3. An entity reports total current assets of P3,000,000, total noncurrent assets of P7,000,000, total liabilities of P4,000,000, and profit of P2,000,000 for the year ended December 31, 20x1. The entity's financial statements are authorized for issue on April 3, 20x2. The following events took place after December 31, 20x1: a. Equipment with carrying amount of P300,000 was sold for P380,000 on January 2, 20x2. Because of the sale, the entity included the equipment in the current assets section of the December 31, 20x1 statement of financial position. As of December 31, 20x1, the entity's management has no plan on selling the equipment. The sale is properly recorded in 20x2. b. A notice of collection was received from a bank on January 31, 20x2. Apparently, the debtor, whose P500,000 bank loan was guaranteed by the entity, defaulted in its 3rd and

3. An entity reports total current assets of P3,000,000, total noncurrent assets of P7,000,000, total liabilities of P4,000,000, and profit of P2,000,000 for the year ended December 31, 20x1. The entity's financial statements are authorized for issue on April 3, 20x2. The following events took place after December 31, 20x1: a. Equipment with carrying amount of P300,000 was sold for P380,000 on January 2, 20x2. Because of the sale, the entity included the equipment in the current assets section of the December 31, 20x1 statement of financial position. As of December 31, 20x1, the entity's management has no plan on selling the equipment. The sale is properly recorded in 20x2. b. A notice of collection was received from a bank on January 31, 20x2. Apparently, the debtor, whose P500,000 bank loan was guaranteed by the entity, defaulted in its 3rd and

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 4MCQ

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