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Current Liabilities Calculation Guide

The document presents three problems related to calculating total current liabilities for different companies as of December 31, 2017. Each problem provides specific financial data, including various types of payables and liabilities. The required computations involve summing up the relevant liabilities for each company.

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6 views1 page

Current Liabilities Calculation Guide

The document presents three problems related to calculating total current liabilities for different companies as of December 31, 2017. Each problem provides specific financial data, including various types of payables and liabilities. The required computations involve summing up the relevant liabilities for each company.

Uploaded by

msbidbedi wiadbfodn
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

UNIT 1 – LIABILITIES

Problem 1-1
Easy Company provided the following information on December 31, 2017:
Notes payable:
Trade 3,000,000
Bank loans 2,000,000
Advances from officers 500,000
Acçounts payable – trade 4,000,000
Bank overdraft 300,000
Dividends payable 1,000,000
Withholding tax payable 100,000
Mortgage payable 3,800,000
Income tax payable 800,000
Estimated warranty liability 600,000
Estimated damages payable by reason of breach of contract 700,000
Accrued liabilities 900,000
Estimated premium liability 200,000
Claim for increase in wages by employees covered in a pending lawsuit 3,500,000
Contract entered into for the construction of building 5,000,000
Required:
Compute the total current liabilities on December 31, 2017.

Problem 1-2
Manchester Company provided the following information on December 31, 2017:

Income taxes withheld from employees 900,000


Cash balance at First State Bank 2,500,000
Cash overdraft at Harbor Bank 1,300,000
Accounts receivable with credit balance 750,000
Estimated expenses of meeting warranties on
merchandise previously sold 500,000
Estimated damages as a result of unsatisfactory
performance on a contract 1,500,000
Accounts payable 3,000,000
Stock dividend payable 2,000,000
Required:
Compute the total current liabilities on December 31, 2017.

Problem 1-3
Multiple Company provided the following information on December 31, 2017:

Accounts payable after deducting debit balances in


suppliers' accounts of P100,000 500,000
Accrued liabilities 50,000
Note payable - due March 31, 2018 1,000,000
Note payable - due May 1, 2018 800,000
Bonds payable - due December 31, 2019 2,000,000

On March 1, 2018 before the 2017 financial statements were issued, the note payable of P1,000,000 was
replaced by an 18-month note for the same amount.

The entity is considering similar action on the P800, 000 note due on May 1, 2018. The financial statements
were issued on March 31, 2018.
Required:
[Link] total current liabilities.
[Link] total noncurrent liabilities.

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