Solution Manual For Intermediate
Accounting 3 by Valix
1D 1D 1D 6 A 1C 1A 1C 1B
2A 2C 2D 7 D 2C 2D 2A 2B
3A 3B 3D 8 A 3C 3A 3B 3C
4D 4B 4D 9 D 4C 4C 4D 4B
5B 5B 5A 10 B 5D 5C 5C
Problem 2-1
Dillema Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets Notes
Cash P 800,000
Account Receivable—net 700,000
Prepaid Expenses 160,000
Inventory 1,000,000
Financial Assets over Fair Value 440,000
Total Current Assets P 3,100,000
Noncurrent Assets
Property, Plant, and Equipment (1) 6,700,000
Intangible Asset (2) 200,000
Total Noncurrent Assets 6,900,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Total assets P 10,000,000
LIABILITIES AND SHARESHOLDER’S EQUITY
Current Liabilities
Trade Payables (3) 1,200,000
Total Current Liabilities 1,200,000
Noncurrent Liabilities
Notes Payable 250,000
Bonds Payable—net 1,800,000
Total Noncurrent Liabilities 2,050,000
Equity
Share Capital 3,000,000
Reserves (4) 250,000
Retained Earnings (5) 3,750,000
, Treasury Shares (250,000)
Shareholder’s Equity 6,750,000
Total Liabilities and Shareholder’s Equity P 10,000,000
Notes
1 Building 5,000,000 Accumulated Depreciation (300,000)
Equipment 1,500,000 Property, Plant and Equipment 6,700,000
Land 500,000
2 Patent 200,000 5 Retained Earnings 4,000,000
Intangible Asset 200,000 Canceled appropriation 150,000
Treasury Appropriation (250,000)
3 Accounts Payable 900,000 Loss on Lawsuit (100,000)
Accrued Expenses 200,000 Accrued Interest (50,000)
Lawsuit Liability 100,000 TOTAL 3,750,000
Trade and other Payables 1,200,000
Retained Earnings 400,000
4 Appropriated for Treasury Shares Interest Payable 50,000
250,000 Lawsuit Liability 100,000
Retained Earnings – Appropriated 250,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Problem 2-2
Socorro Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets Notes
Cash and Cash Equivalents (1) P 700,000
Account Receivable—net (2) 700,000
Store Supplies 50,000
Inventory 600,000
Restricted Cash 300,000
Total Current Assets P 2,350,000
Noncurrent Assets
Property, Plant and Equipment (3) 4,150,000
Long-term Investments (4) 1,500,000
Intangible Assets (5) 550,000
Advances to officers 150,000
Total Noncurrent Assets 6,350,000
Total assets P 8,700,000
LIABILITIES AND SHARESHOLDER’S EQUITY
Current Liabilities
Trade Payables (6) 750,000
Current Portion of Long-term debt 100,000
Total Current Liabilities 850,000
, Noncurrent Liabilities
Serial Bonds Payable 400,000
Unearned Income 350,000
Total Noncurrent Liabilities 750,000
Equity
Share Capital (7) 5,150,000
Reserves (8) 1,050,000
Retained Earnings (9) 1,200,000
Treasury Shares (300,000)
Shareholder’s Equity 7,100,000
Total Liabilities and Shareholder’s Equity P 8,700,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Notes
1 Cash 500,000 3 Building 3, 500,000
Money Market 200,000 Equipment 1,000,000
Total Cash and Cash Equivalents 700,000 Land 400,000
Accumulated Depreciation (750,000)
2 Accounts Receivable 750,000 Property, Plant and Equipment 4,150,000
Allowance for Doubtful accounts 50,000
Total Cash and Cash Equivalents 700,000
7 Share Capital, beg 5,000,000
4 Cash 500,000 Stock Dividend 150,000
Money Market 200,000 Share Capital, end 5,150,000
Total Cash and Cash Equivalents 700,000
8 Share Premium 250,000
5 Patent 250,000 Retained Earnings for Plant exp 500,000
Trademark 300,000 Retained Earnings for Treasury 300,000
Intangible Assets 550,000 Reserves 1,050,000
6 Accounts Payable 500,000 9 Retained Earnings, beg 1,500,000
Income Tax Payable 150,000 Appropriation for Treasury 300,000
Notes Payable 100,000 Retained Earnings, end 1,200,000
Trade Payables 750,000
Problem 2-3
Magna Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets
Accounts Receivable, net
Inventories
Prepaid Expenses
Short Term Investment
Total Current Assets 2,100,000
Noncurrent Assets
, Total assets P 9,850,000
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Trade Payables (5) 1,000,000
Total Current Liabilities 1,000,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Equity
