BALANCE SHEET

CASE 1 Shaw Company provided the following trial balances on December 31, 2017 which had been adjusted
except for income tax expense:

Cash 675,000
Accounts receivable 2,695,000
Inventory 2,185,000
Property, plant, and equipment 10,245,000
Accounts payable and accrued liabilities 1,800,000
Income tax payable 1,500,000
Deferred tax liability 750,000
Share capital 2,500,000
Share premium 3,000,000
Retained earnings, January 1 3,350,000
Net sales and other revenue 15,000,000
Costs and expenses 10,000,000
Income tax expense _2,100,000 _________
27,900,000 27,900,000

The accounts receivable included P1,000,000 due from a customer and payable in quarterly instalments of
P125,000. The last payment is due December 30, 2019. During the year, estimated tax payments of P600,000
was charged to income tax expense. The income tax rate is 30%. On December 31, 2017, what amount should
be reported as

1. Total current assets?

2. Total current liabilities?

CASE 2 Kabugao Company provided the following data on December 31, 2017:

Cash in bank, net of bank overdraft of P500,000 5,000,000

Petty cash, unreplenished petty cash expenses P10,000 50,000
Notes receivable 4,000,000
Accounts receivable, net of accounts with credit balances of P1,500,000 6,000,000
Inventory 3,000,000
Bond sinking fund 3,000,000
Total current assets 21,050,000

Accounts payable, net of accounts with debit balances of P1,000,000 7,000,000

Notes payable 4,000,000
Bonds payable due June 30, 2018 3,000,000
Accrued expenses 2,000,000
Total current liabilities 16,000,000

1. What total amount should be reported as current assets on December 31, 2017?
2. What total amount should be reported as current liabilities on December 31, 2017?
CASE 3 Mint Company provide the following account balances on December 31, 2017 which had been
adjusted except for income tax expense:

Cash 600,000
Accounts receivable, net 3,500,000
Cash in excess of billings on long-term contracts 1,600,000
Billings in excess of cost on long-term contracts 700,000
Prepaid taxes 450,000
Property, plant, and equipment, net 1,510,000
Note payable, noncurrent 1,620,000
Share capital 750,000
Share premium 2,030,000
Retained earnings unappropriated 900,000
Retained earnings restricted for note payable 160,000
Earnings from long-term contracts 6,680,000
Costs and expenses 5,180,000

All receivables on long-term contracts are considered to be collectible within 12 months. During the year,
estimated tax payments of P450,000 were charged to prepaid taxes. The entity has not recorded income tax
expense. The tax rate is 30%. On December 31, 2017, what amount should be reported as

1. Total retained earnings?

2. Total noncurrent liabilities?
3. Total current assets?
4. Total shareholders’ equity?

INCOME STATEMENT

CASE 4 Argentina Company incurred the following costs and expense during the current year:

Raw materials purchases 4,000,000

Direct labor 1,500,000
Indirect labor- factory 800,000
Factory repairs and maintenance 200,000
Taxes on factory building 100,000
Depreciation- factory building 300,000
Taxes on salesroom and general office 150,000
Depreciation- sales equipment 50,000
Advertising 400,000
Sales salaries 500,000
Office salaries 700,000
Utilities- 60% applicable to factory 500,000

Beginning Ending
Raw materials 300,000 450,000
Work in process 400,000 350,000
Finished goods 500,000 700,000
1. What is the cost of raw materials used?
2. What is the cost of goods manufactured for the current year?
3. What is the cost of goods sold for the current year?

CASE 5 Condo Company reported the following total debits and total credits in selected accounts after closing
entries were posted:

Debits Credits
Materials 600,000 200,000
Goods in process 500,000 300,000
Materials purchases 2,500,000 2,500,000
Purchased discounts 100,000 100,000
Transportation in 200,000 200,000
Direct labor 3,000,000 3,000,000
Manufacturing overhead 1,500,000 1,500,000
Finished goods 700,000 400,000

1. What is the cost of raw materials used?

2. What is the cost of goods manufactured?
3. What is the cost of goods sold for the year?

CASE 6 Divina Company provided the following information for the current year:

Income from continuing operations 4,000,000

Income from discontinued operation 500,000
Unrealized gain on financial asset- FVPL 800,000
Unrealized loss on equity investment- FVOCI 1,000,000
Unrealized gain on debt investment- FVOCI 1,200,000
Unrealized gain on futures contract designated as a cash flow hedge 400,000
Translation loss on foreign operation 200,000
Net remeasurement gain on defined benefit plan 600,000
Loss on credit risk of a financial liability at FVPL 300,000
Revaluation surplus during the year 2,500,000

1. What amount should be reported as net income for the current year?
2. What net amount should be reported as OCI for the current year?
3. What amount should be reported as comprehensive income for the current year?

CASH FLOWS

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CASE 8 Mountain Company provided the following information:
2017 2016
Cash and cash equivalents 5,600,000 7,400,000
Accounts receivable 3,000,000 3,500,000
Inventory 8,000,000 6,500,000
Prepaid expenses 400,000 600,000
 Property, plant, and equipment 55,000,000 42,000,000
Accumulated depreciation (20,000,000) (16,000,000)
Accounts payable 6,000,000 9,500,000
Accrued expenses 1,500,000 500,000
Note payable- bank (current) 2,000,000 5,000,000
Note payable- bank (noncurrent) 10,000,000
Ordinary share capital 30,000,000 30,000,000
Retained earnings 2,500,000 (1,000,000)

Cash needed to purchase new equipment was raised by borrowing from the bank with a long-term note.
Equipment costing P2, 000,000 and carrying amount of P1, 500,000 was sold for P1,800,000. The entity paid
cash dividend of P3, 000,000 in 2017.

1. What is the net cash provided by operating activities?

2. What is the net cash used in investing activities?
3. What is the net cash provided by financing activities?

CHANGES IN EQUITY

CASE 9 An entity was organized at the beginning of current year with 100,000 authorized shares of P100 par
value. During the current year, the following transactions occurred:

January 1 Sold 30,000 shares at P150 per share

February 1 Issued 2,000 shares for legal services with a fair value of P250,000. The shares
on this date are quoted at P140 per share.
March 1 Purchased 5,000 treasury shares at a cost of P120 per share
October 31 Issued P5,000,000 convertible bonds at 120. The bonds are quoted at 98 without
the conversion feature.
November 15 Declared a 2-for-1 share split when the market value of the share was P160.
December 15 Sold 10,000 shares at P75 per share
December 31 the net income for the year was P2,000,000

1 What amount should be reported as share capital at year-end?

2 What amount should be recognized as share premium at year-end?
3 What is the total shareholders’ equity at year-end?
4 How many shares are outstanding at year end?