Answered by Mary Grace De Ramos Emmanuel Mima Haze Nagas

2. Problem 1
From the account balances given below for Surf Corp.
you are tasked to prepare the statement of financial
position. Observe proper classifications. In thousand
pesos.

3. Accounts Title Amount
Accounts Receivable P 400
Advances to officers not currently collectible 100
Sinking Fund 400
Building 5,000
Long-term refundable deposit 50
Cash and Cash equivalent 500
Cash Surrender value 60
Equipment 1,000
Lease rights 100
Accrued interest income 10
Inventories 1,300
Land 1,500
Land held for speculation 500
Notes Receivable 250
Computer Software 3,250

4. Accounts Title Amount
Prepaid Expenses P 70
Trading Securities 280
Unearned rent income 40
Retained earnings (deficit) (1,800)
Share premium – preference shares 500
Premium on bonds payable 1,000
Preference share capital 2,000
Share premium – Ordinary 200
Notes payable 300
SSS payable 10
Accounts payable 400
Accrued salaries 100
Accumulated depreciation – building 2,000
Accumulated depreciation – equipment 200
Allowance for doubtful accounts 20

5. Accounts Title Amount
Bonds payable P 5,000
Dividends payable 120
Ordinary share capital 5,000
Withholding tax payable 30
Preference share redemption fund 350

6. Balance Sheet
List of an entity’s assets, liabilities, and owner’s
equity as of a specific date. Also called the
Statement of financial position.

7. Surf Corporation
Statement of Financial Position
ASSETS
Current asset:
Cash and Cash equivalents Php 500,000.00
Trading securities 280,000.00
Inventories 1,300,000.00
Prepaid Expense 70,000.00
Trade and other receivables 640,000.00
Total current Assets Php 2,790,000.00
Non Current asset
Property, Plant and Equipment Php 5,300,000.00
Long-term Investments 1,310,000.00
Intangible Assets 3,350,000.00
Other Non Current Assets 150,000.00
Total Non Current Assets 10,110,000.00
TOTAL ASSETS Php 12,900,000.00

8. Trade and other Receivable
Accounts Receivable Php 400,000.00
Notes Receivable 250,000.00
Accrued Interest Income 10,000.00
Allowance for doubtful Accounts (20,000.00)
Total Php 640,000.00
Property, Plant and Equipment
Cost Accum. Dep Book value
Land Php 1,500,000.00 - 1,500,000.00
Building 5,000,000.00 2,000,000.00 3,000,000.00
Equipment 1,000,000.00 200,000.00 800,000.00
TOTAL Php 7,500,000.00 2,200,000.00 5,300,000.00

9. Long Term Investment
Land held for speculation Php 500,000.00
Sinking fund 400,000.00
Preference share redemption fund 350,000.00
Cash surrender value 60,000.00
Total Php 1,310,000.00
Intangible Assets
Computer software Php 3,250,000.00
Lease rights 100,000.00
Total Php 3,350,000.00
Other Non Current Assets
Advances to officers not currently collectible Php 100,000.00
Long-term refundable deposits 50,000.00
Total Php 150,000.00

10. LIABILITIES and EQUITY
Current liabilties:
PHP
Trade and Other Payables 1,000,000.00
Non Current liabilities:
Bonds Payable 5,000,000.00
Premium on Bonds Payable 1,000,000.00
PHP
Total Liabilities 7,000,000.00
Shareholder's Equity:
Share Capital 7,700,000.00
Retained Earning (Deficit) (1,800,000.00)
PHP
Total Shareholder's Equity 5,900,000.00
Total Liabilities and Shareholders' PHP
Equity 12,900,000.00

11. Trade and Other Payable
Accounts Payable Php 400,000.00
Notes Payable 300,000.00
Unearned Rent Income 40,000.00
SSS Payable 10,000.00
Accrued Salaries 100,000.00
Dividends Payable 120,000.00
Withholding Tax Payable 30,000.00
Total Php 1,000,000.00
Share Capital
Preference Share Capital Php 2,000,000.00
Share Premium-Preference Share 500,000.00
Ordinary Share Capital 5,000,000.00
Share Premium- Ordinary Share 200,000.00
Total Php 7,700,000.00

12. Conclusion
If you are a shareholder of a
company, it is important that you
understand how the balance sheet
is structured, how to analyse it and
how to read it.

13. THANK
YOU! 