 Bonds payable doe 2019 eee Premium on bonds payable essen Mortgage payable, current portion P500,000 es Bank loan, due June 30, 2019 om ‘The P1,000,000 bank loan was refinanced with a 5-year loan.on December: 31,2018. The financial statements were issued March 1, 2019. ‘What totel amount should be reported as current liabilities on Decernber 51, 20187 a. 7,500,000 b. 5,000,000 ©. 8,500,000 i. 4,000,000 - Solution 1-12 Answer a Accounts payable 2,000,000 ‘Short-term borrowings 1,500,000 Bonds payable 3,000,000 Premium.on boads payable 500,000 Mortgage payable - current portion 500,000 ‘Total current liabilities 7,500,000 ‘The bank loan is classified as moncurremt because it is refinanced on December 31, 2018, the end of reporting period. ‘The bonds payable plus the premium on bonds payable should be ‘classified 2s nomeurrent because the bonds are due in more than one year from the end of reporting period. nProblems 1-13 (AICPA Adapted} Ronna Comany provided the following information on Decembe 3 Solution 1-13 “ ate: Question | Answer b ‘Accounts payable, net of creditors’ debit . alances P700,000 . 2000000 see rable an gees waren 800, Income tax payable 1,100,900 Bons payable Decober 11.2020 4son009 Cash dividend payable 600,000 Premium on bonds pay $00,100 i Deferred tax liability soon Total curren liabilities 4,700,000 Income tax payable 1,100,000 aoe 2.000.000 Cash dividend payable ‘coon Accounts parable ; Share dividend payable 400.000 bit balances of creditors 200,000 ‘Note payable - 6%, duc March Lb, 2019 1.500.000 Adjusted accounts payables 2,200,000 ‘Note payable - 3%. due October 1, 2019 1,000,000 The financial statements for 2018 were issued on March 31,2019, ‘On December 31, 2018, the 6% note fi pelagic 8, payable was refinanced on a iy aha cape: Under the Joan agreement for the 8% note payable, rhe entity Aas the | Suertion? dnswerc diseretian to refinance the obligation for at least twelve months after payable 4 December 31, 2018. Premium on bonds payable ‘Sonam |, Deferred tax tiability 500,000 |. What amount should be reported as total current abilities? Note payable - 6% 1,300,000 i 2700.00 Note payable - 8% 1,000,000 b. 4,700,000 Tora! nomcurrent liabilities 3,000,000 <. 6.200.000 a 4d. $100,000 The 6% note payable is classified a9 nomewrrent because itis refinanced the end of reporting period on December 31, 2018. The 8% note payable is also classified as moncurrent becanse a 3,400,000 eutity bas discretion te refinance. the b. 5.500.000 © 3,000,000 7500.00 2. What amount should be reported as total mescurrent linbilities’Problem 1-14 (LAA} 31, 2O1B: hex ome taxes withheld Cash beiance at First Stare Bank asa Cast overdraft at Harbor Bank Toone ‘Aeoounts recervable wrth credit balance ro imated expenses of meeting warranties. Eola damages as a result of unsatisfactory 500.600 performance on a contract Accounts payable Deferred serial bonds, issued at par and bearing interest at 17%, payable in semiannual instaliments of P500,000 due April | and October | of each year, the last bond to be paid on October 1, 2624. interest is also paid semiarcuslty 5,000,000 ‘What amount should be reported as total current liabilities on December 31, 20187 a 8,100,000 b. 7,950,000 «9,100,000 7,350,000 Solution 2-[4 Answer a Employee income taxes withheld 900,000 (Cash overdrafi 1,300,000 Accounts receivable with credia balance 750,000 Estimated warranty liability 500,000 Estimaicd daroages payabic 1,500,006 Accouncs payable 3,000,004 Accrued interest on bonds from October | to December 31, 2013 (5,000,000 x 12% x 3/12) 150,000 Total corrent Teabilitics. 8,100,000 The bonds will be paid over 5 because the sensiannuml b 500,000. Since bela bord wil be paid on October 1 304, be first bond will be paid on Apel |, 2028. Accordingly, there ix no currently maturing bond in 2018. “ Problem 1-15 (AICPA Adapted) ‘Charice Company provided the following information on December 31, 2018: Accounts payable amounted to P500,000 and accrued expenses totaled P300,000 on December 31, 2018. * December 15,2018, the entity declared a cash dividend of P7| Queer 15,2018. th er papa on January 15,2019, * On July |, 2018, the entity issued P$,000,000, 8% bonds for P 4,400,000 to yield 10%. bonds mature on June 30, 2023, ‘and pary interest annually every June 30. © The financial income was P2,500,000 and taxable income ‘was P6,000 00, The difference is due to P1,000,000 difference iid P1500,000 of taxable temporary to reverse in 2019. 2 The income tax rate is 30%. The ity made estimated income tax payments during the year of PI. . ‘What amount should be reported as wtal current liabitities on December 31, 20187 & 3,500,000 b. 2,700,000 ©. 