ADVANCED FINANCIAL ACCOUNTING AND REPORTING Problem Portion
Numbers 1 and 2 Partners!i" Formation#
A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assess assessed ed value value of P100,00 P100,000 0 with with histor historica icall cost cost of P00,00 P00,000 0 and accumul accumulate ated d deprec depreciat iation ion of P!00,000. A da" after the partnership formation, the equipment e quipment was sold for P #00,000.
B will contribute a land and building with carr"ing amount of P1,$00,000 and fair value of P1,%00,000. &he land and building are sub'ect to a mortgage pa"able amounting to P#00,000 to be assumed b" the partnership. &he partners agreed that B will have !0( capital interest in the partnership. &he partners also agreed that C will contribute sufficient cash to the partnership.
1. )hat is is the total total agreed agreed capitali* capitali*ation ation of the ABC Partners Partnership+ hip+ A. $% C. .
1,%0 1,%00, 0,00 000 0 2&'' &'''&''' &''' $,%0 $,%00, 0,00 000 0 #,00 #,000, 0,00 000 0
$. )hat is is the cash cash to be contri contributed buted b" C in the ABC Partners Partnership+ hip+ A% B. C. .
(''&' '&''' !00 ,000 -00 ,000 00,0 0,000
Numbers ) and *
Partners!i" O"eration + Ca"ital A,,ount Transa,tions#
n /anu /anuar ar" " 1, $01, $01, A, B and C form formed ed ABC ABC Partn Partner ersh ship ip with with tota totall agre agreed ed capi capita tali li*at *atio ion n of P1,000,000. P1,000,000. &he capital capital interest interest ratio of the ABC Partnership Partnership is %1 while the profit profit or loss ratio is #$%, respectivel" for A, B and C.
uring $01, A and B made additional investments of P$00,000 P$00,00 0 and P%00,000, respectivel". respectivel". At the end of $01, B and C made drawings of P#00,000 and P100,000, respectivel". n ecember #1, $01, the capital balance of B is reported at P$00,000.
#. )hat is the the net income income or net loss loss of ABC Partnersh Partnership ip for the the "ear ended ended ecember ecember #1, $01+ A% (''& (''&'' ''' ' loss loss B. 1,00 1,000, 0,00 000 0 los losss C. 00, 00,00 000 0 inco income me . 1,$00 1,$00,0 ,000 00 inc incom omee
. )hat is the the capital capital balance balance of C on ecember ecember #1, $01+ $01+ A% 1%0,000 $% ('&''' C% $00,000 D% $%0,000
Page $ Numbers (& -& and . Partners!i" O"eration + Distribution o/ "ro/it or loss#
n /anuar" 1, $01, A, B and C formed ABC Partnership with original capital contribution of P#00,000, P%00,000 and P$00,000. A is appointed as managing partner. partner.
uri uring ng $01, $01, A, B and and C made made addi additi tiona onall inve invest stme ment ntss of P%00 P%00,00 ,000, 0, P$00, P$00,00 000 0 and P#00, P#00,000 000,, respectivel". At the end of $01, A, B and C made drawings of P$00,000, P100,000 and P00,000, respectivel". At the end of $01, the capital balance of C is reported at P#$0,000. &he profit or loss agreement of the partners is as follows
10( interest on original capital contribution of the partners. 2uarterl" salar" of P0,000 and P10,000 for A and B, respectivel". Bonus to A equivalent to $0( of 3et Income after a fter interest and salar" to all partners 4emainder is to be distributed equall" among the partners.
%. )hat is is the partners partnership hip profit profit for for the "ear "ear ended ended ecember ecember #1, $01+ $01+ A. 500 500,000 B. 1,0$ 1,0$0, 0,00 000 0 C% 1&'( 1&'('& '&'' ''' ' . 5!0 5!0,000
!. )hat is A6s share in in partnershi partnership p profit for for $01+ A. B. C% .
