Problem 1. Below are the account balances prepared by the bookkeeper for SQUELCH TOSILENCE Company as of December 31, 20x1:AssetsLiabilitiesCash30,000Accounts payable 40,000Accounts receivable, net88,000Notes payable200,000Inventory80,000Prepaid income tax16,000Prepaid assets10,00011Investment in subsidiary20,000Land held for sale56,000Property, plant and equipment100,000Totals400,000240,000Additional information:Cash consists of the following:Petty cash fund (unreplenished petty cash expenses, P 3,000)4,000Cash in bank(20,000)Payroll fund28,000Tax fund14,000Cash to be contributed to a sinking fund set up for the retirementof bonds maturing on December 31, 20x34,000Total Cash30,000Checks amounting to P 61,000 were written to suppliers and recorded on December 30,20x1, resulting to a bank overdraft of P 20,000. The checks were mailed on January 5,20x2. Accounts receivable consists of the following:Accounts receivable80,000( 10,000)( 6,000)Allowance for uncollectabilityCredit balance in customers' accountsSelling price of unsold goods sent on consignment to QUELL, Inc.at 120% of cost and excluded from SQUELCH's inventory24,000Accounts receivable, net88,000The inventory includes cost of goods amounting to P 20,000 that are expected to be soldbeyond 12 months but within the ordinary course of business. Also, the inventory includescost of consigned goods received on consignment from Alpha-Numerix Co. amounting toP 10,000.Prepaid income tax represents excess of payments for quarterly corporate income taxesduring 20x1 over the actual annual corporate income tax as of December 31, 20x1.12Prepaid assets includes a P 4,000 security deposit on an operating lease which isexpected to expire on March 31, 20x3. The security deposit will be received on leaseexpiration.The land qualified for classification as "asset held for sale" under PFRS 5 Non-currentAssets Held for Sale and Discontinued Operations as of December 31, 20x1Accounts payable is net ofP 12,000 debit balance in suppliers' accounts. Accountspayable includes the cost of goods held on consignment from Alpha-Numerix Co. whichwere included in inventory.The notes payable are dated July 1, 20x1 and are due on July 1, 20x4. The notes payablebears an annual interest rate of 10%. Interest is payable annually.How much is the adjusted working capital?a) 334,000b) 289,000c) 264,000d) 215,000

WC stands for Working capital is the capital which is needed for the day to day operations for the…

Problem 1. Below are the account balances prepared by the bookkeeper for SC SILENCE Company as of December 31, 20x1: Assets Liabilities Cash 30,000 Accounts payable 40,000 Accounts receivable, net 88,000 Notes payable 200,000 Inventory 80,000 Prepaid income tax 16,000 Prepaid assets 10,000

Problem 1. Below are the account balances prepared by the bookkeeper for SC SILENCE Company as of December 31, 20x1: Assets Liabilities Cash 30,000 Accounts payable 40,000 Accounts receivable, net 88,000 Notes payable 200,000 Inventory 80,000 Prepaid income tax 16,000 Prepaid assets 10,000

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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