NAME: MA. WENDY M.

CABANES DATE: OCTOBER 13, 2020

COURSE AND YEAR: BSMA-3

PROBLEM A:

Following is a list of account titles and balances for Abraham Company as of June 30, 2014.
Prepare a classified statement of financial position, with supporting notes.

Accounts payable 205,000 Goods in process 200,000

Accounts receivable 320,000 Income tax payable 25,000
Accrued expenses 42,500 Investment in bonds 1,500,000
Accrued interest-note payable 22,500 Investment property 500,000
Accrued interest-note receivable 30,000 Land 600,000
Acc. Depreciation-building 950,000 Long-term advances to officers 140,000
Acc. Depreciation-machinery 175,000 Long-term refundable deposits 60,000
Acc. Depreciation-furniture 75,000 Machinery and equipment 500,000
Advances to employees 25,000 Manufacturing supplies 25,000
Allowance for doubtful accounts 10,000 Note payable 60,000
Bonds payable 1,000,000 Note payable, due Sept 1,2016 500,000
Building 2,250,000 Note receivable 50,000
BSP Treasury bill-60 days 75,000 Office supplies unused 15,000
Cash in bank 150,000 Petty cash fund 10,000
Cash on hand 20,000 Plant expansion fund 1,000,000
Cash surrender value of life insurance Prepaid insurance 20,000
Policy 50,000 Raw materials 75,000
Deferred tax liability 60,000 Retained earnings 1,825,000
Dividends payable 40,000 Retained earnings appropriated
Financial assets at fair value 100,000 for contingencies 500,000
Finished goods 160,000 Share capital, P50 par 2,500,000
Furniture and fixtures 190,000 Share premium 1,000,000
Franchise 750,000 Trademark 200,000
Warranty liability 25,000
 Abraham Company
Statement of Financial Position
As of June 30,2014
ASSETS
Current Assets
Cash and Cash Equivalents (1) P255,000
Trade and other receivables (2) 390,000
Inventories (3) 460,000
Financial Assets 100,000
Advances to employees 25,000
Prepaid Expense 35,000
Cash surrender value of life insurance Policy 50,000
Total Current Assets 1,315,000

Non Current Assets

Property, Plant and Equipment (4) P2,340,000
Intangible Assets (5) 950,000
Investment in bonds 1,500,000
Investment property 500,000
Long-term advances to officers 140,000
Long-term refundable deposits 60,000
Plant expansion fund 1,000,000
Total Noncurrent Assets 6,490,000
Total Assets P7,805,000

LIABILITIES & SHAREHOLDERS EQUITY

LIABILITIES
Current Liabilities
Trade and Other payable (6) P 370,000
Warranty Liability 25,000
Income tax payable 25,000
Total Current Liabilities 420,000
Noncurrent Liabilities
Notes Payable, due Sept. 1, 2016 P 500,000
Bonds Payable 1,000,000
Deferred Tax Liability 60,000
Total Noncurrent Liabilities 1,560,000
Shareholder’s Equity
Share Capital P2,500,000
Share premium 1,000,000
Retained Earnings (7) 2,325,000
Total Shareholder’s Equity 5,825,000
Total liabilities & Shareholder’s Equity P 7,805,000

PROBLEM B:
A balance sheet contains the ff. classifications:

a. Cash and Cash Equivalents i. Other Noncurrent Assets

b. Financial Assets at Fair Value j. Trade and other payables
c. Trade and other Receivables k. Provisions
d. Inventories l. Noncurrent liabilities
e. Prepaid Expenses m. Share capital
f. Property, Plant and Equipment n. Reserves
g. Long Term Investments o. Retained Earnings
h. Intangible Assets

Determine under what classification should each of the ff. item be included. Write the letters only.

I 1. Change Fund
A 2. Marketable Securities
E 3. Unused Office Supplies
L 4. Financial lease liability
M 5. Cash in foreign bank, unrestricted
C 6. Customer accounts with debit balances
H 7. Goodwill
K 8. Building under construction subsequently to be used as office
N 9. Preference shares
B 10. Dividends paid
I 11. Estimated premium liability
G 12. Long-term advances to officers
F 13. Land held for future plant site
J 14. Customer accounts with credit balances
O 15. Share premium