150,0 0,000 #0 ,000 (*'&' '&''' $00,0 0,000
-. )hat is is B6s B6s share share in partner partnership ship profit profit for $01+ A. $00,0 0,000 $% 20'&''' C . % 0 ,0 0 0 . 50 ,0 00
Page $ Numbers (& -& and . Partners!i" O"eration + Distribution o/ "ro/it or loss#
n /anuar" 1, $01, A, B and C formed ABC Partnership with original capital contribution of P#00,000, P%00,000 and P$00,000. A is appointed as managing partner. partner.
uri uring ng $01, $01, A, B and and C made made addi additi tiona onall inve invest stme ment ntss of P%00 P%00,00 ,000, 0, P$00, P$00,00 000 0 and P#00, P#00,000 000,, respectivel". At the end of $01, A, B and C made drawings of P$00,000, P100,000 and P00,000, respectivel". At the end of $01, the capital balance of C is reported at P#$0,000. &he profit or loss agreement of the partners is as follows
10( interest on original capital contribution of the partners. 2uarterl" salar" of P0,000 and P10,000 for A and B, respectivel". Bonus to A equivalent to $0( of 3et Income after a fter interest and salar" to all partners 4emainder is to be distributed equall" among the partners.
%. )hat is is the partners partnership hip profit profit for for the "ear "ear ended ended ecember ecember #1, $01+ $01+ A. 500 500,000 B. 1,0$ 1,0$0, 0,00 000 0 C% 1&'( 1&'('& '&'' ''' ' . 5!0 5!0,000
!. )hat is A6s share in in partnershi partnership p profit for for $01+ A. B. C% .
150,0 0,000 #0 ,000 (*'&' '&''' $00,0 0,000
-. )hat is is B6s B6s share share in partner partnership ship profit profit for $01+ A. $00,0 0,000 $% 20'&''' C . % 0 ,0 0 0 . 50 ,0 00
Page # Number Admission o/ "artner b "ur,!ase# "ur,!ase#
n ecemb ecember er #1, $01, $01, the 7tatem 7tatement ent of 8inanc 8inancial ial Posit Position ion of ABC Partne Partnersh rship ip provid provided ed the following data with profit or loss ratio of 1!# Current Assets 3oncurrent Assets Assets
1,000,000 $,000,000
&otal 9iabilities A, Capital B, Capital C, Capital
!00,000 500,000 00,000 -00,000
n /anuar" 1, $015, is admitted to the partnership b" purchasing 0( of the capital interest of B at a price of P%00,000. )hat is the capital balance of B after the admission of on /anuar" 1, $015+ A. $% C. .
%0 %0,000 *'&''' $0,000 #00 #00,000
Number 0 Retirement o/ "artner#
n ecember #1, $01, ABC Partnership6s 7tatement of 8inancial Positions shows that A, B and C have capital balances of P%00,000, P#00,000 and P$00,000 with profit or loss ratio of 1#!. n /anuar" 1, $015, C retired from the partnership and received P#%0,000. At the time of C6s retirement, an asset of the partnership is undervalued. )hat is the capital balance of A after the retirement of C+ A. B. C. D%
!$ !$,%00 %#-,%00 %!$,%00 (2( (2(&''' &'''
Number 1' Retirement o/ "artners#
n ecember #1, $01, ABC Partnership6s 7tatement of 8inancial Position shows that A, B and C have capital balances of P00,000, P#00,000 and P100,000 with profit or loss ratio of 1%. n /anuar" 1, $015, C retired from the partnership and received P0,000. At the time of C6s retirement, the assets and liabilities of the partnership are properl" valued. )hat is the capital balance of B after the retirement of C+ A. B. C% .
