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Homework answers / question archive / Persevere Company provided the following balances on December 31, 2021: Cash and cash equivalents P1,000,000 Trade and Other Receivables 950,000 Inventory 500,000 Financial assets at fair value through PEL 500,000 Financial assets at fair value through OC! 800,000 Property, Plant and Equipment |1,500,000 Further analysis of Persevere Company's accounts revealed the following: 1
Persevere Company provided the following balances on December 31, 2021: Cash and cash equivalents P1,000,000 Trade and Other Receivables 950,000 Inventory 500,000 Financial assets at fair value through PEL 500,000 Financial assets at fair value through OC! 800,000 Property, Plant and Equipment |1,500,000 Further analysis of Persevere Company's accounts revealed the following: 1. Trade and other receivables included the following: . Advances to an executive officer for P250,000 which is due on March 1, 2023. . Customer credit balance of P60,000 which was deducted in relation to goods returned in 2021. . Equity over the assigned accounts of P120,000; the assigned accounts amounted to P200,000 while the related note balance was P80,000. 2. Property, Plant and Equipment includes a plot of land in which Persevere Company has committed to a plan to sell it and currently active in locating a buyer to complete the plan. The carrying value of the land included in the account was P675,000 while its fair value less cost to sell is P600,000. Requirement: What is the amount reported as current assets on December 31, 2021? What is the amount recorded as non-current assets on December 31, 2021?
1.
| Total Current Assets,12/31/2021 | ? 3,440,000 |
2.
| Total Non Current Assets,12/31/2021 | ? 1,875,000 |
Step-by-step explanation
| Cash and cash equivalents | ? 1,000,000 |
| Trade and Other Receivables** | 840,000 |
| Inventory | 500,000 |
| Financial Asset at fair value through P&L | 500,000 |
| Non Current Assets Held for sale*** | 600,000 |
|
Total Current Assets |
? 3,440,000 |
**
| Trade and Other Receivables | 950,000 |
| Less: Advances to executive officers | - 250,000 |
|
Add: Customer credit balances should not be offset against receivables |
60,000 |
|
Note Balance |
80,000 |
|
Adjusted Trade & Other Receivables |
? 840,000 |
***
Fair value less cost to sell of land is used (PFRS 5- Non-current Assets Held for Sale and Discontinued Operations)
| Advances to an executive officer | ? 250,000 |
| Financial Asset at fair value through OCI | 800,000 |
|
Property, Plant & Equipment 1,500,000-675,000 |
825,000 |
|
Total Non Current Assets |
? 1,875,000 |
PAS 1-Presentation of Financial Statement state that an entity shall classify an asset as current when:
(a) it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(b) it holds the asset primarily for the purpose of trading;
(c) it expects to realize the asset within twelve months after the reporting period; or
(d) the asset is cash or a cash equivalent (as defined in PAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
An entity shall classify all other assets as non?current
