In the course of your audit of CUARESMA Inc. for the year ended December 31, 2016, you took note of the following information:
ITEMS
AUDIT NOTES
(a) Accounts payable – trade, P170,000
This amount is net of P30,000 accounts with debit balances.
(b) Notes payable – trade, P70,000
The notes are all with five-month term bearing interest at 15%.
P50,000 from the notes is dated September 1, while the rest
are dated November 3.
(c) Advance receipts from customers, P100,000
The goods pertaining to these advances will be delivered in
2017.
(d) Containers deposit, P50,000
This is an amount received from customers for returnable
containers.
(e) Notes payable – Mandarame Bank, P200,000
This is a long-term note for five years and are being paid off
at the rate of P4,000 per month (monthly payment include
interest).
(f) Dividends in arrears on cumulative preferred stocks,
P20,000
The company is yet to declare dividends since its last declared
and distributed dividends in 2017.
(g) Stock dividends payable on common stocks, P37,200
(h) Liabilities under guarantee agreement, P45,000
This pertains to CUARESMA’s guarantee of its employees’
bank loans. As per past experience, employees unlikely
default on their loan payments.
(i) Convertible bonds, P1,000,000
1,000 bonds are convertible to 10 ordinary shares. Amount
due on December 31, 2019.
(j) Notes payable – officers, P40,000
This is due in six months.
(k) Salaries and wages
Payroll for the period December 16, 2016 to January 15, 2017
amounted to P68,000.
(l) Notes receivable, P30,000
This note has been discounted in a bank on a withoutrecourse basis, where the company received cash of
P24,000.
(m) Output VAT, P246,000
Input VAT on purchases and other operating expenses
amounted to P164,000.
(n) Accounts receivable, P215,000
The accounts receivable is net of P12,300 customer credit
balances.
(o) Cash in banks, P115,000
The company’s cash in banks include a cash balance with
Mandarame Bank amounting to P125,000; with Magsalibatbat
Bank amounting to P55,000, and; an overdraft balance with
Mamusan Bank.
(p) Common stock warrants outstanding
Amount to date, P250,000
(q) Common stock options outstanding
Amount to date, P150,000
(r) Estimated warranty costs on goods sold, P46,000
This pertains to warranty costs on goods sold in 2015 and
2016.
(s) Installment notes payable, P75,000
This is for the equipment purchases, only one-third is due in
2017.
(t) Provision for losses
During the year, one of the manufacturing equipment of the
company exploded injuring a employee. The employee filed
claims for damages on November 3. There has still been no
resolution yet on the case as of the balance sheet date. The
company lawyers however believe that it is probable that the
company will be liable between P25,000 and P75,000.
(u) Deferred tax liability, P150,000
This refers to deferred tax liabilities on cumulative temporary
difference on taxable income and financial income which will
reverse evenly over the next year.
REQUIRED:
(a) How much is the total current liabilities?
(b) How much is the total noncurrent liabilities?
(c) How much is the total liabilities?