$ $,000 #0,000 )1)1-&''' &''' #$0 #$0,000
Page Number 11 11 Partners!i" Dissolution + Admission o/ Ne3 Partner b b In4estment#
n ecemb ecember er #1, $01, $01, the 7tatem 7tatement ent of 8inanc 8inancial ial Posit Position ion of ABC Partne Partnersh rship ip provid provided ed the following data with profit or loss ratio of 1!# Current Assets 3oncurrent Assets Assets
1,#00,000 $,000,000
&otal 9iabilities A, Capital B, Capital C, Capital
#00,000 1,00,000 -00,000 500,000
n /anuar" 1, $015, is admitted to the partnership b" investing P1,000,000 to the partnership for $0( capital interest. If the all the assets of the e:isting partnership are properl" valued, what is the capital balance of C after the admission of + A% 0-'&'' &''' $% 500,000 C% 0,000 D% 1,$00,000
Numbers 12 and 1) Admission o/ ne3 "artner b in4estment#
n ecemb ecember er #1, $01, $01, the 7tatem 7tatement ent of 8inanc 8inancial ial Posit Position ion of ABC Partne Partnersh rship ip provid provided ed the following data with profit or loss ratio of %1 Current Assets 3oncurrent Assets Assets
1,%00,000 $,000,000
&otal 9iabilities A, Capital B, Capital C, Capital
%00,000 1,100,000 1,$00,000 -00,000
n /anuar" 1, $015, is admitted to the partnership b" investing P%00,000 to the partnership for 10( capital interest. &he total agreed capitali*ation of the new partnership is P#,000,000.
1$. )hat is the capital balance balance of after his admission admission to the partnership+ partnership+ A. $% C. .
%00,0 0,000 )''&''' #%0 ,000 00,0 0,000
1#. )hat is the capital balance balance of C after the admission admission of to the partnership+ partnership+ A% B. C. .
('&' '&''' $0 ,000 %00 ,000 -0,0 0,000
Page % Numbers 1* and 1( Partners!i" Li5uidation + Lum" 6um Li5uidation#
n ecember #1, $01, the 7tatement of 8inancial Position of ABC Partnership with profit or loss ratio of !1# of partners A, B and C respectivel", revealed the following data Cash 4eceivable from A ther noncash assets
1,000,000 %00,000 $,000,000
ther 9iabilities $,000,000 Pa"able to B 1,000,000 Pa"able to C 100,000 A, Capital -00,000 B, Capital ;!%0,000< C, Capital #%0,000 n /anuar" 1, $015, the partners decided to liquidate the partnership. All partners are legall" declared to be personall" insolvent. &he other noncash assets were sold for P1,%00,000. 9iquidation e:penses amounting to P100,000 were incurred.
1. =ow much cash was received b" B at the end of partnership liquidation+ A% $% C% D%
2('&''' 1%0,000 $50,000 $-0,000
1%. =ow much cash was received b" C at the end of partnership liquidation+ A% $% C% D%
$-0,000 1('&''' #%0,000 $$0,000
Page !
Numbers 1-& 1. and 1 Partners!i" Li5uidation + Installment Li5uidation#
n ecember #1, $01, the 7tatement of 8inancial Position of ABC Partnership with profit or loss ratio of %#$ of respective partners A, B and C. showed the following information
Cash 3oncash assets
1,!00,000 1,00,000
&otal 9iabilities A, Capital B, Capital C, Capital
$,000,000 100,000 %00,000 00,000
n /anuar" 1, $015, the partners decided to liquidate the partnership in installment. All partners are legall" declared to be personall" insolvent.
As of /anuar" #1, $015, the following transactions occurred
3oncash assets with a carr"ing amount P1,000,000 were sold at a gain of P100,000. 9iquidation e:penses for the month of /anuar" amounting to P%0,000 were paid. It is estimated that liquidation e:penses amounting to P1%0,000 will be incurred for the month of 8ebruar", $015. $0( of the liabilities to third persons were settled. Available cash was distributed to the partners.
As of 8ebruar" $, $015, the following transactions occurred
4emaining noncash assets were sold at a loss of P100,000. &he final liquidation e:penses for the month of 8ebruar" amounted to P100,000. &he remaining liabilities to third persons were settled at a compromise amount of P1,%00,000. 4emaining cash was finall" distributed to the partners.
