What amount of the note payable be classified as noncurrent

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Reference no: EM132888823

An entity provided the following trial balance on June 30, 2020:

Cash overdraft (200,000)

Accounts receivable, net 700,000

Inventory 1,200,000

Prepaid expenses 200,000

Land held for resale 2,000,000

Property, plant and equipment, net 1,900,000

Accounts payable 700,000

Share capital 3,000,000

Share premium 500,000

Retained earnings 1,600,000

Checks amounting to P600,000 were written to vendors and recorded on June 30 resulting in cash overdraft of P200,000. The checks were mailed on July 9. Land held for resale was sold for cash on July 15. The financial statements were issued on July 31.

Problem 1. What total amount should be reported as current assets?

a. 4,500,000

b. 4,100,000

c. 4,300,000

d. 2,500,000

Problem 2. What total amount should be reported as current liabilities?

a. 1,300,000

b. 1,500,000

c. 900,000

d. 700,000

Problem 3. What is the total shareholders' equity?

a. 5,100,000

b. 3,500,000

c. 3,000,000

d. 4,600,000

Problem 4. An entity reported net assets totaling P8,750,000 at year-end which included the following:

Treasury shares, at cost 250,000

Idle machinery 100,000

Trademark 150,000

Allowance for inventory writedown 200,000

What amount should be reported as net assets?

a. 8,500,000

b. 8,400,000

c. 8,300,000

d. 8,200,000

Problem 5. An entity had a note payable P5,000,000 due June 15, 2021. The entity signed an agreement on December 1, 2020 to borrow up to P5,000,000 to refinance the note payable on a long-term basis with no payments due until 2022. The financing agreement stipulated that borrowing may not exceed 80% of the value of the collateral. At the date of the issuance of 2020 financial statements, the value of the collateral was P6,000,000 and is not expected to fall below this amount. What amount of the note payable should be classified as noncurrent on December 31, 2020?

a. 5,000,000

b. 4,800,000

c. 200,000

d. 0

Reference no: EM132888823

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