Alexa Company is preparing its December 31, 2022 statement of financial position. The following items may be reported as either current of non-current liability: a. On December 15, 2022, AR JAY declared a cash dividend of P2.50 per share to shareholders of record on December 30. The dividend is payable on January 15, 2023. AR JAY has issued 1,000,000 ordinary shares, of which 50,000 shares are held in the treasury. b. On December 31, 2022, AR JAY declared a 10% bonus issue to shareholders of record on January 15, 2023. The dividends will be distributed on January 31, 2023. AR JAY’s ordinary shares have a par and market value of P10 and P38, respectively. c. On December 31, bonds payable of P10,000,000 are outstanding. The bonds pay 12% interest every September 30 and mature in installments of P2,500,000 every September 30, beginning September 30, 2023. Accrued interest on the bonds has not been recorded. d. On December 31, 2021, customer advances were P12,000,000. During 2022, AR JAY collected P30,000,000 of customer advances and advances of P17,000,000 were yet to be earned. e. On December 31, 2022, retained earnings appropriated for future inventory losses amounted to P1,500,000. How much of the foregoing is classified as current liabilities?

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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Alexa Company is preparing its December 31, 2022 statement of financial position. The following items may be reported as either current of non-current liability:

a. On December 15, 2022, AR JAY declared a cash dividend of P2.50 per share to shareholders of record on December 30. The dividend is payable on January 15, 2023. AR JAY has issued 1,000,000 ordinary shares, of which 50,000 shares are held in the treasury.

b. On December 31, 2022, AR JAY declared a 10% bonus issue to shareholders of record on January 15, 2023. The dividends will be distributed on January 31, 2023. AR JAY’s ordinary shares have a par and market value of P10 and P38, respectively.

c. On December 31, bonds payable of P10,000,000 are outstanding. The bonds pay 12% interest every September 30 and mature in installments of P2,500,000 every September 30, beginning September 30, 2023. Accrued interest on the bonds has not been recorded.

d. On December 31, 2021, customer advances were P12,000,000. During 2022, AR JAY collected P30,000,000 of customer advances and advances of P17,000,000 were yet to be earned.

e. On December 31, 2022, retained earnings appropriated for future inventory losses amounted to P1,500,000.

How much of the foregoing is classified as current liabilities?

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