Solution Manual For
Intermediate Accounting VOL 3 Valix
Problem 2-21
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
FRANZ KYLLE POCSON
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
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
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
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
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
Total Liabilities and Shareholder’s Equity P 8,700,000
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
1,800,000
, 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
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
Noncurrent Liabilities
Notes Payable 300,000
Bonds Payable, net (2,000,000 – 100,000) 1,900,000
Total Noncurrent Liabilities 2,200,000
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
Intermediate Accounting VOL 3 Valix
Problem 2-21
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
FRANZ KYLLE POCSON
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
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
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
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
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
Total Liabilities and Shareholder’s Equity P 8,700,000
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
1,800,000
, 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
programs.6.2. Challenges in Law ExamsFor law students, the greatest challenge is often the need for extensive memorization and the ability to recall vast amounts of information
quickly. In addition to learning complex legal principles and precedents, students must also master the art of legal reasoning, which involves not only remembering case law but
also understanding its application in different contexts. Law students often need to differentiate between nuanced legal principles, which can be difficult for those without
experience in the field.Moreover, law exams tend to be long and require detailed written responses. These exams test the student’s ability to construct well-organized,
persuasive arguments within a limited amount of time. Many law students report difficulty with time management, as they must balance legal analysis with the need for coherent
and concise writing.6.3. Challenges in Mathematics ExamsMathematics exams present their own unique set of challenges. The primary difficulty lies in the precision required. A
small mistake in calculations, a misstep in applying a formula, or an incorrect assumption can lead to incorrect answers. Mathematics exams demand a high level of attention to
detail and logical consistency. Additionally, students are often required
Noncurrent Liabilities
Notes Payable 300,000
Bonds Payable, net (2,000,000 – 100,000) 1,900,000
Total Noncurrent Liabilities 2,200,000
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
