CHAPTER 2
STATEMENT OF FINANCIAL POSITION

1. Fran Company provided the following data at year-end:

Trade accounts payable, including cost of goods received on consignment of P100,000 1,200,000
Accrued taxes payable 100,000
Customers' deposit 100,000
Herrera Company as guarantor 250,000
Bank overdraft 50,000
Accrued electric and power bills 55,000
Reserve for contingencies 180,000

What total amount should be reported as current liabilities? a. 1,840,000 b. 1,405,000 c. 1,700,000 d. 1,550,000

Answer: B

Solution:
Accounts payable (1,200,000-100,000)
Accrued taxes payable 100,000
Customers' deposit 100,000
Bank overdraft 50,000
Accrued electric and power bills 55,000
Total current liabilities 1,405,000

2. The following account balances were gathered from Fran Company's adjusted trial balance on December 31, 2014:

Cash 150,000
Prepaid rent 120,000
Mortgage payable 1,800,000
Wages payable 180,000
Inventory 560,000
Sinking fund 400,000
Accounts receivable 280,000
Short-term investment 250,000
Taxes payable 200,000
Accounts payable 200,000

What total amount should be reported as current assets in Fran Company's statement of financial position? a. 1,360,000 b. 1,560,000 c. 1,080,000 d. 1,240,000 Answer: A Solution:
Cash 150,000
Prepaid rent 120,000
Inventory 560,000
Accounts receivable 280,000
Short-term investment 250,000
Total current asset 1,360,000

3. Marfil Company's trial balance reflected the following account balances on December 31, 201:

Accounts receivable 1,400,000
Financial assets at fair value through profit or loss 450,000
Financial