1!. )hat is the amount of cash received b" partner C on /anuar" #1, $015+ A% $% C% D%
$!0,000 2*'&''' #00,000 #%0,000
1-. )hat is the share of B in the ma:imum possible loss on /anuar" #1, $015+ A% $% C% D%
$-%,000 110,000 1$0,000 1-(&'''
1. )hat is the amount of total cash withheld on /anuar" #1, $015+ A% $% C% D%
%%0,000 1,!00,000 1&.('&''' 1,-00,000
Page -
Numbers 10& 2' and 21
Cor"orate Li5uidation#
Caga"an Compan" is e:periencing financial problems which resulted to ultimate ban>ruptc". &he statement of financial position of the entit" before liquidation is presented below Cash Inventor" 9and
100,000 #00,000 $00,000
Income ta: pa"able 7alaries pa"able 3ote pa"able ?ortgage pa"able Accounts pa"able Contributed capital eficit
$00,000 #00,000 00,000 100,000 00,000 %00,000 ;1,-00,000<
&he note pa"able is secured b" the inventor" with net reali*able value of P$%0,000. &he mortgage pa"able is secured b" the land with fair value of P1$0,000.
15. )hat is the amount received b" the holder of the note pa"able at the end of corporate liquidation+ A% $% C% D%
#$0,000 #00,000 2('&''' $!0,000
$0. )hat is the amount received b" the holder of the mortgage pa"able at the end of corporate liquidation+ A% $% C% D%
1$0,000 $00,000 1%0,000 1''&'''
$1. )hat is the amount received b" the emplo"ees at the end of corporate liquidation concerning their salaries+ A% $% C% D%
100,000 12'&''' -$,000 #00,000
Page
Numbers 22 and 2) Cor"orate Li5uidation#
7urigao Compan" is ban>rupt and has undergone corporate liquidation. Presented below is its statement of financial position before the start of liquidation Cash ?achiner" Building
#00,000 %00,000 1,$00,000
Accounts Pa"able 7alaries Pa"able Income ta: Pa"able 9oan Pa"able ?ortgage pa"able Contributed capital eficit
100,000 $00,000 #00,000 00,000 %00,000 00,000 ;#00,000<
9iquidation e:penses amounting to P!00,000 were paid. &he loan pa"able is secured b" the machiner" with fair value of P#00,000. &he mortgage pa"able is secured b" the building. At the end of liquidation, the holder of loan pa"able received P#0,000.
$$. )hat is the amount received b" the holder of accounts pa"able at the end of liquidation+ A% $% C% D%
%,000 1%,000 *'&''' !0,000
$#. )hat is the amount of net free assets available at the end of liquidation+ A% '&''' $% 0,000 C% 1$0,000 D% $00,000
Page 5
Numbers 2*& 2( and 2- 7oint Arran8ement ,lassi/ied as 7oint O"eration#
@ntit" A and @ntit" B incorporated @ntit" C to manufacture a microchip to be used b" the incorporating entities as component for their final products of cellular phones and tablets. &he contractual agreement of the incorporating entities provided that the decisions on relevant activities of @ntit" C will require the unanimous consent of bo th entities. @ntit" A and @ntit" B have rights to the assets, and obligations for the liabilities, relating to the arrangement. &he ordinar" shares of @ntit" C will be owned b" @ntit" A and @ntit" B in the ratio of !00. At the end of first operation of @ntit" C, the financial statements provided the following data Inventor" 9and Building
1,000,000 #,000,000 %,000,000
Accounts pa"able 3ote pa"able 9oan pa"able 7hare capital 4etained earnings 7ales revenue
$,000,000 1,000,000 ,000,000 1,000,000 1,000,000 %,000,000
&he contractual agreement of @ntit" A and @ntit" B also provided for the following concerning the assets and liabilities of @ntit" C
@ntit" A owns the land and incurs the loan pa"able of @ntit" C.
@ntit" B owns the building and incurs the note pa"able of @ntit" C.
