Liability 08.19.2022 Exercise 1.
1. On December 31, 2018, the bookkeeper of Grand Company provided the following information:
Accounts Payable, including the deposits and advances from
customers of P500,000
Notes Payable, including note payable to bank due on December 31,2020
For P1,000,000
Share dividends payable
Credit balance in customers accounts
Serial bonds, payable in semiannual installments of P1,000,000
Accrued interest on bonds payable
Contested BIR Tax assessment
Unearned rent income
P2,500,000
3,000,000
800,000
400,000
10,000,000
300,000
600,000
100,000
In the December 31, 2018 Balance Sheet, how much current liabilities should be
reported?_________
2. An analysis of Cool Company’s liabilities disclosed the following:
Accounts Payable, after deducting debit balances in suppliers accounts
amounting to P22,500 (accounts payable included non-trade
liabilities of P32,500)
P
Accrued Expenses
Credit balances of customers accounts
Stock dividends payable
Claims for increase in wages and allowances by employees of
the company, covered in a pending lawsuit
Estimated liabilities for premiums
105,000
15,000
13,500
70,000
125,000
60,000
How much should be presented as total current liabilities in the balance sheet?__________
3. The balance in Coward Company’s accounts payable account at December 31, 2018 was
P1,170,000 before any year-end adjustments relating to the following:
a. Goods were in transit from a vendor to Coward on December 31, 2018. The invoice cost
was P65,000 and the goods were shipped FOB shipping point on December 29, 2018.
The goods were received on January 2, 2019.
b. Goods shipped FOB shipping point on December 20, 2018 from a vendor to Coward,
were lost in transit. The invoice cost was P32,500. On January 5, 2019, Coward filed a
P32,500 claim against the common carrier.
c. Good shipped FOB destination on December 21, 2018, from a vendor to Coward, were
received on January 6, 2019. The invoice cost was P19,500.
What amount should Coward report as accounts payable on its December 31, 2018 Balance
Sheet?
4. The following information pertains to Malabon Company as at September 30, 2022.
Notes Payable-bank
P
3,500
Accounts payable arising from purchase of goods
112,500
Dividends in arrears of preference shares, note yet declared
25,000
Share dividends payable
20,000
Income tax payable`
13,400
Accrued liabilities
4,200
Mortgage payable
225,000
Customers deposits
8,900
Reserve for contingencies
25,000
Based on the above data, what is the total amount of actual liabilities to be reported on the
balance sheet of September 30, 2022? _______________
5. Carr Company pays its outside salespersons fixed monthly salaries and commissions on net
sales. Sales commissions are computed and paid on a monthly basis ( in the month following the
month of sale) this purpose. However, if the fixed salaries for salespersons exceed their sales
commissions earned for a month, such excess is not charged back to them. Pertinent data for
the month of March 2022 for the three salesperson in sales region 101 are as follows:
Salesperson
A
B
C
Fixed Salary
P 2,500
P 3,500
p 4,500
P
Net Sales
100,000
200,000
300,000
Commission rate
2%
3%
3%
In respect of sales region 101, what total amount should Carr accrue for sales commissions
payable at March 31, 2022?__________________