Compute for the total current asset The December 31,2021, Statement of Financial Position of REED Company contained the followingcurrent assets; Cash and cash equivalents- P2,400,525; Accounts receivable, net P1,775,500;Inventories - P 387,270; Prepaid expenses-P500,000An examination revealed that-•Cash includes P400,000 set aside for plant expansion, cash in bank which is net of bank overdraft,P13,000 and pitty cash fund including 1OUS of employens totaling, P1,500• Accounts receivableP12,500includes accounts with credit balances of P45,000, aCcounts for write-off,•Inventories -includes goods held on Consignment, P27,000, goods in transit to customers, FOBdestination, P85,750• Prepaid cxpensesconsist of an insurance oplicable for 5 months starting September 16, 2021,

The correct amount for current assets to be reported at December 31, 2021 is P 4,532,295. The…

The December 31,2021, Statement of Financial Position of REED Company contained the following current assets; Cash and cash equivalents - P2,400,525; Accounts receivable, net - P1,775,500; Inventories- P 387,270; Prepaid expenses P500,000 An examination revealed that: • Cash- includes P400,000 set aside for plant expansion, cash in bank which is net of bank overdraft, P13,000 and petty cash fund including IOUS of employens totaling, P3,500 Accounts receivable- includes accounts with credit balances of P45,000, accounts for write-off, P12,500 •Inventories- includes goods held on consignment, P27,000, goods in transit to customers, FO8 destination, P85,750 Prepaid expenses consist of an insurance aoplicable for 5 months starting September 16, 2021, P96,000

The December 31,2021, Statement of Financial Position of REED Company contained the following current assets; Cash and cash equivalents - P2,400,525; Accounts receivable, net - P1,775,500; Inventories- P 387,270; Prepaid expenses P500,000 An examination revealed that: • Cash- includes P400,000 set aside for plant expansion, cash in bank which is net of bank overdraft, P13,000 and petty cash fund including IOUS of employens totaling, P3,500 Accounts receivable- includes accounts with credit balances of P45,000, accounts for write-off, P12,500 •Inventories- includes goods held on consignment, P27,000, goods in transit to customers, FO8 destination, P85,750 Prepaid expenses consist of an insurance aoplicable for 5 months starting September 16, 2021, P96,000

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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Question

Compute for the total current asset

The December 31,2021, Statement of Financial Position of REED Company contained the following
current assets; Cash and cash equivalents- P2,400,525; Accounts receivable, net P1,775,500;
Inventories - P 387,270; Prepaid expenses-P500,000
An examination revealed that-
•Cash includes P400,000 set aside for plant expansion, cash in bank which is net of bank overdraft,
P13,000 and pitty cash fund including 1OUS of employens totaling, P1,500
• Accounts receivable
P12,500
includes accounts with credit balances of P45,000, aCcounts for write-off,
•Inventories -
includes goods held on Consignment, P27,000, goods in transit to customers, FOB
destination, P85,750
• Prepaid cxpenses
consist of an insurance oplicable for 5 months starting September 16, 2021,

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