&he other assets and liabilities are owned or owed b" @ntit" A and @ntit" B on the basis of their capital interest in @ntit" C. &he sales revenue of @ntit" C includes sales to @ntit" A and @ntit" B in the amount of P1,000,000 and P$,000,000, respectivel". As of the end of the first "ear, @ntit" A and @ntit" B were able to resell #0( and !0( of the inventor" coming from @ntit" C to third persons.
$. )hat is the amount of total assets to be reported b" @ntit" A concerning its interest in @ntit" C+ A% $% C% D%
%,00,000 #,000,000 )&-''&''' %,000,000
$%. )hat is the amount of total liabilities to be reported b" @ntit" B concerning its interest in @ntit" C+ A% $% C% D%
1&''&''' $,$00,000 $,00,000 $,00,000
$!. )hat is the amount of sales revenue to be reported b" @ntit" A concerning its interest in @ntit" C+ A% $% C% D%
$,#00,000 2&1''&''' #,000,000 $,%00,000
Page
10
Numbers 2. and 2 7oint Arran8ement ,lassi/ied as 7oint Venture E5uit 9et!od#
n /anuar" 1, $01, @ntit" A, a public entit", and @ntit" B, a public entit", incorporated @ntit" C which has its fiscal and operational autonom". &he contractual agreement of the incorporating entities provided that the decisions on relevant activities of @ntit" C will require the unanimous consent of both entities. @ntit" A and @ntit" B will have rights to the net assets of @ntit" C.
@ntit" A and @ntit" B invested P1,000,000 and P1,%00,000, respectivel", equivalent to 0!0 capital interest of @ntit" C. &he financial statements of @ntit" C provided the following data for its two"ear operation Net in,ome loss#
$01 $015
$00,000 ;$,000,000<
Di4idends de,lared
100,000
$-. )hat is the balance of Investment in @ntit" C to be reported b" @ntit" A in its 7tatement of 8inancial Position on ecember #1, $015+ A% 1,00,000 $% 1,00,000 C% 2*'&''' D% $00,000
$. )hat is the balance of Investment in @ntit" C to be reported b" @ntit" B in its 7tatement of 8inancial Position on ecember #1, $015+ A% 1,%00,000 $% 1,!$0,000 C% )-'&''' D% 500,000
Page 11
Numbers 20 and )' 7oint 4enture : Inter,om"an Transa,tion#
n /anuar" 1, $01, @ntit" A, a public entit", and @ntit" B, a public entit", incorporated @ntit" C b" investing P#,000,000 and P$,000,000 for capital interest ratio of !00. &he contractual agreement of the incorporating entities provided that the decisions on relevant activities of @ntit" C will require the unanimous consent of both entities. @ntit" A and @ntit" B will have rights to the net assets of @ntit" C.
&he financial statements of @ntit" C provided the following data for $01
@ntit" C reported net income of P1,000,000 for $01 and paid cash dividends of P00,000 on ecember #1, $01. uring $01, @ntit" C sold inventor" to @ntit" A with gross profit of P%0,000. @ight" percent of those inventories were resold b" @ntit" A to third persons during $01 and the remainder was resold to third persons during $015. n /ul" 1, $01, @ntit" C sold a machiner" to @ntit" B at a loss of P$0,000. At the time of sale, the machiner" has remaining useful life of $ "ears.
