The following unadjusted sections of the Balance Sheet of the MILO Inc. as at December 31, 1988 were presented to you. Cash P85,000 Trade accounts payable, net of P5,000 debit balance P125,000 Accounts receivable 282,400 Interest payable 3,000 Merchandise inventory 92,000 Income tax payable 12,000 Deferred charges 8,600 Money claims of Union pending final decision 45,000 . Mortgage payable due in four annual installments 100,000 P468,000 P285,000 A review of the above indicate that the Cash account of P85,000 included a customer’s check returned by the bank marked NSF amounting to P1,250; and employee’s IOU of P2,000; and P10,000 deposited with the courts for a case under litigation. The Cash in Bank portion amount to P71,750 and reconciled into outstanding checks of p11,750 and P60,000 per books dated December 31, 1988. Accounts receivable totaling P282,400 is composed of: Customers, debit balances – P181,400; Advances to subsidiaries – P20,000; Advances to suppliers – P15,000; Receivables from MILO officers – P18,000; Allowance for Bad Debts – (P8,000); and selling price of merchandise invoiced at 140% of cost but not yet delivered – P56,000. The correct total of Current Assets on December 31, 1988 is

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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The following unadjusted sections of the Balance Sheet of the MILO Inc. as at December 31, 1988 were presented to you.

Cash	P85,000	Trade accounts payable, net of P5,000 debit balance	P125,000
Accounts receivable	282,400	Interest payable	3,000
Merchandise inventory	92,000	Income tax payable	12,000
Deferred charges	8,600	Money claims of Union pending final decision	45,000
	.	Mortgage payable due in four annual installments	100,000
	P468,000		P285,000

A review of the above indicate that the Cash account of P85,000 included a customer’s check returned by the bank marked NSF amounting to P1,250; and employee’s IOU of P2,000; and P10,000 deposited with the courts for a case under litigation.

The Cash in Bank portion amount to P71,750 and reconciled into outstanding checks of p11,750 and P60,000 per books dated December 31, 1988.

Accounts receivable totaling P282,400 is composed of: Customers, debit balances – P181,400; Advances to subsidiaries – P20,000; Advances to suppliers – P15,000; Receivables from MILO officers – P18,000; Allowance for Bad Debts – (P8,000); and selling price of merchandise invoiced at 140% of cost but not yet delivered – P56,000.

The correct total of Current Assets on December 31, 1988 is

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