5. Poof Co. has total current liabilities of P3,120,000 on Dec. 31 20x1 before possible adjustment for the following: Poof Co.'s authorized capitalization was fully issued. During the Poof Co. filed an amended Articles of Incorporation year, with the Securities and Exchange Commission (SEC) increasing its authorized capitalization. Although the SEC's approval was not yet received, Poof Co. started receiving deposits for future subscription of its shares. A total of P480,000 were collected and credited to "Subscribed Capital." Per agreement with the subscribers, the deposits are to be reimbursed immediately if in case the SEC rejects Poof Co.s application for increased capitalization. Poof Co. expects to receive the SEC's decision in April 20x2. Included in the total current liabilities is a bank loan of P600,000 that is maturing on July 1, 20x2. On February 14, 20x2, Poof Co. entered into a refinancing agreement with the bank to extend the repayment of the loan to July 1, 20x5. The original loan agreement provides for such renewal option, and as of Dec. 31, 20x1, Poof Co. has complied with all the conditions relating to the extension of the loan repayment. Poof Co.'s financial statements were authorized for issue on March 15, 20x2. %3D How much is the adjusted total current liabilities on Dec. 31, 20x1? a. 2,520,000 b. 3,000,000 c. 3,120,000 d. 3,600,000
5. Poof Co. has total current liabilities of P3,120,000 on Dec. 31 20x1 before possible adjustment for the following: Poof Co.'s authorized capitalization was fully issued. During the Poof Co. filed an amended Articles of Incorporation year, with the Securities and Exchange Commission (SEC) increasing its authorized capitalization. Although the SEC's approval was not yet received, Poof Co. started receiving deposits for future subscription of its shares. A total of P480,000 were collected and credited to "Subscribed Capital." Per agreement with the subscribers, the deposits are to be reimbursed immediately if in case the SEC rejects Poof Co.s application for increased capitalization. Poof Co. expects to receive the SEC's decision in April 20x2. Included in the total current liabilities is a bank loan of P600,000 that is maturing on July 1, 20x2. On February 14, 20x2, Poof Co. entered into a refinancing agreement with the bank to extend the repayment of the loan to July 1, 20x5. The original loan agreement provides for such renewal option, and as of Dec. 31, 20x1, Poof Co. has complied with all the conditions relating to the extension of the loan repayment. Poof Co.'s financial statements were authorized for issue on March 15, 20x2. %3D How much is the adjusted total current liabilities on Dec. 31, 20x1? a. 2,520,000 b. 3,000,000 c. 3,120,000 d. 3,600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Solve and explain why it is the answer.
Transcribed Image Text:5. Poof Co. has total current liabilities of P3,120,000 on Dec. 31
20x1 before possible adjustment for the following:
Poof Co.'s authorized capitalization was fully issued. During
the year, Poof Co. filed an amended Articles of Incorporation
with the Securities and Exchange Commission (SEC)
increasing its authorized capitalization. Although the SEC's
approval was not yet received, Poof Co. started receiving
deposits for future subscription of its shares. A total of
P480,000 were collected and credited to "Subscribed Capital."
Per agreement with the subscribers, the deposits are to be
reimbursed immediately if in case the SEC rejects Poof Co.'s
application for increased capitalization. Poof Co. expects to
receive the SEC's decision in April 20x2.
Included in the total current liabilities is a bank loan of
P600,000 that is maturing on July 1, 20x2. On February 14,
20x2, Poof Co. entered into a refinancing agreement with the
bank to extend the repayment of the loan to July 1, 20x5. The
original loan agreement provides for such renewal option, and
as of Dec. 31, 20x1, Poof Co. has complied with all the
conditions relating to the extension of the loan repayment.
Poof Co.'s financial statements were authorized for issue on
March 15, 20x2.
How much is the adjusted total current liabilities on Dec, 31, 20x1?
a. 2,520,000
b. 3,000,000
c. 3,120,000
d. 3,600,000
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