In the audit of A Corporation’s financial statements at December 31, 2025, the chief accountant of the staid corporation provided the following information:   Notes payable:                   Arising from purchase of goods 304,000                 Arising from 5 year-bank loans, on which marketable securities valued at P600,000  have been pledged as security, P400,000 due on June 30, 2026; P100,000 due on Dec. 31, 2026   500,000                 Arising from advances by officers, due June 30, 2026 50,000 Reserve for general contingencies 400,000 Employees’ income tax withheld 20,000 Advances received from customers on purchase orders 64,000 Containers’ deposit 50,000 Accounts payable arising from purchase of goods, net of debit balances of P40,000 170,000 Cash dividends payable 80,000 Stock dividend payable 100,000 Dividends in arrears on preferred stock, not yet declared 200,000 Convertible bonds, due January 31, 2027 1,000,000 First mortgage serial bonds, payable in semi-annual installments of P50,000, due April 1 and October 1 2,000,000 Overdraft with Allied bank 90,000 Cash in bank balance with PNB 390,000 Estimated damages to be paid as a result of unsatisfactory performance on a contract 160,000 Estimated expenses on meeting guarantee for service requirements on merchandise sold 120,000 Estimated premiums payable 75,000 Deferred revenue 87,000 Accrued interest on bonds payable 360,000 Common stock warrants outstanding 120,000 Common stock options outstanding 210,000 Unused letters of credit 400,000 Deficiency VAT assessment being contested 500,000 Notes receivable discounted 200,000   On March 31, 2026, the P400,000 notes payable was replaced by an 18-month note for the same amount. A is considering similar action on the P100,000 note payable due on December 31, 2026. The 2025 financial statements were issued on March 31, 2026.   On December 1, 2025, a former employee filed a lawsuit seeking P200,000 for unlawful dismissal. A’s attorney believe that the suit is without merit. No court date has been set.   Compute the total current liabilities as of December 31, 2025:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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In the audit of A Corporation’s financial statements at December 31, 2025, the chief accountant of the staid corporation provided the following information:

 

Notes payable:

 

                Arising from purchase of goods

304,000

                Arising from 5 year-bank loans, on which marketable securities valued at P600,000  have been pledged as security, P400,000 due on June 30, 2026; P100,000 due on Dec. 31, 2026

 

500,000

                Arising from advances by officers, due June 30, 2026

50,000

Reserve for general contingencies

400,000

Employees’ income tax withheld

20,000

Advances received from customers on purchase orders

64,000

Containers’ deposit

50,000

Accounts payable arising from purchase of goods, net of debit balances of P40,000

170,000

Cash dividends payable

80,000

Stock dividend payable

100,000

Dividends in arrears on preferred stock, not yet declared

200,000

Convertible bonds, due January 31, 2027

1,000,000

First mortgage serial bonds, payable in semi-annual installments of P50,000, due April 1 and October 1

2,000,000

Overdraft with Allied bank

90,000

Cash in bank balance with PNB

390,000

Estimated damages to be paid as a result of unsatisfactory performance on a contract

160,000

Estimated expenses on meeting guarantee for service requirements on merchandise sold

120,000

Estimated premiums payable

75,000

Deferred revenue

87,000

Accrued interest on bonds payable

360,000

Common stock warrants outstanding

120,000

Common stock options outstanding

210,000

Unused letters of credit

400,000

Deficiency VAT assessment being contested

500,000

Notes receivable discounted

200,000

 

On March 31, 2026, the P400,000 notes payable was replaced by an 18-month note for the same amount. A is considering similar action on the P100,000 note payable due on December 31, 2026. The 2025 financial statements were issued on March 31, 2026.

 

On December 1, 2025, a former employee filed a lawsuit seeking P200,000 for unlawful dismissal. A’s attorney believe that the suit is without merit. No court date has been set.

 

Compute the total current liabilities as of December 31, 2025:

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