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3. An entity reports total current assets of P3,000,000, total noncurrent assets of P7,000,000, total liabilities of P4,000,000, and profit of P2,000,000 for the year ended December 31, 20x1. The entity's financial statements are authorized for issue on April 3, 20x2. The following events took place after December 31, 20x1: a. Equipment with carrying amount of P300,000 was sold for P380,000 on January 2, 20x2. Because of the sale, the entity included the equipment in the current assets section of the December 31, 20x1 statement of financial position. As of December 31, 20x1, the entity's management has no plan on selling the equipment. The sale is properly recorded in 20x2. b. A notice of collection was received from a bank on January 31, 20x2. Apparently, the debtor, whose P500,000 bank loan was guaranteed by the entity, defaulted in its 3rd and

3. An entity reports total current assets of P3,000,000, total noncurrent assets of P7,000,000, total liabilities of P4,000,000, and profit of P2,000,000 for the year ended December 31, 20x1. The entity's financial statements are authorized for issue on April 3, 20x2. The following events took place after December 31, 20x1: a. Equipment with carrying amount of P300,000 was sold for P380,000 on January 2, 20x2. Because of the sale, the entity included the equipment in the current assets section of the December 31, 20x1 statement of financial position. As of December 31, 20x1, the entity's management has no plan on selling the equipment. The sale is properly recorded in 20x2. b. A notice of collection was received from a bank on January 31, 20x2. Apparently, the debtor, whose P500,000 bank loan was guaranteed by the entity, defaulted in its 3rd and

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Requirements: Compute for the following:

a. Adjusted Current Assets

b. Adjusted Noncurrent Assets

c. Adjusted Liabilities

d. Adjusted Equity

e. Adjusted Profit

3. An entity reports total current assets of P3,000,000, total noncurrent assets of P7,000,000, total liabilities of P4,000,000, and profit of P2,000,000 for the ended December 31, 20x1. year The entity's financial statements are authorized for issue on April 3, 20x2. The following events took place after December 31, 20x1: a. Equipment with carrying amount of P300,000 was sold for P380,000 on January 2, 20x2. Because of the sale, the entity included the equipment in the current assets section of the December 31, 20x1 statement of financial position. As of December 31, 20x1, the entity's management has no plan on selling the equipment. The sale is properly recorded in 20x2. b. A notice of collection was received from a bank on January 31, 20x2. Apparently, the debtor, whose P500,000 bank loan was guaranteed by the entity, defaulted in its 3rd and
Transcribed Image Text:3. An entity reports total current assets of P3,000,000, total noncurrent assets of P7,000,000, total liabilities of P4,000,000, and profit of P2,000,000 for the ended December 31, 20x1. year The entity's financial statements are authorized for issue on April 3, 20x2. The following events took place after December 31, 20x1: a. Equipment with carrying amount of P300,000 was sold for P380,000 on January 2, 20x2. Because of the sale, the entity included the equipment in the current assets section of the December 31, 20x1 statement of financial position. As of December 31, 20x1, the entity's management has no plan on selling the equipment. The sale is properly recorded in 20x2. b. A notice of collection was received from a bank on January 31, 20x2. Apparently, the debtor, whose P500,000 bank loan was guaranteed by the entity, defaulted in its 3rd and
4th quarter payments in 20x1. The bank is collecting P500,000 from the entity. The entity has an outstanding account payable of $1,000. The account payable was converted to its peso equivalent of P40,000 using the exchange rate on December 31, 20x1. On February 16, 20x2, the exchange rate significantly increased to P60:$1. d. On March 1, 20x2, the entity receives notice that its loan application amounting to P2,000,000, which was filed on December 18, 20x1, was approved. The loan is a long-term loan. A building with carrying amount of P1,200,000 at the start of 20x1 was inappropriately depreciated during the year using an estimated useful life of 5 years instead of 15 years. The entity uses the straight line method of depreciation with no residual value. Requirements: Compute for the following: a. Adjusted current assets b. Adjusted noncurrent assets C. Adjusted liabilities d. Adjusted equity e. Adjusted profit C. e.
Transcribed Image Text:4th quarter payments in 20x1. The bank is collecting P500,000 from the entity. The entity has an outstanding account payable of $1,000. The account payable was converted to its peso equivalent of P40,000 using the exchange rate on December 31, 20x1. On February 16, 20x2, the exchange rate significantly increased to P60:$1. d. On March 1, 20x2, the entity receives notice that its loan application amounting to P2,000,000, which was filed on December 18, 20x1, was approved. The loan is a long-term loan. A building with carrying amount of P1,200,000 at the start of 20x1 was inappropriately depreciated during the year using an estimated useful life of 5 years instead of 15 years. The entity uses the straight line method of depreciation with no residual value. Requirements: Compute for the following: a. Adjusted current assets b. Adjusted noncurrent assets C. Adjusted liabilities d. Adjusted equity e. Adjusted profit C. e.
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