Current portion of mortgage payable 4000 Total current liabilities P 34700 Long

Current portion of mortgage payable 4000 total

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Current portion of mortgage payable 4,000 Total current liabilities P 34,700 Long-Term Liabilities Mortgage payable P 16,000 Bonds payable (due 2021) P40,000 Add: Premium on bonds payable 4,300 44,300 Total long-term liabilities 60,300 Total Liabilities P 95,000 Shareholders’ Equity Contributed Capital Preference shares, P100 par P 6,000 Ordinary shares, P5 par 11,000 Premium on preference shares 2,400 Premium on ordinary shares 14,700 Total contributed capital P 34,100
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Preparation of Audited Financial Statements 22-15 Retained Earnings 37,800 Accumulated Other Comprehensive Income Unrealized increase in value of available-for-sale securities 1,100 Total contributed capital, retained earnings and accumulated other comprehensive income P 73,000 Less: Treasury shares (at cost) (1,800 ) Total Shareholders’ Equity P 71,200 Total Liabilities and Shareholders’ Equity P166,200 22-9. Hera Manufacturing Corporation Hera Manufacturing Company Statement of Financial Position December 31, 2015 Assets Current Assets Cash P 109,000 a Accounts receivable (net) 317,700 b Inventories 560,000 Total current assets P 926,700 Long-term Investment, at market value 47,000 c, j Property, Plant, and Equipment at cost Land P 200,000 d Buildings P1,750,000 Machinery and equipment 1,964,000 Total P3,714,000 Less: Accumulated depreciation (420,000 ) 3,294,000 Total property, plant and equipment 3,494,000 Intangible Asset Goodwill 37,000 Other Assets Cash restricted for building purposes P 100,000 a Officer’s note receivable 1 30,000 b Land held for future building site 250,000 d 380,000 Total Assets P4,944,700 Liabilities and Shareholders’ Equity Current Liabilities Accounts payable P 119,800 e Current installments of long-term debt 200,000 f, g Lawsuit liability 80,000
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22-16 Solutions Manual to Accompany Applied Auditing, 2014 Edition Income taxes payable 21,200 h Deferred tax liability 5,000 Total current liabilities P 426,000 Long-Term Debt Mortgage payable P 800,000 f Note payable 400,000 g Deferred tax liability 23,000 Total long-term debt 1,223,000 Total Liabilities P1,649,000 Shareholders’ Equity Ordinary shares, authorized 100,000 shares of P50 par value; issued 40,000 shares; outstanding 39,800 shares P2,000,000 i Additional paid-in capital 231,000 i Total paid-in capital P2,231,000 Accumulated Other Comprehensive Loss Unrealized decrease in value of long-term investment (4,300) j Retained Earnings 1,075,400 Total P3,302,100 Less: Cost of treasury shares (6,400 ) c Total Shareholders’ Equity 3,295,700 Total Liabilities and Shareholders’ Equity P4,944,700 1 Alternatively, this could be reported under Long-Term Investments Explanation of Amounts a Cash, per unaudited statement of financial position P225,000 Less: Unrecorded checks in payment of accounts payable (14,000) NSF check not recorded (2,000) Cash restricted for building purposes (reported in other assets) (100,000 ) Corrected balance P109,000 b Accounts receivable (net), per unaudited statement of financial position P345,700 Add charge-back for NSF check [see (a)] 2,000 Less: Officer’s note receivable (reported in other assets) (30,000 ) Corrected balance P317,700 c Investments, per unaudited statement of financial position P 57,700 Less: Long-term investment [reported separately, see (j)] (51,300) Treasury shares (reported in shareholders’ equity) (6,400 )
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Preparation of Audited Financial Statements 22-17 Corrected balance P 0 d Land, per unaudited statement of financial position P450,000
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  • Depreciation, Generally Accepted Accounting Principles, audited financial statements, Shareholders’ Equity, Accompany Applied Auditing

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