Activity

Statement of Financial Position

Problem 1

Ash Company provided the following as of December 31, 2025:

Cash 3,500,000
Cash fund for value added tax 500,000
Accounts receivable 2,000,000
Inventory 1,000,000
Prepaid expenses 250,000
Financial assets held for trading 300,000
Equity investments at FVOCI 800,000
Investment in associate 2,500,000
Equipment held for sale 2,000,000
Deferred tax asset 150,000

Additional information:

a) The inventories include goods expected in the ordinary course of operations to

be sold beyond 12 months amounting to P700,000.
b) The prepaid expenses include P50,000 deposit made on inventory to be delivered
in 18 months.

Required:

i. What amount should be reported as total current assets as of December 31, 2025?
ii. What amount should be reported as total noncurrent assets as of December 31,
2025?

Problem 2

Stitch Company reported the following current assets as of December 31, 2025:

Cash 700,000
Accounts receivable 1,200,000
Inventory 600,000

An examination of the accounts receivable revealed the following:

Trade accounts receivable 930,000

Allowance for doubtful accounts (20,000)
Claim against shipper for goods lost in transit 30,000
Selling price of unsold goods sent out on consignment at 130%
of cost and not included in ending inventory 260,000
Total accounts receivable 1,200,000

Required:

What is the total amount of current assets as of December 31, 2025?

Problem 3

Lincoln Company reported the following current assets as of December 31, 2025:

Cash 3,500,000
Accounts receivable 3,000,000
Notes receivable, net of P200,000 discount on note 1,000,000
Inventory 1,500,000
Prepaid insurance 400,000
Total current assets 9,400,000

The accounts receivable consisted of the following:

Customers’ accounts 1,400,000

Employees’ account collectible currently 200,000
Advances to subsidiary 500,000
Allowance for doubtful accounts (100,000)
Subscription receivable, not collectible currently 1,000,000
Total accounts receivable 3,000,000

Required:

What total amount should be reported as current assets as of December 31, 2025?

Problem 4

Igris Company showed the following current assets as of December 31, 2025:

Cash 3,200,000
Accounts receivable 2,500,000
Inventory 2,000,000
Total current assets 7,700,000

Cash on hand, including customer postdated check P100,000 and

employee IOU P50,000 500,000
Cash in bank per bank statement (outstanding check as of
December 31, 2025, P200,000) 2,700,000
Total cash 3,200,000

Required:

What total amount should be reported as current assets?

Problem 5

Gandalf Company reported the following liability account balances on December 31, 2025:

Accounts payable 1,900,000

Bonds payable, due December 31, 2027 3,400,000
Discount on bonds payable 200,000
Deferred tax liability 400,000
Dividends payable 500,000
Income tax payable 900,000
Note payable, due December 31, 2026 600,000
Required:

i. What total amount should be reported as current liabilities as of December 31,

2025?
ii. What total amount should be reported as noncurrent liabilities as of December
31, 2025?

Problem 6

Chuzzle Company provided the following information on December 31, 2025:

Accounts payable 550,000

Note payable, 8% unsecured, due July 1, 2027 4,000,000
Accrued expenses 350,000
Contingent liability 450,000
Deferred tax liability 250,000
Bonds payable, 7% due December 31, 2026 5,000,000
Premium on bonds payable 500,000

The contingent liability is an accrual for possible loss on a P1,000,000 lawsuit filed
against the entity.

The legal counsel expected the suit to be settled in 2026 and estimated that the entity
shall be liable for damages in the range of P450,000 to P750,000.

The deferred tax liability is not related to an asset for financial reporting and is
expected to reverse in 2026.

Required:

What total amount should be reported as current liabilities on December 31, 2025?

Problem 7

Candy Company disclosed the following information:

Accounts payable, after deducting debit balances in suppliers’ accounts

amounting to P100,000 4,000,000
Accrued expenses 1,500,000
Credit balances of customers’ accounts 500,000
Share dividend payable 1,000,000
Claims for increase in wages and allowance by employees of the entity,
covered in a pending lawsuit 400,000
Estimated expenses in redeeming prize coupons 600,000

Required:

What amount should be reported as total current liabilities?

