Problem 2-21 (AICPA Adapted) Mint Company provided the following account balances on December 31, 2021 which had been adjusted except for income tax expense: Cash Accounts receivable, net Cost in excess of billings on long-term contracts Billings in excess of cost on long-term contracts Prepaid taxes Property, plant, and equipment, net Note payable - noncurrent Share capital Share premium Retained earnings unappropriated Retained earnings restricted for note payable Earnings from long-term contracts Costs and 3,600,000 3,500,000 1,500,000 700,000 800,000 4,000,000 3,500,000 2,000,000 800,000 1,400,000 1,000,000 9,000,000 5,000,000 expenses All receivables on long-term contracts are considered to be collectible within 12 months. During the year, estimated tax payments of P800,000 were charged to prepaid taxes. The entity has not recorded income tax expense. The tax rate is 30%. On December 31, 2021, what amount should be reported as 1. Total retained earnings? a. 2,400,000 b. 5,200,000 c. 6,400,000 d. 4,200,000 2. Total current liabilities? a. 1,100,000 b. 1,900,000 c. 700,000 d. 400,000 3. Total current assets? a. 9,400,000 b. 7,900,000 c. 8,600,000 d. 7,100,000
Problem 2-21 (AICPA Adapted) Mint Company provided the following account balances on December 31, 2021 which had been adjusted except for income tax expense: Cash Accounts receivable, net Cost in excess of billings on long-term contracts Billings in excess of cost on long-term contracts Prepaid taxes Property, plant, and equipment, net Note payable - noncurrent Share capital Share premium Retained earnings unappropriated Retained earnings restricted for note payable Earnings from long-term contracts Costs and 3,600,000 3,500,000 1,500,000 700,000 800,000 4,000,000 3,500,000 2,000,000 800,000 1,400,000 1,000,000 9,000,000 5,000,000 expenses All receivables on long-term contracts are considered to be collectible within 12 months. During the year, estimated tax payments of P800,000 were charged to prepaid taxes. The entity has not recorded income tax expense. The tax rate is 30%. On December 31, 2021, what amount should be reported as 1. Total retained earnings? a. 2,400,000 b. 5,200,000 c. 6,400,000 d. 4,200,000 2. Total current liabilities? a. 1,100,000 b. 1,900,000 c. 700,000 d. 400,000 3. Total current assets? a. 9,400,000 b. 7,900,000 c. 8,600,000 d. 7,100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 2-21 (AICPA Adapted)
Mint Company provided the following account balances on
December 31, 2021 which had been adjusted except for
income tax expense:
Cash
Accounts receivable, net
Cost in excess of billings on long-term contracts
Billings in excess of cost on long-term contracts
Prepaid taxes
Property, plant, and equipment, net
Note payable - noncurrent
Share capital
Share premium
Retained earnings unappropriated
Retained earnings restricted for note payable
Earnings from long-term contracts
Costs and
3,600,000
3,500,000
1,500,000
700,000
800,000
4,000,000
3,500,000
2,000,000
800,000
1,400,000
1,000,000
9,000,000
5,000,000
expenses
All receivables on long-term contracts are considered to be
collectible within 12 months.
During the year, estimated tax payments of P800,000 were
charged to prepaid taxes. The entity has not recorded income
tax expense. The tax rate is 30%.
On December 31, 2021, what amount should be reported as
1. Total retained earnings?
a. 2,400,000
b. 5,200,000
c. 6,400,000
d. 4,200,000
2. Total current liabilities?
a. 1,100,000
b. 1,900,000
c. 700,000
d. 400,000
3. Total current assets?
a. 9,400,000
b. 7,900,000
c. 8,600,000
d. 7,100,000
4. Total shareholders' equity?
a. 8,700,000
b. 7,000,000
c. 8,000,000
d. 2,800,000
68
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