9. HBO Inc. was incorporated on January 1,2021 with proceeds from the issuance of P7,500,000 in share capital and borrowed funds of P1,100,000. During the first year of operation, revenue from sales and consulting amounted to P8,200,000, and operating costs and expenses totaled P6,400,000. On December 15,2021, HBO declared a P300,000 dividends, payable to shareholders on January 15,2022. No additional activities affected shareholder’s equity in 2021. HBO’s liabilities increased by P2,000,000 on December 31,2021. In HBO’s December 31,2021 statement of financial position, what amount should be reported as total assets?
9. HBO Inc. was incorporated on January 1,2021 with proceeds from the issuance of P7,500,000 in share capital and borrowed funds of P1,100,000. During the first year of operation, revenue from sales and consulting amounted to P8,200,000, and operating costs and expenses totaled P6,400,000. On December 15,2021, HBO declared a P300,000 dividends, payable to shareholders on January 15,2022. No additional activities affected shareholder’s equity in 2021. HBO’s liabilities increased by P2,000,000 on December 31,2021. In HBO’s December 31,2021 statement of financial position, what amount should be reported as total assets?
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 1BCRQ
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9. HBO Inc. was incorporated on January 1,2021 with proceeds from the issuance of P7,500,000 in share capital and borrowed funds of P1,100,000. During the first year of operation, revenue from sales and consulting amounted to P8,200,000, and operating costs and expenses totaled P6,400,000. On December 15,2021, HBO declared a P300,000 dividends, payable to shareholders on January 15,2022. No additional activities affected shareholder’s equity in 2021. HBO’s liabilities increased by P2,000,000 on December 31,2021. In HBO’s December 31,2021
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