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Problem 2-2 (IAA)
Socorro Company provided the following information on
December 31, 2021:
‘Currentassets 3,100,000 ~— Currentiiabilities 1,000,000
Other assets 5,900,000 Long term liabilities 1,000,000
Capital 7,000,000
Cash (including P200,000 invested in money market
and restricted foreign deposit of P300,000) 1,000,000
Land held for undetermined use 500,000
Accounts receivable less allowance of P50,000 700,000
Inventories 600,000
Socorro Corporation share capital, at cost 300,000
Total current assets 3,100,000 ©
Store supplies : 50,000
Building less allowance of P500,000 3,000,000
Equipment less allowance of P250,000 750,000
Financial assets at amortized cost 1,000,000.
Trademark 300,000
Advances to officers-indefinite repayment 150,000
Patent ' 250,000
Land 400,000
Total other assets ‘ 5,900,000
Accounts payable : 500,000
Note payable, due December 31, 2022 100,000
Income tax payable 150,000
Share premium : 250,000
Total current liabilities 1,000,000
Unearned leasehold income five years starting 2022 350,000
Stock dividend payable 150,000
Serial bonds payable, P100,000 maturing annually 500,000 ©
Total long-term liabilities 1,000,000
Retained earnings 1,500,000
Share capital, P100 par 5,000,000
Retained earnings appropriated for plant expansion 500,000
Total capital 7,000,000
Required:
Prepare statement of financial position with supporting
notes and computations.
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Scanned with CamScanner Problem 2-3 (IAA)
Magna Company reported the following statement of
financial position on December 31, 2021.
Current assets 2,000,000 ~— Current liabilities 1,500,000
Investments 400,000 Longterm liabilities 2,000,000
Tangible assets 7,150,000 Equity 6,450,000
Intangible assets 400,000
9,950,000 9,950,000
Equity has preference share capital, no par value, P5 stated
value, authorized 300,000 shares, issued 150,000 shares for
P1,000,000, and ordinary share capital, P20 par value,
authorized 400,000 shares, issued 100,000 shares of P30 per
share.
* Tangible assets include building P5,000,000 less accumulated
depreciation P1,600;000, equipment P1,400,000 less
accumulated depreciation P400, 000, land Pi, 250,000, and
land held for future plant site P1,500,000.
* The current assets include: Cash P400,000, accounts receivable
P750,000 less P50,000 for allowance for doubtful accounts,
inventories P800,000, and prepaid expenses P100,000.
The investments include the cash surrender value of a life
insurance contract P50,000, investment in securities,
short-term, P100,000, and long-term, P250,000.
Intangible assets include a franchise: P100,000, goodwill
P200,000 and discount’on bonds payable P100,000.
Current liabilities include accounts payable P400,000, notes
payable - short-term debt P450,000, and long-term P300,000,
taxes payable P150, 000 and appropriation for contingencies
P200,000.
Long-term liabilities comprised solely of 12% bonds
payable due on December 31, 2024.
Required:
Prepare in good form a properly classified statement. of
financial position with appropriate notes.
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