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    Bryan Ken
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    DM Corporation provided a trial balance on December 31, 2X20 that had been adjusted except for income tax expense. The document lists account balances and additional information about accounts receivable and income tax payments and rates. It then provides requirements to calculate total current assets, total current liabilities, and retained earnings based on the information in the trial balance.

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    DM Corporation provided a trial balance on December 31, 2X20 that had been adjusted except for income tax expense. The document lists account balances and additional information about accounts receivable and income tax payments and rates. It then provides requirements to calculate total current assets, total current liabilities, and retained earnings based on the information in the trial balance.

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    © All Rights Reserved
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    1K views1 page

    10

    Uploaded by

    Bryan Ken
    DM Corporation provided a trial balance on December 31, 2X20 that had been adjusted except for income tax expense. The document lists account balances and additional information about accounts receivable and income tax payments and rates. It then provides requirements to calculate total current assets, total current liabilities, and retained earnings based on the information in the trial balance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    DM Corporation provided the following trial balance on December 31, 2X20 which had been adjusted, except for

    income
    tax expense:

    Cash 675,000
    Accounts receivable (net) 2,695,000
    Inventory 2,185,000
    Property, plant, and equipment (net) 10,245,000
    Accounts payable and accrued liabilities 1,800,000
    Income tax payable 1,500,000
    Deferred tax liability 750,000
    Share capital 2,500,000
    Share premium 3,000,000
    Retained earnings, January 1 3,350,000
    Net sales and other revenue 15,000,000
    Cost and expenses 10,000,000
    Income tax expense 2,100,000
    27,900,000 27,900,000

    The accounts receivable included P1,000,000 due from customers and payable in quarterly installments of P125,000. The
    last payment is due December 30, 2X22. During the year, the estimated tax payment of P600,000 was charged to income
    tax expense. The income tax rate is 30% on all types of income.

    Requirement: On December 31, 2X20, compute for (3 items x 5 points):

    a. Total current assets

    Cash P 675,000
    Accounts Receivable 2,195,000
    Inventory 2,185,000
    Total Current Asset P 5,055,000

    b. Total current liabilities

    Accounts payable and accrued liabilities P 1,800,000


    Income tax payable 900,000
    Total Current Liabilities P 5,055,000

    c. Retained earnings
    Net sales and other revenue P 15,000,000
    Less: Cost and expenses 10,000,000
    Income before tax 5,000,000
    Less: Income Tax 1,500,000
    Net Income 3,500,000
    Add: Retained Earnings, January 1 3,350,000
    Retained Earnings, December 31 P 6,850,000

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