Statement of Financial Position- Problems that will amaze you PDF

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STATEMENT OF FINANCIAL POSITIONPROBLEM 1 :REQUIRED:Simple Company Statement of Financial Position December 31 , 2020 ASSETS Current Assets: Note Cash P420, Trading securities 250, Trade and other receivables (1) 620, Inventories (2) 1,250, Prepaid expenses (3) 20, Total Current Assets P2,560, Non-cu...

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STATEMENT OF FINANCIAL POSITION PROBLEM 1 : Simple Company provided the following account balances on December 31, 2020: Share capital Share premium Retained earnings Serial bonds payable (P500,000, due every July 1 of each year) Employees income tax payable Notes payable Accrued expenses Accrued interest on notes payable Income tax payable Allowance for doubtful accounts Advances from customers Accounts receivable Accumulated depreciation – building Accumulated depreciation – machinery Investment in Bonds Land Machinery Factory supplies Notes receivable Building Cash Claim receivable Finished goods Franchise Goods in process Prepaid insurance Raw materials Trading securities Tools Goodwill Plant expansion fund Accounts payable

P5,000,000 500,000 880,000 2,500,000 20,000 100,000 30,000 10,000 60,000 50,000 100,000 500,000 1,600,000 1,300,000 1,500,000 1,500,000 2,000,000 50,000 150,000 4,000,000 420,000 20,000 400,000 200,000 600,000 20,000 200,000 250,000 40,000 100,000 500,000 300,000

REQUIRED: Prepare a properly classified statement of financial position on December 31, 2020.

Simple Company Statement of Financial Position December 31, 2020 ASSETS Current Assets: Cash Trading securities Trade and other receivables Inventories Prepaid expenses Total Current Assets Non-current Assets: Property, plant and equipment Long-term investments Intangible assets Total Non-Current Assets Total Assets

Note (1) (2) (3)

(4) (5) (6)

P420,000 250,000 620,000 1,250,000 20,000 P2,560,000 4,640,000 2,000,000 300,000 P6,940,000 P9,500,000

LIABILITIES AND SHAREHOLDERS ’ EQUITY Current Liabilities: Trade and other payables (7) P620,000 Serial bonds payable – current portion 500,000 Total Current Liabilities P1,120,000 Non-current Liabilities: Serial bonds payable – remaining portion

P2,000,000

Shareholders’ Equity: Share capital Share premium Retained earnings Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity

P5,000,000 500,000 880,000 P6,380,000 P9,500,000

Note 1 – Trade and Other Receivables Accounts receivable Allowance for doubtful accounts Notes receivable Claim receivable Total Notes 2 – Inventories Finished goods Goods in process Raw materials Factory supplies Total Note 3 – Prepaid expenses Prepaid insurance Note 4 – Property, plant and equipment

P500,000 (50,000) 150,000 20,000 P620,000 P400,000 600,000 200,000 50,000 P1,250,000 P20,000

Land Building Machinery Tools Total

Cost Accum. Depr. P1,500,000 4,000,000 P1,600,000 2,000,000 1,300,000 40,000 P7,540,000 P2,900,000

Note 5 – Long-term investments Investment in bonds Plant expansion fund Total

Book Value P1,500,000 2,400,000 700,000 40,000 P4,640,000 P1,500,000 500,000 P2,000,000

Note 6 – Intangible Assets: Franchise Goodwill Total

P200,000 100,000 300,000

Note 7 – Trade and other payables Accounts payable Notes payable Income tax payable Advances from customers Accrued expense Accrued interest on notes payable Employees income tax payable Total

P300,000 100,000 60,000 100,000 30,000 10,000 20,000 P620,000

PROBLEM 2: Exemplar Company provided the following account balances on December 31, 2020: Accounts receivable Advances to officers – not currently collectible Sinking fund Building Long-term refundable deposit Cash and cash equivalents Cash surrender value Equipment Lease rights Accrued interest on notes receivable Inventories Land Land held for speculation Notes receivable Computer software Prepaid expenses Trading securities Unearned rent income Retained earnings (deficit) Share premium – preference Premium on bonds payable Preference share capital Share premium – Ordinary Notes payable SSS payable Accounts payable Accrued salaries Accumulated depreciation – building Accumulated depreciation – equipment Allowance for doubtful accounts Bonds payable Dividends payable Ordinary share capital Withholding tax payable Preference share redemption fund

P400,000 100,000 400,000 5,000,000 50,000 500,000 60,000 1,000,000 100,000 10,000 1,300,000 1,500,000 500,000 250,000 3,250,000 70,000 280,000 40,000 (1,800,000) 500,000 1,000,000 2,000,000 200,000 300,000 10,000 400,000 100,000 2,000,000 200,000 20,000 5,000,000 120,000 5,000,000 30,000 350,000

Required: Prepare a properly classified statement of financial position.

SOLUTIONS: EXEMPLAR COMPANY Statement of Financial Position December 31, 2020 ASSETS Current Assets: Cash and cash equivalents Trading securities Trade and other receivables Inventories Prepaid expenses Total Current Assets Noncurrent Assets: Property, plant and equipment Long-term investments Intangible assets Other noncurrent assets Total Noncurrent Assets Total Assets

Note P (1)

(2) (3) (4) (5)

500,000 280,000 640,000 1,300,000 70,000 P 2,790,000 P

5,300,000 1,310,000 3,350,000 150,000 P10,110,000 P12,900,000

LIABILITIES AND SHAREHOLDERS ’ EQUITY Current Liabilities: Trade and other payables (6) P 1,000,000 Total Current Liabilities P 1,000,000 Noncurrent Liabilities: Bonds payable Premium on bonds payable Total Noncurrent Liabilities Total Liabilities Shareholders Shareholders’’ Equity: Share capital Reserves Retained earnings (deficit) Total Shareholders ’ Equity Total Liabilities and Shareholders ’ Equity Note 1 – Trade and other receivables Accounts receivable Allowance for doubtful accounts Notes receivable Accrued interest on notes receivable Total

P

5,000,000 1,000,000 P 6,000,000 P 7,000,000

(7) (8)

P

7,000,000 700,000 (1,800,000) P 5,900,000 P12 P12,900,000 ,900,000

P400,000 (20,000) 250,000 10,000 P640,000

Note 2 – Property, plant and equipment Cost Acc. Dep. Book Value Land P 1,500,000 P P1,500,000 Building 5,000,000 2,000,000 3,000,000 Equipment 1,000,000 200,000 800,000 Total P7,500,000 P2,200,000 P5,300,000 Note 3 – Long Long-- term investments Land held for speculation Sinking fund Preference redemption fund Cash surrender value Total

P 500,000 400,000 350,000 60,000 P1,310,000

Note 4 – Intangible assets Computer software Lease rights Total

P3,250,000 100,000 P3,350,000

Note 5 – Other noncurrent assets Advances to officers, not collectible currently Long-term refundable deposit Total

P100,000 50,000 P150,000

Note 6 – Trade and other payables Accounts payable Notes payable Unearned rent income SSS payable Accrued salaries Dividends payable Withholding tax payable Total

P400,000 300,000 40,000 10,000 100,000 120,000 30,000 P1,000,000

Note 7 – Share capital Preference share capital Ordinary share capital Total

P2,000,000 5,000,000 P7,000,000

Note 8 – Reserves Share premium – preference Share premium – ordinary Total

P500,000 200,000 P700,000...