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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Compute for the total current asset
Transcribed Image Text: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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