2,300,000 a 2,500,000 Solution 1-15 Answer d Accounts payable Accraed expenses Dividends payable (100,000 shares x 7) Accrued interest payable (5,000,000 x 8% x 6/12) Income tax payable ‘Total current liabilities ‘Current tax expense (6,000,000 x 30%, Estimated tax payment Y Income tax. payable The interest on the bonds payable is le annually on June 30. ‘Thacstere i an ccruct eres payee om ly Ivo Decent 31, 2018 of six months, ieee apse iProblem 1-16 (AICPA. Adapted) United Company provided the following current Asse t sharcholders’ equity ot year-end: 3 ang rash Palle assets at fair value through profit or loss, 00.00 including cosi of P300,000 of United Company shares \ Accounas receivable rs Inventory 1.500.060, ‘Total current assets 6.600.009 Share premium 2,000,000 Retained earmings $00,000 Total sharebolders" equity 7,500,000 ‘What smount should be reported as total shareholders’ equity? a 7,200,000 b. 7,500,000 <. 7,800,000 @. 5,200,000 Solution !-16 Answer a ‘Share capital 5,000,000 ‘Share premigm 2,000,000 Retained carnings 300,000 ‘Treasury shares, at cost. (300,000) Total shareholders’ equity ‘The treasary shares are excluded from financial assets af fair valuc Problem 1-17(AICPA Adapted) Kalinga Company provided the following information at year-end: Share capital $8,000,000 _ Share premium 5,000,000 Treasury shares, at cost 2,000,000 Actuarial loss on defined benefit plan 1,000,000 Retained earnings unappropriated 6,000,000 Retained earnings appropriated 3,000,000 Revaluation surplus 4,000,000 Cumplative translation adjustment - eredit 1,500,000 "| What amount st ld be reported as total shareholders’ equity? _ a 31,500,000 ib, 32,500,000 c. 28,500,000 d. 25,500,000 Solution 1-17 Answer a ‘Share capital 15,000,000 ‘Share premium 5,000,000 Retained tarnings unappropriated 6,000,000 Retained earnings appropriated 3,000,000 Revaluation surplus 4,000,000 Curulative translation adjustment - credit 1,500,000 Actuarial loss on defined benefit plan. ( 1,000,000) ‘Treasury shares, at cost (2,000,000) ‘Total shareholders’ equity 31,500,000 The actuarial loss on defined benefit plan is reported as through profit or boss but should be reported as a deduction from ‘component of other comprehensive income. Cash 400,000 The eredit in the cumulative translation adjustment account isa Figancial at sxects at fair value (1,000,000 - 300,000) 700,000 translation gain reported as component of other comprehensive income. Accounts receivable 3,500,000 Inventory 1,500,000 ‘ifthe cumulative translation adjustment account has debi balance, itis ‘Tote! current axeets £300,000 a translation loss. nvProblem 1-18 (LAA) Silver Compmiy provided the following information at year-en,j é ‘ise ‘Share ur i pele: payable 1,100,059, Preference share capital, at par 2,000,009 Ordinary share capital, at pat 3,000 699, Sales 10,000, ‘Total expenses 7,800 009 ‘Treasury shares at cost - ordinary 500,000 Dividends 700.000 ‘Retuined carnings - beginning 1,000,009 ‘What total shareholders’ equity should be reported at year-end? a 8,000,000 8,500,000 ¢. §,800,000 4. 8,700,000 Solusion |-18 Answer a ian 10,000,000 Tete eepesaes «3,800,000, Net income 2.200.000 Retained camiags - January 1 1000.00 Dividends ( 700'000; Retained earnings — December 31 Preference share capital 2,000,000 Ordinary share capital 3,000,000 ‘Share gremium 1,000,000 Retained cernings 2,500,000 ‘Treasury shares at cost (500,000) Total sharebolders' equity Problem 1-19(AICPA Adapted) ‘Mont Company reported net asaets totaling P8,750,000 at year-end which included the following: ; | Treasury shares of Mont Company at cost beeed Idle machinery eae ‘Trademark 50,000 Allowance for inventory writedown 200,000 ‘What amount should be reported as met assets at year-end? | = 2,500,000 b. 3,400,000 c. 8,300,000 d. 8,200,000 Solution 1-19 Answer a «| Reported met assets 3,750,000 ‘Treasury shares (_250,000) Adjusted net assets 13,500,000 The treasury shares are not ussets but should be deducted from total shareholders’ equity. ‘The ile machinery, trademark and allowance for inventory writedown ‘ate properly included in the computation of net assets,Problem 1-20(AICPA Adapted) Prsze Cormpany provided the following information at year.<.4 Cash and cash equivalents 4 Accounts receivable, net of allowance P100,000 0, 2,000,099 Inventory ; . 6.000 Property, plamt, und equipment al carrying amount 12,000,00n Accounts payable 4,400.0 ‘Wages payable 1,800 509 ‘Share capital 6,000,091, ‘Share premium 4,000 000 The only asset not isted ts short-term investment, The only Tiabilities not listed are a P3,000,000 note payable due in two years and related accrued interest of Pt 00,000 due in four months. ‘The current ratio at year-end is 15 to 1.00, L.Whatis the amount of current liabilities? © Solution 1-20 s Question | Answer b Accounts payable Wages payable Accrued interest payable ‘Total current liabilities: Question 2 Answer ¢ ‘Current liabilities ‘Multiply by curcent ratio Total current asscts Cash and cash equivalents Accounts receivable | dventory ‘Short-term investment Question 3 Answer a Current assets Property, plant and equipment Total assets ‘Current liabilities Note payable - noscurrent ‘Share capital . Share premium Retained carnings ( 6,000,000) ( 3,000,000) ‘( 6,000,000) {_4,000,000)