$5. )hat is the investment income to be reported b" @ntit" A for the "ear ended ecember #1, $01+ A% $% C% D%
!0#,000 !0!,000 (0*&''' %5-,000
#0. )hat is the balance of Investment in @ntit" C to be reported b" @ntit" B on ecember #1, $01+ A% $% C% D%
2&2*2&''' $,$1,000 $,$#,000 $,$,000
Page 1$
Numbers )1 and )2 7oint Venture + IFR6 /or 69Es Fair Value 9odel or E5uit 9et!od#
n /anuar" 1, $01, @ntit" A and @ntit" B, both 7?@s, incorporated @ntit" C, a 'ointl" controlled entit" b" investing P%00,000 each in e:change for 10,000 ordinar" shares each of @ntit" C. @ntit" A and @ntit" B each incurred P$0,000 transaction costs. &he contractual agreement of the incorporating entities provided that the decisions on relevant activities of @ntit" C will require the unanimous consent of both entities. @ntit" A and @ntit" B will have rights to the net assets of @ntit" C. 8or the "ear ended ecember #1, $01, @ntit" C reported net income of P100,000 and declared dividends in the amount of P#0,000. n ecember #1, $01, the ordinar" shares of @ntit" C are quoted at P%!. #1. If @ntit" A elected fair value model to account its investment in @ntit" C, what is the net effect on @ntit" A6s profit or loss for the "ear ended ecember #1, $01+ A% $% C% D%
((&''' net "ro/it !0,000 net profit 1%,000 net profit 0,000 net profit
#$. If @ntit" B elected equit" method to account its investment in @ntit" C, what is the carr"ing amount of @ntit" B6s Investment in @ntit" C on ecember #1, $01+ A% $% C% D%
%$0,000 %0,000 %#%,000 (((&'''
Numbers )) and )* 7oint Venture + IFR6 /or 69Es Cost 9et!od or E5uit 9et!od#
n /anuar" 1, $01, @ntit" A and @ntit" B, both 7?@s, incorporated @ntit" C, a 'ointl" controlled entit" b" investing P$00,000 each in e:change for $0,000 ordinar" shares each of @ntit" C. @ntit" A and @ntit" B each incurred P10,000 transaction costs. &he contractual agreement of the incorporating entities provided that the decisions on relevant activities of @ntit" C will require the unanimous consent of both entities. @ntit" A and @ntit" B will have rights to the net assets of @ntit" C. 8or the "ear ended ecember #1, $01, @ntit" C reported net income of P%0,000 and declared dividends in the amount of P10,000. n ecember #1, $01, the investment in @ntit" C has value in use of P$1%,000. ##. If @ntit" A elected cost method to account its Investment in @ntit" C, what is the carr"ing amount of @ntit" A6s Investment in @ntit" C on ecember #1, $01+ A% $% C% D%
21'&''' $1%,000 $#0,000 $00,000
#. If @ntit" B elected equit" method to account its Investment in @ntit" C, what is the net effect in @ntit" B6s profit or loss for the "ear ended ecember #1, $01+ A% $%,000 net profit $% %,000 net profit C% 1'&''' net "ro/it D% 1%,000 net profit
Page 1#
Number )( Installment sales#
3i>>o Compan", which began operations on /anuar" %, $01, appropriatel" uses the installment method of revenue recognition. &he following information pertains to the operations for $01 and $015
7ales Collections from $01 sales $015 sales Accounts written off from $01 sales $015 sales ross profit rates
2'1
2'10
#00,000
%0,000
100,000
%0,000
1%0,000
$%,000
-%,000
1%0,000
#0(
0(
)hat amount should be reported as deferred gross profit on ecember #1, $015+ A% .(&''' B. 0,000 C. 11$,000 . 1$%,000
Numbers )- and ). Installment sales#
Appliance Compan" reports gross profit on the installment basis. &he following data are av ailable
Installment sales Cost of goods installment sales ross profit
2'1
2'10
2'2'
$0,000 10,000 !0,000
$%0,000 11,$%0 !,-%0
#00,000 $1!,000 ,000
%,000
-%,000 -,%00
-$,%00 0,000 !$,%00
1$,%00 !,%00
1%,000 !,000 1!,000 5,000
Colle,tions
$01 installment contracts $015 installment contracts $0$0 installment contracts De/aults Dnpaid balance of $01 installment contracts Ealue assigned to repossessed merchandise Dnpaid balance of $015 installment contracts Ealue assigned to repossessed merchandise
#!. )hat is the reali*ed gross profit before loss on repossession for $0$0+ A. $% C. .
5,--% (.&-2( ,5-% %!,!
