ori Vega and Company had the following liabilities as of December 31, 2021: Accounts Payable of P55,000; Unsecured Notes, 9%, due 7/1/2022 of P400,000; Accrued Expenses of P35,000; Contingent Liability of P450,000; Deferred Tax Liability of P25,000; and Senior Bonds, 7%, due 3/31/2022 of P1,000,000. The contingent liability is an accrual of possible loss on a P1,000,000 lawsuit filed against the entity. The legal counsel expects the suit to be settled in 2020 and has estimated that the entity will be liable for damages in the range of P450,000 to P750,000. The deferred tax liability is not related to an asset for financial reporting and is expected to reverse in 2023. Required: Prepare the notes to the financial statements labeled “Current Liabilities”
Tori Vega and Company had the following liabilities as of December 31, 2021: Accounts Payable
of P55,000; Unsecured Notes, 9%, due 7/1/2022 of P400,000; Accrued Expenses of P35,000;
due 3/31/2022 of P1,000,000.
The contingent liability is an accrual of possible loss on a P1,000,000 lawsuit filed
against the entity. The legal counsel expects the suit to be settled in 2020 and has
estimated that the entity will be liable for damages in the range of P450,000 to P750,000.
The deferred tax liability is not related to an asset for financial reporting and is expected
to reverse in 2023.
Required: Prepare the notes to the financial statements labeled “Current Liabilities”
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
