Homework Help is Here – Start Your Trial Now!
Business
Accounting
- adjusted total current liabilities

- adjusted total current liabilities

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Solve and explain the reason why it is the answer.
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
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
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS