EXERCISES – Statement of Financial Position

Problem 1
Genesis’ trial balance reflected the following account balances on December 31, 2021:
Cash in Bank – RCBC 200,000
Accounts Receivable 750,000
Inventory 600,000
Prepaid Insurance 120,000
Prepaid Rent (P120,000 per year for the next 3 years) 360,000
Financial assets at fair value through profit or loss 150,000
Financial assets at fair value through other comprehensive income 300,000
Financial assets at amortized cost 500,000
Deferred tax asset 75,000
Bank overdraft – RCBC 125,000
Machinery 400,000
Accumulated Depreciation 100,000
Noncurrent assets held for sale- Land 325,000
Building used as a plant site 460,000

Required: How much is the total current assets and noncurrent assets for the year ended
December 31, 2021?
Cash (P200,000 minus P125,000 bank overdraft) 75,000
Accounts receivable 750,000
Inventory 600,000
Prepaid insurance 120,000
Prepaid rent – current portion 120,000
Financial assets at fair value through profit or loss (FVTPL) 150,000
Noncurrent assets held for sale – Land 325,000
Total Current Assets 2,140,000

Prepaid rent – noncurrent portion 240,000

Financial assets at fair value through OCI 300,000
Financial assets at amortized cost (FAAC) 500,000
Deferred tax asset 75,000
Machinery 400,000
Accumulated depreciation (100,000)
Building used as a plant site 460,000
Total Non-current Assets 1,875,000

Problem 2
Exodus Company’s trial balance reflected the following account balances on December 31, 2021:
Cash, net of company’s post-dated check of P50,000 P470,000
Bank overdraft – NFCPAR Bank 90,000
Accounts Receivable, net of customer’s credit balance of P30,000 220,000
Accounts payable, net of debit balance in supplier’s accounts amounting 325,000
to P25,000
Bonds Payable 1,700,000
Discount on bond’s payable 100,000
Deferred tax liability 200,000
Property dividends payable 200,000
Income tax payable 150,000
Note payable, due January 31, 2023 250,000
Contingent liability 75,000
Share dividends payable 160,000
Cash dividends payable 40,000
Financial liabilities at FVTPL 65,000
Reserve for contingencies 215,000
Estimated expenses of meeting warranties 167,500
 Estimated damages as a result of unsatisfactory performance on a 134,000
contract
Mortgage payable 500,000
Loans payable (payable in four equal annual installment) 250,000
The bank overdraft is part of the cash management strategy of the company.
Required: Determine the total current and noncurrent liabilities for the year ended
December 31, 2021.
Accounts payable (P325,00 + P50,000 + P25,0000) 400,000
Customer’s credit balance 30,000
Property dividends payable 200,000
Income tax payable 150,000
Cash dividends payable 40,000
Financial liabilities at FVTPL 65,000
Estimated expenses of meeting warranties 167,500
Estimated damages as a result of unsatisfactory performance 134,000
on a contract
Loans payable – current (P250,000/4) 62,500
Total Current Liabilities 1,249,000

Bonds payable 1,700,000

Discount on bonds payable (100,000)
Deferred tax liability 200,000
Note payable, due January 31, 2023 250,000
Mortgage payable 500,000
Loans payable – noncurrent (P250,000 – P62,500) 187,500
Total Non-current liabilities 2,737,500

Problem 3
Leviticus Company’s trial balance reflected the following account balances on December 31, 2021:
Ordinary share capital P5,000,000
Share premium 500,000
Subscribed ordinary share 50,000
Subscriptions receivable 20,000
Treasury shares, at cost 1,000,000
Unrealized loss on fair value through other comprehensive 500,000
income securities
Retained earnings unappropriated 3,000,000
Retained earnings appropriated for building expansion 1,500,000
Revaluation Surplus 2,000,000
Cumulative translation adjustment - credit 750,000

Required: How much is the total shareholders’ equity for the year ended December 31,
2021?
Ordinary share capital 5,000,000
Share premium 500,000
Subscribed ordinary share 50,000
Subscriptions receivable (20,000)
Retained earnings unappropriated (P3M – P1M cost of treasury) 2,000,000
Reserves:
Retained earnings appropriated for treasury shares 1,000,000
Retained earnings appropriated for building expansion 1,500,000
Unrealized loss on fair value through OCI (500,000)
Revaluation surplus 2,000,000
Cumulative translation adjustment - credit 750,000
Total 12,280,000
Less: Treasury shares 1,000,000
Total Shareholders’ Equity 11,280,000
Problem 4
Easy Company provided the following information on December 31, 2021:

Accounts payable 350,000

Accounts receivable 450,000
Property, plant and equipment 5,600,000
Accumulated depreciation 1,200,000
Mortgage payable, due in 5 years 1,500,000
Share capital, P100, par 4,000,000
Share premium 500,000
Cash and cash equivalents 800,000
Accrued expenses 100,000
Inventories 900,000
Long-term investments 950,000
Note payable, long-term debt 500,000
Note payable, short term debt 200,000
Office supplies unused 50,000
Patent 800,000
Prepaid rent 150,000
Retained earnings 1,350,000

Required: Prepare in good form a properly classified statement of financial position in

accordance with Philippine Financial Reporting Standards.

Easy Company
Statement of Financial Position
December 31, 2021

ASSETS
Note 1
Current assets:
Cash and cash equivalents 800,000
Accounts receivable 450,000
Inventories 900,000
Prepaid expenses (1) 200,000 2,350,000
Noncurrent assets:
Property, plant and equipment (2) 4,400,000
Long-term investments 950,000
Intangible asset (3) 800,000 6,150,000
Total Assets 8,500,000

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Trade and other payables (4) 450,000
Note payable, short-term debt 200,000 650,000
Noncurrent liabilities:
Mortgage payable, due in 5 years 1,500,000
Note payable, long-term debt 500,000 2,000,000
Total Liabilities 2,650,000

Shareholders’ equity:
Share capital, P100 par 4,000,000
Share premium 500,000
Retained earnings 1,350,000
Total Shareholders’ Equity 5,850,000
Total liabilities and shareholders’ equity 8,500,000
Note 1 – Prepaid expenses
 Office supplies unused 50,000
Prepaid rent 150,000
Total prepaid expenses 200,000

Note 2 – Property, plant and equipment

Property, plant and equipment 5,600,000
Accumulated depreciation (1,200,000)
Net book value 4,400,000

Note 3 – Intangible asset

Patent 800,000

Note 4 – Trade and other payables

Accounts payable 350,000
Accrued expenses 100,000
Total 450,000