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 employees totaling, P3,500 • Accounts receivable – includes accounts with credit balances of P45,000, accounts for write-of, P12,500 • Inventories - includes goods held on consignment, P27,000, goods in transit to customers, FOB destination, P85,750 Prepaid expenses - consist of an insurance applicable for 6 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 employees totaling, P3,500 • Accounts receivable – includes accounts with credit balances of P45,000, accounts for write-of, P12,500 • Inventories - includes goods held on consignment, P27,000, goods in transit to customers, FOB destination, P85,750 Prepaid expenses - consist of an insurance applicable for 6 months starting September 16, 2021, P96,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
What is the total current assets?
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 petty cash fund including IOUS of employees 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, FOB
destination, P85,750
• Prepaid expenses - consist of an insurance applicable for 6 months starting September 16, 2021,
P96,000
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