MINDANAO STATE UNIVERSITY - GENERAL SANTOS CITY

DEPARTMENT OF ACCOUNTANCY

ACT114: INTERMEDIATE ACCOUNTING 3

STATEMENT OF FINANCIAL POSITION

Practice questions:

1. K Corporation’s trial balance reflected the following account balances at December 31,
2019:

Accounts Receivable P200,000

Trading Securities 100,000

Accumulated Depreciation 300,000

Cash and Cash Equivalents 150,000

Inventory 500,000

Equipment and Furniture 1,000,000

Patent 50,000

Prepaid Expenses 20,000

Land held for future business site 250,000

In East Corporation’s December 31, 2018 statement of financial position, the current assets
total is?

2. The December 31, 2018 statement of financial position of J Company showed the following
current assets:

Cash and cash equivalent P700,000

Accounts receivable 1,200,000

Inventories 600,000

Total P2,500,000

An examination of the accounts revealed that the accounts receivable include the following:

Trade accounts P930,000

Allowance for Doubtful Accounts (20,000)

Claim against the shipper for goods lost in transit 30,000

Selling price for unsold goods sent by J on consignment

 at 130% of cost and not included in J’s ending inventory 260,000

What is the correct amount of current assets?

3. The statement of financial position of K Company on December 31, 2018 contained the
following current assets:

Cash including sinking fund of P500,000 with trustee P1,500,000

Accounts receivable 3,000,000

Inventory, including P200,000 cost of goods in transit purchased

FOB point of Destination. The goods are received January 5, 2018 2,000,000

The balance of the accounts receivable disclosed the following:

Trade accounts P2,500,000

Advances to officers not collectible currently 400,000

Dividends receivable 100,000

The current assets on December 31, 2018 should be?

4. The December 31, 2019, statement of financial position of J Company contained the
following current assets:

Cash and cash equivalents P1,800,000

Accounts receivable 1,500,000

Inventories 1,700,000

Prepaid expenses 200,000

An examination revealed that accounts receivable consisted of the following items:

Customer’s accounts P1,050,000

Employee’s account - current 150,000

Advances to subsidiary - long-term investment 250,000

Allowance for uncollectible accounts (50,000)

Subscription receivable - not collectible currently 100,000

On December 31, 2019, J Company should report total current assets of?

5. The following is K Corporation’s June 30, 2019 trial balance:

 Cash overdraft P100,000

Accounts Receivable - net 350,000

Inventory 580,000

Prepaid expenses 120,000

Land held for Sale 1,000,000

PPE - net 950,000

Accounts Payable and accrued expenses 320,000

Ordinary shares 250,000

Share premium 1,500,000

Retained earnings 830,000

Checks amounting to P300,000 were written to vendors and recorded on June 29, 2019,
resulting in a cash overdraft of P100,000. The checks were mailed on July 9, 2019. Land held
for sale was sold for cash on July 15, 2019.

K issued its financial statements on July 31, 2019. In its June 30 2019, statement of financial
position, what should K report as current assets?

6. The following data are available for purposes or stating the financial position of J Company
on December 31, 2019:

Cash, including sinking fund of P500,000 with trustee P2,000,000

Notes receivable (P200,000 pledged) 1,200,000

Accounts receivable - assigned 800,000

Notes receivable discounted 700,000

Equity of assignee in accounts receivable assigned 500,000

Inventory, including P600,000 cost of goods in transit

purchased FOB Destination. The goods were received

on January 15, 2020 2,800,000

Allowance for doubtful accounts 100,000

How much current assets should be shown in the statement of financial position as of
December 31, 2019?

7. The trial balance of K Company included the following balances at December 31, 2019:

Accounts Payable P150,000

Bonds Payable, due 2020 250,000

 Discount on Bonds Payable 30,000

Dividends payable 80,000

Note Payabale to bank due 2021 200,000

What amount should be included in the current liability section of K Company’s December 31,
2019 statement of financial position?

8. J Company provides the following on December 31, 2019:

Accounts payable P200,000

Stock dividend payable 100,000

Dividend in arrears 50,000

Accrued expenses 10,000

Unearned interest income 5,000

Mortgage payable 150,000

Customer’s deposit 20,000

Appropriation reserve 25,000

Income tax withheld 15,000

Income tax payable 30,000

The amount of current liabilities is?

9. K Company’s current liabilities at December 31, 2019, totaled P1,500,000 before any
necessary year-end adjustment relating to the following:

 On December 23, 2019, a vendor authorized K to return, full credit, goods shipped and
billed at P45,000 on December 20, 2019. The returned goods were shipped by K on
December 29, 2019. A P45,000 credit memo was received and recorded by K on January
7, 2020.

 During December 2019, K received P75,000 from M, a customer, as an advance payment

for bottling machine which K will construct to M’s specifications. From this transaction, K
has a P75,000 credit balance in its accounts receivable from M at December 31, 2019.

At December 31, 2019, what amount should K report as total current liabilities?

10. The following data pertain to J Company on December 31, 2019:

Trade accounts payable, including cost of goods received

 on consignment of P150,000 P1,350,000

Accrued tax payable 125,000

Stock dividend payable 300,000

Customer’s deposit 100,000

J Company as guarantor 200,000

Bank overdraft 55,000

Accrued electric and power bills 60,000

Reserve for contingencies 150,000

How much should be shown as current liabilities in the statement of financial position of J
Company on December 31, 2019?