• Rizal Technological University, Pasig City

• CBET 1

Problem 1-15 (IAA)

Ducky Company reported the following information at the end of reporting period:

Accounts payable 1,000,000

Advances to employees 45,000

Unearned rent revenue 300,000

Estimated liability under warranties 250,000

Cash surrender value of officers’ life insurance 75,000

Bonds payable 5,000,000

Discount on bonds payable 500,000

Trademark 50,000

What amount should be reported in the statement of financial position as total liabilities?

a. 6,050,000

b. 1,550,000

c. 7,050,000

d. 6,095,000

Problem 1-16 (IAA)

Burma Company disclosed the following information about liabilities at year-end:

Accounts payable, after deducting debit balances

in suppliers’ accounts amounting to P100,000 4,000,000

Accrued expenses 1,500,000

Credit balances of customers’ accounts 500,000

Stock dividend payable 1,000,000

Claims for increase in wages and allowance by

employees of the entity, covered in a pending lawsuit 400,000

Estimated expenses in redeeming prize coupons

presented by customers 600,000

What total amount should be presented as current liabilities at year-end?

a. 6,700,000

b. 6,600,000

c. 7,100,000

d. 7,700,000

Problem 1-17 (AICPA Adapted)

Mill Company revealed the following account balances on December 31, 2016 :

Accounts payable 1,500,000

Bonds payable, due 2017 2,500,000

Discount on bonds payable 300,000

Dividends payable 800,000

Note payable, due 2018 2,000,000

What total amount should be reported as current liabilities?

a. 4,500,000

b. 5,100,000

c. 6,500,000

d. 7,800,000

Problem 1-18 (AICPA Adapted)

Gar Company disclosed the following liability account balances on December 31, 2016:

Accounts payable 1,900,000

Bonds payable 3,400,000

Premium of bonds payable 200,000

Deferred tax liability 400,000

Dividends payable 500,000

Income tax payable 900,000

Note payable, due January 31,2017 600,000