ACTIVITY 1
PROBLEM 2-2 (IAA)
Socorro Corporation
Statement of Financial Position
December 31, 2019
Current Assets:
Cash and cash equivalents
Trade and other receivable
Inventories
Prepaid expenses
Total current assets
ASSETS
Note
(1)
(2)
Noncurrent assets:
Property, plant and equipment
Long-term Investment
Investment property
Intangible assets
Other noncurrent assets
Total noncurrent assets
Total assets
700,000
700,000
600,000
50,000
2,050,000
(3)
(4)
(5)
(6)
(7)
(8)
4,150,000
1,000,000
500,000
550,000
450,000
6,650,000
8,700,000
EQUITY AND LIABILITIES
Current liabilities:
Trade and other payables
Serial bonds payable-current
portion
Total current liabilities
(9)
100,000
920,000
Noncurrent liabilities:
Serial bonds payable-remaining portion
Unearned leasehold income-remaining
portion
Total noncurrent liabilities
Equity:
Share capital
Reserves
Retained earnings
Treasury shares, at cost
820,000
(10)
(11)
(12)
400,000
280,000
680,000
5,150,000
1,050,000
1,200,000
(300,000)
Total equity
Total liabilities and equity
7,100,000
8,700,000
Note 1 - Cash and cash
equivalents
Cash
Money market placement
Total
500,000
200,000
700,000
Note 2 - Trade and other
receivable
Accounts receivable
Allowance for doubtful accounts
Total trade and other receivable
750,000
(50,000)
700,000
Note 3 - Prepaid Expenses
Store supplies
50,000
Note 4 - Property, plant and
equipment
Land
Building
Equipment
Total
Accumulated
Cost
depreciation
400,000
3,500,000
500,000
1,000,000
250,000
4,900,000
750,000
Note 5 - Long-term Investment
Investment in bonds
Book
value
400,000
3,000,000
750,000
4,150,000
1,000,000
Note 6 - Investment property
Land for undetermined use
500,000
Note 7 - Intangible assets
Trademark
Patent
Total
300,000
250,000
550,000
Note 8 - Other noncurrent assets
Advances to officers
Restricted foreign deposit
150,000
300,000
Total
450,000
Note 9 - Trade and other
payables
Accounts payable
Note payable
Income tax payable
Unearned leasehold income-current portion
Total
500,000
100,000
150,000
70,000
820,000
Note 10 - Common stock
Share capital issued
Stock divident payable
Total
5,000,000
150,000
5,150,000
Note 11 - Reserves
Share premium
Retained earnings appropriated for plant expansion
Retained earnings appropriated for treasury
share
Total reserves
300,000
1,050,000
Note 12 - Retained earnings
Retained earnings
upappropriated
Appropriation for treasury share
Adjusted balance
1,500,000
300,000
1,200,000
250,000
500,000
Problem 2-4 (AICPA Adapted)
Boracay Company
Statement of Financial Position
December 31,2019
ASSETS
Note
(1)
Current Assets:
Cash and cash equivalents
Financial assets at fair value
Trade receivables
(2)
Inventory (1,300,000 - 50,000 - 250,000)
Prepaid Expenses
(3)
1,200,000
400,000
1,000,000
1,000,000
50,000
Total current assets
3,650,000
Noncurrent assets:
Property, plant and
equipment
Goodwill
Total noncurrent assets
Total assets
(4)
3,950,000
100,000
4,050,000
7,700,000
EQUITY AND LIABILITIES
Current liabilities:
Trade and other payables
(5)
2,050,000
Noncurrent liabilities:
Mortgage payable
Equity:
Ordinary share capital
Share premium
Retained earnings
Total equity
Total liabilities and equity
2,000,000
(6)
3,000,000
200,000
450,000
3,650,000
7,700,000
Note 1 - Cash and cash
equivalents
Cash in bank
Money market placement
Total
700,000
500,000
1,200,000
Note 2 - Trade receivables
Accounts receivable
Notes receivable
Total
800,000
200,000
1,000,000
Note 3 - Prepaid Expenses
Office supplies
50,000
Note 4 - Property, plant and
equipment
Land
Building
Office equipment
Total
Cost
1,000,000
3,000,000
250,000
4,250,000
Accumulated
depreciation
300,000
300,000
Note 5 - Trade accounts and other payables
Accounts payable
Withholding tax payable
Accrued salaries payable
Accrued interest payable
Total
Note 6 - Retained earnings
Net assets per book
Contributed capital
Unadjusted retained earnings
Unrecorded expenses:
Salaries
Deppreciation on building
(3,000,000/20x2)
Total
250,000
300,000
1. Total current assets? D
600,000
2,800,000
2,000,000
(500,000)
4,900,000
2. Total current liabilities? A
Accounts payable and accrued
liabilities
Income tax payable
Total current liabilities
1,500,000
100,000
250,000
200,000
2,050,000
4,200,000
3,200,000
1,000,000
Problem 2-18 (AICPA Adapted)
Cash
Accounts receivable
Inventory
Accounts receivable - installments
(125,000 x 4)
Total current assets
Carrying
amount
1,000,000
2,700,000
250,000
3,950,000
1,800,000
900,000
2,700,000
550,000
450,000
3. Retained earnings? C
Net sales and other revenue
Costs and expenses
Income before income tax
Income tax (30% x 5,000,000)
Net income
Retained earnings - January 1
Retained earnings - December 31
15,000,000
(10,000,000)
5,000,000
1,500,000
3,500,000
3,500,000
7,000,000
PROBLEMS
Problem 3-1 Multiple choice (PAS 1)
1.
2.
3.
4.
5.
D
A
C
C
B
Problem 3-2 Multiple choice (IAA)
1.
2.
3.
4.
5.
6.
B
D
D
B
D
D
Problem 3-3 Multiple choice (AICPA Adapted)
1.
2.
3.
4.
5.
6.
7.
8.
A
C
B
D
C
B
C
A