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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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Watermelon provided the following account balances on December 31, 2023 which had been adjusted except for income tax expense: Cash 800,000 Accounts receivable 2,800,000 3,000,000 Inventory Property, plant and equipment at carrying amount 10,500,000 Accounts payable Income tax payable 1,800,000 2,400,000 Bonds payable – due December 31, 2024 Share capital Share premium 1,300,000 2,500,000 3,000,000 Retained earnings, January 1 1,000,000 Net sales and other revenue 20,000,000 Costs and expenses Income tax expense 12,000,000 2,900,000 The accounts receivable included P1,000,000 due from a customer and payable in quarterly installments of P125,000 under special terms. The last payment is due on December 31, 2025. During the year, estimated tax payment of P500,000 was charged to income tax expense. The income tax rate 30%. Included in property, plant and equipment is land held for sale measured at P1,500,000. On December 31, 2023, what amount should be reported as total current assets? A. 7,600,000 B. 8,100,000 C. 6,100,000 D. 6,600,000 On December 31, 2023, what amount should be reported as total current liabilities? C. 5,000,000 A. 3,700,000 B. 4,200,000 D. 5,500,000 On December 31, 2023, what amount should be reported as total shareholders' equity? A. 12,100,000 B. 14,500,000 C. 6,500,000 D. 5,500,000
Transcribed Image Text:Watermelon provided the following account balances on December 31, 2023 which had been adjusted except for income tax expense: Cash 800,000 Accounts receivable 2,800,000 3,000,000 Inventory Property, plant and equipment at carrying amount 10,500,000 Accounts payable Income tax payable 1,800,000 2,400,000 Bonds payable – due December 31, 2024 Share capital Share premium 1,300,000 2,500,000 3,000,000 Retained earnings, January 1 1,000,000 Net sales and other revenue 20,000,000 Costs and expenses Income tax expense 12,000,000 2,900,000 The accounts receivable included P1,000,000 due from a customer and payable in quarterly installments of P125,000 under special terms. The last payment is due on December 31, 2025. During the year, estimated tax payment of P500,000 was charged to income tax expense. The income tax rate 30%. Included in property, plant and equipment is land held for sale measured at P1,500,000. On December 31, 2023, what amount should be reported as total current assets? A. 7,600,000 B. 8,100,000 C. 6,100,000 D. 6,600,000 On December 31, 2023, what amount should be reported as total current liabilities? C. 5,000,000 A. 3,700,000 B. 4,200,000 D. 5,500,000 On December 31, 2023, what amount should be reported as total shareholders' equity? A. 12,100,000 B. 14,500,000 C. 6,500,000 D. 5,500,000
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