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Acctg Ats1

Simon Company's financial position as of December 31, 2020 is summarized. Current liabilities total P680,500 and include a cash overdraft, estimated expenses, estimated damages, accounts payable, and income taxes payable. Non-current liabilities total P512,900 and consist of deferred serial bonds of P500,000 issued at par less the current portion due, as well as accrued interest on the bonds and deferred tax liabilities.

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Christian N Magsino
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159 views2 pages

Acctg Ats1

Simon Company's financial position as of December 31, 2020 is summarized. Current liabilities total P680,500 and include a cash overdraft, estimated expenses, estimated damages, accounts payable, and income taxes payable. Non-current liabilities total P512,900 and consist of deferred serial bonds of P500,000 issued at par less the current portion due, as well as accrued interest on the bonds and deferred tax liabilities.

Uploaded by

Christian N Magsino
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Assessment Task 1

Problem 1. You were provided the following information for Simon Company as at
December 31, 2020.

Cash balance at First National Bank P250,000

Cash overdraft at Second National Bank 13,500

Accounts receivable, net of P28,500 credit balance 431,500

Estimated expenses of meeting warranties on

merchandise sold 32,000

Estimated damages on unsatisfactory performance

on a contract 125,000

Accounts payable net of P20,250 debit balance 299,750

Deferred serial bonds of P500,000, issued at par, 500,000

payable in semi-annual installments of P50,000,

due April 1 and October 1 of each year, the last

payment shall be in October 2026. These serial

bonds bear a 10% interest that is paid semi-annually

every April 1 and October 1 500,000

Ordinary shares at par to be distributed as a result of

a share dividend declaration 40,000

Dividends in arrears on preference shares 25,000

Income tax payable 124,000

Deferred asset, net of deferred tax liabilities at


P25,400 expected to reverse next year 51,600

Reserve for contingencies 50,000

Question 1. At year end, how much should be presented as current liabilities?

P680,500

Question 2. How much is the total of noncurrent liabilities?

P512,900

Solution:

Current Liabilities Non-Current Liabilities


Cash Overdraft P13, 500
Accounts Receivable 28,500
Estimated Expenses 32,000
Estimated Damage 125, 000
Accounts Payable 320,000
Deferred Serial bonds P487,500
(500,000 – 12,500)
Accrued Interest on Serial 12,500
Bonds
(500,000 x .10 x 3/12)
Dividends on preference shares 25,000
Income tax payable 124,000
Deferred tax liabilities 25, 400
P680,500 P512,900

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