provided the following information on December 31, 2021: Accounts payable, net of creditors’ debit balance of P 200,000…P  2,000,000 Accrued expenses……………………………………………………...            800,000 Bonds payable due December 31, 2023…………………………….         4,500,000 Premium on bonds payable…………………………………………..         500,000 Deferred tax liability…………………………………………………..          500,000 Income tax payable……………………………………………………         1,100,000 Cash dividend payable……………………………………………….            600,000 Share dividend distributable…………………………………………         400,000 Notes payable-6% due March 1, 2022……………………………..        1,500,000 Notes payable-8% due October 1, 2022…………………………..        1,000,000 The financial statements for 2021 were issued on March 1, 2022. On December 31, 2021, the 6% note payable was refinanced on a long-term basis. Under the loan agreement, the entity has the right on December 31, 2021 to roll over the 8% note payable for at least 12 months after December 31,2021. At what amount should the total current liabilities be presented in the statement of financial position of Messier Inc.’s as of December 31, 2021?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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  1. provided the following information on December 31, 2021:

Accounts payable, net of creditors’ debit balance of P 200,000…P  2,000,000

Accrued expenses……………………………………………………...            800,000

Bonds payable due December 31, 2023…………………………….         4,500,000

Premium on bonds payable…………………………………………..         500,000

Deferred tax liability…………………………………………………..          500,000

Income tax payable……………………………………………………         1,100,000

Cash dividend payable……………………………………………….            600,000

Share dividend distributable…………………………………………         400,000

Notes payable-6% due March 1, 2022……………………………..        1,500,000

Notes payable-8% due October 1, 2022…………………………..        1,000,000

  • The financial statements for 2021 were issued on March 1, 2022.
  • On December 31, 2021, the 6% note payable was refinanced on a long-term basis.
  • Under the loan agreement, the entity has the right on December 31, 2021 to roll over the 8% note payable for at least 12 months after December 31,2021.

At what amount should the total current liabilities be presented in the statement of financial position of Messier Inc.’s as of December 31, 2021?

 

2.

  1. provided the following information on December 31, 2021:

Accounts payable………………………….P       6,500,000

Bank note payable-10%..........................      3,000,000

Bank note payable-11%......................... 5,000,000

Mortgage note payable-10%.................. 2,000,000

Bonds payable……………………………..  4,000,000

  • The P 3,000,000, 10% note was issued March 1, 2021 payable on demand. Interest is payable every 6 months.
  • The one-year P 5,000,000, 11% note was issued on January 15, 2021. On December 31, 2021, the entity negotiated a written agreement with the bank to replace the note with a 2-year P 5,000,000, 10% note to be issued on January 15, 2022.
  • The 10% mortgage note was issued on October 1, 2018 with a term of 10 years. Term of the note give the holder the right to demand immediate payment if the entity fails to make a monthly interest payment within 10 days from the date the payment is due.  On December 31, 2021 the entity is three months behind in making the required interest payment.
  • Thhe bonds payable are 10-year 8% bonds, issued on June 30, 2012. Interest is payable semi-annually on June 30 and December 31.

         What amount should Sobrero Inc. report as total current liabilities?

3,

  1. Milky Way Inc. provided the following information on December 31, 2021:

Employee income taxes withheld………………….P   900,000

Cash balance at BPI-Leon Guinto Branch..………. 2,500,000

Cash overdraft at BDO-A. Mabini Branch……….. 1,300,000

Accounts receivable with credit balance………..       750,000

Estimated amount of meeting warranties……......         500,000

Estimated damages as a result of unsatisfactory...     1,500,000

Accounts payable……………………………………  3,000,000

Deferred serial bonds, issued at par and bearing

     interest at 12%, payable in semi-annual

     installments of P 500,000 due April 1and

     October 1 of each, the last bond to be paid

     on October 1, 2027.  Interest is also paid

     semi-annually…………………………………… 5,000,000

          What amount should be reported as total current liabilities on December 31, 2021?

4.

  1. reported the following liability balances on December 31, 2021:

10% note payable issued on October 1, 2020,

     maturing October 1, 2022………………………………P   2,000,000

12% note payable issued on March 1, 2020,

     on March 1, 2022………………………………………..      4,000,000

         The 2021 financial statements were issued  on March 31, 2022.

         Under the loan agreement, the entity has the right on December 31, 2021 to roll over the 10%

         note payable for at least 12 months after December 31, 2021.

       On March 1, 2022, entire P 4,000,000 balance of the 12% note payable was refinanced

       through issuance of a long-term obligation payable lump-sum. 

      What amount of the notes payable should be classified as current on December 31, 2021?

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