Preference share, no par, P5 stated value,
authorized 300,000 shares, issued 150,000 shares 750,000
Ordinary share, P20 par value, authorized 400,000
Shares, issued 100,000 shares 2,000,000
Reserves (6) 1,450,000
Retained Earnings 2,450,000
Total Shareholder’s Equity 6,650,000
Total Liabilities and Shareholder’s Equity P 9,850,000
Notes:
1 Accounts Receivable 750,000 4 Franchise 100,000
Allowance for Doubtful accounts 50,000 Goodwill 200,000
Total Cash and Cash Equivalents 700,000 Intangible Assets 300,000
2 Building 5,000,000 5 Accounts Payable 400,000
Equipment 1,400,000 Income Tax Payable 150,000
Land 1,250,000 Notes Payable 450,000
Accumulated Depreciation (2,000,000) Trade Payables 1,000,000
Property, Plant and Equipment 5,650,000
6 Excess of Stated 250,000
3 Investment Property 1,500,000 Excess of Par 1,000,000
Investment in Securities 250,000 Appropriation for Contingencies 200,000
Cash surrender value 50,000 Share Capital, end 1,450,000
Total Cash and Cash Equivalents 1,800,000
Problem 2-4
Boracay Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets
1,000,000
Financial Asset – Fair Value
Inventory 1,000,000
Office Supplies
Total Current Assets 3,650,000
Accounting 3 by Valix
1D 1D 1D 6 A 1C 1A 1C 1B
2A 2C 2D 7 D 2C 2D 2A 2B
3A 3B 3D 8 A 3C 3A 3B 3C
4D 4B 4D 9 D 4C 4C 4D 4B
5B 5B 5A 10 B 5D 5C 5C
Problem 2-1
Dillema Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets Notes
Cash P 800,000
Account Receivable—net 700,000
Prepaid Expenses 160,000
Inventory 1,000,000
Financial Assets over Fair Value 440,000
Total Current Assets P 3,100,000
Noncurrent Assets
Property, Plant, and Equipment (1) 6,700,000
Intangible Asset (2) 200,000
Total Noncurrent Assets 6,900,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Total assets P 10,000,000
LIABILITIES AND SHARESHOLDER’S EQUITY
Current Liabilities
Trade Payables (3) 1,200,000
Total Current Liabilities 1,200,000
Noncurrent Liabilities
Notes Payable 250,000
Bonds Payable—net 1,800,000
Total Noncurrent Liabilities 2,050,000
Equity
Share Capital 3,000,000
Reserves (4) 250,000
Retained Earnings (5) 3,750,000
, Treasury Shares (250,000)
Shareholder’s Equity 6,750,000
Total Liabilities and Shareholder’s Equity P 10,000,000
Notes
1 Building 5,000,000 Accumulated Depreciation (300,000)
Equipment 1,500,000 Property, Plant and Equipment 6,700,000
Land 500,000
2 Patent 200,000 5 Retained Earnings 4,000,000
Intangible Asset 200,000 Canceled appropriation 150,000
Treasury Appropriation (250,000)
3 Accounts Payable 900,000 Loss on Lawsuit (100,000)
Accrued Expenses 200,000 Accrued Interest (50,000)
Lawsuit Liability 100,000 TOTAL 3,750,000
Trade and other Payables 1,200,000
Retained Earnings 400,000
4 Appropriated for Treasury Shares Interest Payable 50,000
250,000 Lawsuit Liability 100,000
Retained Earnings – Appropriated 250,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Problem 2-2
Socorro Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets Notes
Cash and Cash Equivalents (1) P 700,000
Account Receivable—net (2) 700,000
Store Supplies 50,000
Inventory 600,000
Restricted Cash 300,000
Total Current Assets P 2,350,000
Noncurrent Assets
Property, Plant and Equipment (3) 4,150,000
Long-term Investments (4) 1,500,000
Intangible Assets (5) 550,000
Advances to officers 150,000
Total Noncurrent Assets 6,350,000
Total assets P 8,700,000
LIABILITIES AND SHARESHOLDER’S EQUITY
Current Liabilities
Trade Payables (6) 750,000
Current Portion of Long-term debt 100,000
Total Current Liabilities 850,000
, Noncurrent Liabilities
Serial Bonds Payable 400,000
Unearned Income 350,000
Total Noncurrent Liabilities 750,000
Equity
Share Capital (7) 5,150,000
Reserves (8) 1,050,000
Retained Earnings (9) 1,200,000
Treasury Shares (300,000)
Shareholder’s Equity 7,100,000
Total Liabilities and Shareholder’s Equity P 8,700,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Notes
1 Cash 500,000 3 Building 3, 500,000