Problem 8

Axe Company provided the following information on December 31, 2025:

Cash in bank, net of bank overdraft of P500,000 5,000,000

Petty cash, unreplenished petty cash expenses P10,000 50,000
Notes receivable 4,000,000
Accounts receivable, net of customers’ accounts with credit
balances P1,500,000 6,000,000
Inventory 3,000,000
Bond sinking fund 3,000,000
Accounts payable, net of suppliers’ accounts with debit
balances P1,000,000 7,000,000
Notes payable 4,000,000
Bonds payable, due June 30, 2026 3,000,000
Accrued expenses 2,000,000

Required:

What amount should be reported as total current assets on December 31, 2025?

Problem 9

Dafoe Company reported the following liabilities on December 31, 2025:

Accounts payable 2,000,000

Short-term borrowings 1,500,000
Bonds payable due December 31, 2027 3,000,000
Discount on bonds payable 500,000
Mortgage payable, current portion P500,000 3,500,000
Bank loan, due June 30, 2026 1,000,000
Note payable, due October 31, 2026 2,000,000

The P1,000,000 bank loan was refinanced with a 5-year loan on December 31, 2025. The
financial statements were issued March 1, 2026.

Under the loan agreement, the entity has the right on December 31, 2025 to roll over
the note payable for at least twelve months after December 31, 2025.

Required:

i. What total amount should be reported as current liabilities on December 31,

2025?
ii. What total amount should be reported as noncurrent liabilities on December 31,
2025?
Problem 10

Peppermint Company provided the following information on December 31, 2025:

Employee income taxes withheld 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 amount of meeting warranties 500,000
Estimated damages as a result of unsatisfactory performance on a contract 1,500,000
Accounts payable 3,000,000
Deferred serial bonds 5,000,000

The deferred serial bonds are issued at par and bearing interest at 12%, payable in
semiannual installments of P500,000 due April 1 and October of each year, the last
bond to be paid on October 1, 2031. The interest is also paid semi-annually.

Required:

i. What amount should be reported as total current liabilities on December 31,

2025?
ii. What amount should be reported as total noncurrent liabilities on December 31,
2025?

Problem 11

Westmoreland Company provided the following information on December 31, 2025:

a) Accounts payable amounted to P500,000 and accrued expenses amounted to P300,000.

b) On December 15, 2025, Westmoreland declared a cash dividend of P7 per share on
100,000 outstanding shares, payable on January 15, 2026.
c) On July 1, 2025, Westmoreland issued P5,000,000, 8% bonds for P4,400,000 to
yield 10%. The bonds mature on June 30, 2030 and pay interest annually every
June 30.
d) The pretax financial income was P8,500,000 and taxable income was P6,000,000.
The difference is due to P1,000,000 permanent difference and P1,500,000 of
taxable temporary difference to reverse in 2024.
e) The income tax rate is 25%. The entity made estimated income tax payments during
the year of P1,000,000.

Required:

What total amount should be reported as current liabilities on December 31, 2025?

Problem 12

Jump Company provided the following current assets and shareholders’ equity at year –
end:

Cash 600,000
Financial asset at FVPL, including cost of P300,000 of Jump Company shares 1,000,000
Accounts receivable 3,500,000
Inventory 1,500,000
Total current assets 6,600,000
Share capital 5,000,000
Share premium 2,000,000
Retained earnings 500,000
Shareholders’ equity 7,500,000

Required:

What amount should be reported as total shareholders’ equity?

Problem 13

Argentum Company provided the following information on December 31, 2025:

Share premium 1,000,000

Accounts payable 1,100,000
Preference share capital, at par 2,000,000
Ordinary share capital, at par 3,000,000
Sales 10,000,000
Total expenses 7,800,000
Treasury shares at cost – ordinary 500,000
Dividends declared 700,000
Retained earnings – January 1, 2025 1,000,000

Required:

What amount should be reported as total shareholders’ equity on December 31, 2025?

Problem 14

Eggsy Company reported net assets totaling P8,750,000 on December 31, 2025 which
included the following:

Treasury shares of Eggsy Company, at cost 250,000

Idle machinery 100,000
Trademark 150,000
Allowance for inventory writedown 200,000

Required:

What amount should be reported as net assets as shareholders’ equity?

Problem 15

Mirage Company was incorporated on January 1, 2025 with proceeds from issuance of
P7,500,000 in share capital and borrowed funds of P1,100,000. During the first year,
revenue from sales and consulting amounted to P8,200,000 and operating costs and
expenses totaled P6,400,000.

On December 15, 2025, the entity declared a P300,000 dividend, payable to shareholders
on January 15, 2026. The liabilities increase to P2,000,000 by December 31, 2025.

Required:

On December 31, 2025, what amount should be reported as total assets?