Review for the Quiz

At the end of the year, Happy Brew Café reported total assets of ₱1,200,000. The total liabilities amounted to ₱500,000, while the owner's capital was ₱800,000. What is the missing account that would complete the statement of financial position?

• a. Current Asset = ₱100,000
  

• b. Drawings = ₱100,000

• c. Retained Earnings = ₱100,000

• d. Current Liability = ₱100,000

Answer explanation

Drawings is when the owner takes money or assets out of the business for personal use. It's not an expense, but it reduces owner’s equity.

So:

• Actual equity (from Assets - Liabilities) = ₱700,000

• Owner's Capital = ₱800,000

• Drawings = ₱100,000

Why the other choices are incorrect:

• a. Current Asset = ₱100,000 – Doesn’t help balance the accounting equation; assets already given.

• c. Retained Earnings = ₱100,000 – Used for corporations; the question implies a sole proprietorship.

• d. Current Liability = ₱100,000 – Liabilities are already known and correct at ₱500,000.

Urban Greens Market has total assets of ₱900,000 and owner’s equity of ₱600,000. If the company has current liabilities of ₱100,000, how much are the non-current liabilities?

• a. ₱100,000

• b. ₱200,000

• c. ₱300,000

• d. ₱400,000

• Total Liabilities and Equity = ₱1,500,000

• Current Assets:
    • Inventory = ₱200,000
    • Accounts Receivable = ₱100,000

• Non-current Assets = ₱1,000,000

• Find: Missing Current Asset

• a. Land = ₱100,000

• b. Doubtful Accounts = ₱200,000

• c. Prepaid Expense = ₱200,000

• d. Intangible Assets= ₱100,000

At year-end, Bluewave Construction reported total assets amounting to ₱2,000,000. The company has current liabilities of ₱300,000 and non-current liabilities of ₱700,000. What is the owner’s equity?

• a. ₱1,000,000

• b. ₱900,000

• c. ₱800,000

• d. ₱700,000

EcoVibe Manufacturing shows total assets of ₱1,250,000 in its financial report. Its non-current liabilities amount to ₱250,000 and owner’s equity is ₱600,000. If the current assets total ₱450,000, how much are the current liabilities?

• a. ₱150,000

• b. ₱400,000

• c. ₱250,000

• d. ₱300,000

Answer explanation

Disregard the given Current Assets

Total Assets = ₱1,800,000
Current Assets = ₱600,000
Owner’s Equity = ₱1,200,000
Non-current Liabilities = ₱300,000
Find Current Liabilities.

• a. ₱200,000

• b. ₱300,000

• c. ₱400,000

• d. ₱500,000

Answer explanation

Disregard Current Asset given

Crescent Furniture has current assets of ₱250,000 and non-current assets of ₱750,000. The current liabilities are ₱400,000 and owner’s equity amounts to ₱500,000. What is the amount of non-current liabilities?

• a. ₱50,000
  

• b. ₱100,000
  

• c. ₱150,000
  

• d. ₱200,000

NextGen Systems has total liabilities of ₱350,000 and owner’s equity of ₱650,000. The company’s current assets are valued at ₱300,000. How much are the non-current assets?

• a. ₱500,000
  

• b. ₱600,000
  

• c. ₱700,000
  

• d. ₱800,000

Gold Harvest Trading

• Current Assets = ₱350,000

• Non-current Assets = ₱650,000

• Total Liabilities = ₱500,000

• Find: Owner’s Equity

• a. ₱300,000
  

• b. ₱400,000
  

• c. ₱500,000
  

• d. ₱600,000

Island Bloom Resorts reported total assets of ₱800,000. The non-current assets are ₱500,000, and owner’s equity is ₱600,000. How much are the current assets?

• a. ₱200,000
  

• b. ₱300,000
  

• c. ₱400,000
  

• d. ₱500,000