Money Market 200,000 Equipment 1,000,000
Total Cash and Cash Equivalents 700,000 Land 400,000
Accumulated Depreciation (750,000)
2 Accounts Receivable 750,000 Property, Plant and Equipment 4,150,000
Allowance for Doubtful accounts 50,000
Total Cash and Cash Equivalents 700,000
7 Share Capital, beg 5,000,000
4 Cash 500,000 Stock Dividend 150,000
Money Market 200,000 Share Capital, end 5,150,000
Total Cash and Cash Equivalents 700,000
8 Share Premium 250,000
5 Patent 250,000 Retained Earnings for Plant exp 500,000
Trademark 300,000 Retained Earnings for Treasury 300,000
Intangible Assets 550,000 Reserves 1,050,000
6 Accounts Payable 500,000 9 Retained Earnings, beg 1,500,000
Income Tax Payable 150,000 Appropriation for Treasury 300,000
Notes Payable 100,000 Retained Earnings, end 1,200,000
Trade Payables 750,000
Problem 2-3
Magna Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets
Accounts Receivable, net
Inventories
Prepaid Expenses
Short Term Investment
Total Current Assets 2,100,000
Noncurrent Assets
, Total assets P 9,850,000
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Trade Payables (5) 1,000,000
Total Current Liabilities 1,000,000
exams include:Multiple Choice Questions (MCQs): These are frequently used to assess students’ understanding of business terminology, theories, and principles.Case Studies: A
staple of business exams, case studies present students with real-world business scenarios and ask them to apply their knowledge to solve complex problems. Case studies
evaluate students' ability to think critically and make strategic decisions.Essay/Short Answer Questions: These types of questions test the student’s ability to explain and analyze
business concepts in a detailed and coherent manner.1.3. Skills Tested in Business ExamsCritical Thinking and Problem-Solving: Business exams often include case studies that
challenge students to apply theoretical knowledge to real-life situations. These tests assess decision-making skills, as well as the ability to evaluate various business
alternatives.Quantitative Analysis: For subjects like finance or economics, business exams often require students to perform calculations and interpret data. The ability to analyze
financial statements, project revenues, and manage budgets is essential.Communication and Writing Skills: Business exams may require students to present ideas clearly and
concisely. Students must convey complex concepts in a way that demonstrates their understanding of business principles.1.4. Preparing for Business ExamsPreparing for business
exams involves mastering both conceptual understanding and practical application. Students are encouraged to study theories and frameworks but also to keep up-to-
Equity
Preference share, no par, P5 stated value,
authorized 300,000 shares, issued 150,000 shares 750,000
Ordinary share, P20 par value, authorized 400,000
Shares, issued 100,000 shares 2,000,000
Reserves (6) 1,450,000
Retained Earnings 2,450,000
Total Shareholder’s Equity 6,650,000
Total Liabilities and Shareholder’s Equity P 9,850,000
Notes:
1 Accounts Receivable 750,000 4 Franchise 100,000
Allowance for Doubtful accounts 50,000 Goodwill 200,000
Total Cash and Cash Equivalents 700,000 Intangible Assets 300,000
2 Building 5,000,000 5 Accounts Payable 400,000
Equipment 1,400,000 Income Tax Payable 150,000
Land 1,250,000 Notes Payable 450,000
Accumulated Depreciation (2,000,000) Trade Payables 1,000,000
Property, Plant and Equipment 5,650,000
6 Excess of Stated 250,000
3 Investment Property 1,500,000 Excess of Par 1,000,000
Investment in Securities 250,000 Appropriation for Contingencies 200,000
Cash surrender value 50,000 Share Capital, end 1,450,000
Total Cash and Cash Equivalents 1,800,000
Problem 2-4
Boracay Company
Statement of Financial Position
December 31, 2019
ASSETS
Current Assets
1,000,000
Financial Asset – Fair Value
Inventory 1,000,000
Office Supplies
Total Current Assets 3,650,000
