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Current portion of mortgage payable4,000Total current liabilities P 34,700Long-Term LiabilitiesMortgage payableP 16,000Bonds payable (due 2021)P40,000Add: Premium on bonds payable4,30044,300Total long-term liabilities60,300Total LiabilitiesP 95,000Shareholders’ EquityContributed CapitalPreference shares, P100 parP 6,000Ordinary shares, P5 par11,000Premium on preference shares2,400Premium on ordinary shares14,700Total contributed capitalP 34,100
Preparation of Audited Financial Statements22-15Retained Earnings37,800Accumulated Other ComprehensiveIncomeUnrealized increase in value of available-for-sale securities1,100Total contributed capital, retainedearnings and accumulated other comprehensive incomeP 73,000Less: Treasury shares (at cost)(1,800)Total Shareholders’ EquityP 71,200Total Liabilities and Shareholders’ EquityP166,20022-9.Hera Manufacturing CorporationHera Manufacturing CompanyStatement of Financial PositionDecember 31, 2015AssetsCurrent AssetsCashP 109,000aAccounts receivable (net)317,700bInventories560,000Total current assetsP 926,700Long-term Investment, at market value47,000c, jProperty, Plant, and Equipment at costLandP 200,000dBuildingsP1,750,000Machinery and equipment1,964,000TotalP3,714,000Less: Accumulated depreciation(420,000)3,294,000Total property, plant and equipment3,494,000Intangible AssetGoodwill37,000Other AssetsCash restricted for building purposesP 100,000aOfficer’s note receivable 130,000bLand held for future building site250,000d380,000Total AssetsP4,944,700Liabilities and Shareholders’ EquityCurrent LiabilitiesAccounts payableP 119,800eCurrent installments of long-termdebt200,000f, gLawsuit liability80,000
22-16 Solutions Manual to Accompany Applied Auditing, 2014 EditionIncome taxes payable21,200hDeferred tax liability5,000Total current liabilities P 426,000Long-Term DebtMortgage payableP 800,000fNote payable 400,000gDeferred tax liability23,000Total long-term debt1,223,000Total LiabilitiesP1,649,000Shareholders’ EquityOrdinary shares, authorized 100,000 shares of P50 par value; issued 40,000 shares;outstanding 39,800 sharesP2,000,000iAdditional paid-in capital231,000iTotal paid-in capitalP2,231,000Accumulated Other ComprehensiveLossUnrealized decrease in value of long-term investment(4,300)jRetained Earnings1,075,400Total P3,302,100Less: Cost of treasury shares(6,400)cTotal Shareholders’ Equity3,295,700Total Liabilities and Shareholders’ EquityP4,944,7001 Alternatively, this could be reported under Long-Term InvestmentsExplanation of AmountsaCash, per unaudited statement of financial positionP225,000Less:Unrecorded checks in payment of accountspayable(14,000)NSF check not recorded(2,000)Cash restricted for building purposes(reported in other assets)(100,000)Corrected balanceP109,000bAccounts receivable (net), per unaudited statement of financial positionP345,700Add charge-back for NSF check [see (a)]2,000Less:Officer’s note receivable (reported in other assets)(30,000)Corrected balanceP317,700cInvestments, per unaudited statement of financial positionP 57,700Less:Long-term investment [reported separately,see (j)](51,300)Treasury shares (reported in shareholders’ equity)(6,400)
Preparation of Audited Financial Statements22-17Corrected balanceP 0dLand, per unaudited statement of financial positionP450,000