The following accounts are excerpt trial balance of Strawberry Corp. at December 31, 2021 has been properly adjusted except for the income tax expense adjustment. • Cash- P775,000 • Accounts receivable (net)- P2,695,000 • Inventory- P2,085,000 • Property, plant, and equipment (net)- P7,366,000 • Accounts payable and accrued liabilities- P1,701,000 • Income taxes payable- P654,000 • Deferred tax liability- P85,000 • Ordinary share capital- P2,350,000 • Additional paid-in capital- P3,680,000 • Retained earnings, 1/1/21- P3,450,000 • Net sales and other revenues- P13,360,000 • Costs and expenses- P11,180,000 • Income tax expenses- P1,179,000 Other financial data for the year ended December 31, 2021: • Included in accounts receivable is P1,200,000 due from a customer and payable in quarterly installments of P150,000. The last payment is due December 29, 2023. • The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which P20,000 is classified as a current liability. • During the year, estimated tax payments of P525,000 were charged to income tax expense. The current and future tax rate on all types of income is 30%. How much is the total current assets as of December 31, 2021? a) P5,405,000 b) P4,955,000-answer c) P5,555,000 d) P6,080,000 57. Using the data in no. 56, how much is the total current liabilities as of December 31, 2021? a) P2,440,000 b) P1,915,000 c) P1,850,000-answer d) P2,375,000
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
56. The following accounts are excerpt
properly adjusted except for the income tax expense adjustment.
• Cash- P775,000
•
• Inventory- P2,085,000
• Property, plant, and equipment (net)- P7,366,000
• Accounts payable and accrued liabilities- P1,701,000
• Income taxes payable- P654,000
•
• Ordinary share capital- P2,350,000
• Additional paid-in capital- P3,680,000
•
• Net sales and other revenues- P13,360,000
• Costs and expenses- P11,180,000
• Income tax expenses- P1,179,000
Other financial data for the year ended December 31, 2021:
• Included in accounts receivable is P1,200,000 due from a customer and payable in quarterly
installments of P150,000. The last payment is due December 29, 2023.
• The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose
in a prior year, of which P20,000 is classified as a current liability.
• During the year, estimated tax payments of P525,000 were charged to income tax expense. The
current and future tax rate on all types of income is 30%.
How much is the total current assets as of December 31, 2021?
a) P5,405,000
b) P4,955,000-answer
c) P5,555,000
d) P6,080,000
57. Using the data in no. 56, how much is the total current liabilities as of December 31, 2021?
a) P2,440,000
b) P1,915,000
c) P1,850,000-answer
d) P2,375,000
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