%$1. )hat is the loss on repossession for $0$0+ A. B. C% .
%,$%0 $,!00 .&(' 5,000
Page 1 Number ) Installment sales#
avao Compan" uses the installment method of income recognition. &he entit" provided the following pertinent data
Installment sales Cost of goods sold Balance of eferred ross Profit at Fear end $01 $015 $0$0
2'1
2'10
2'2'
#00,000 $$%,000
#-%,000 $%,000
#!0,000 $%$,000
%$,%00
1%,000 %,000
5,000 -$,000
)hat is the total balance of the Installment Accounts 4eceivable on ecember #1, $0$0+ A. $% C. .
$-0,000 2..&('' $-5,000 #00,000
Numbers )0 and *'
Installment 6ales#
n /anuar" 1, $01, an entit" sold a car to a customer at a price of P00,000 with a production cost of P#00,000. It is the entit"6s polic" to emplo" installment method to recogni*e gross profit from installment sales. At the time of sale, the entit" received cash amounting to $%( of the selling price and old car with tradein allowance of P%0,000. &he said old car has fair value of P1%0,000. &he customer issued a %"ear note for the balance to be pa"able in equal annual installments ever" ecember #1 starting $01. &he note pa"able is interest bearing with 10( rate due on the remaining balance of the note. &he customer was able to pa" the first annual installment and corresponding interest due. =owever, after the pa"ment of the second interest due, the customer defaulted on the second annual installment which resulted to the repossession of the car sold with appraised value of P110,000. n ecember #1, $015, the repossessed car was resold for P10,000 after reconditioning cost of P10,000.
#5. )hat is the entit"6s reali*ed gross profit for the "ear ended ecember #1, $01+ A% $% C% D%
%0,000 12'&''' 10,000 1$,000
0. )hat is the loss on repossession for the "ear ended ecember #1, $015+ A% $% C% D%
#0,000 $0,000 1'&''' 0,000
Page 1% Numbers *1& *2 and *) Re4enue Re,o8nition + Fran,!ise Fees#
n /anuar" 1, $01, an entit" granted a franchise to a franchisee. &he franchise agreement required the franchisee to pa" a nonrefundable upfront fee in the amount of P00,000 and ongoing pa"ment of ro"alties equivalent to %( of the sales of the franchisee. &he franchisee paid the nonrefundable upfront fee on /anuar" 1, $01.
In relation to the nonrefundable upfront fee, the franchise agreement required the entit" to render the following performance obligations
&o construct the franchisee6s stall with standalone selling price of P$00,000. &o deliver 10,000 units of raw materials to the franchisee with standalone selling price of P$%0,000. &o allow the franchisee to use the entit" tradename for a period of 10 "ears starting /anuar" 1, $01 with standalone selling price of P%0,000.
n /une #0, $01, the entit" completed the construction of the franchisee6s stall. n ecember #1, $01, the entit" was able to deliver #,000 units of raw materials to the franchisee. 8or the "ear ended ecember #1, $01, the franchisee reported sales revenue amounting to P100,000.
&he entit" had determined that the performance obligations are separate and distinct from one another.
1. )hat is the amount of nonrefundable upfront fee to be allocated to the construction of the franchisee6s stall+ A. $% C. .
$00,000 1-'&''' $%0,000 1$0,000
$. )hat is the amount of revenue to be recogni*ed in relation to the use of deliver" of raw materials for the "ear ended ecember #1, $01+ A% 100,000 $% $00,000 C% -'&''' D% -%,000
#. )hat is the amount of revenue to be recogni*ed in relation to the use of entit"6s tradename for the "ear ended ecember #1, $01+ A% %,000 $% *&''' C% %0,000 D% 10,000
Page 1! Numbers ** and *( Re4enue Re,o8nition + Net In,ome o/ Fran,!isor#
n /anuar" 1, $01, an entit" granted a franchise agreement to a franchisee. &he contract provided that the franchisee shall pa" an initial franchise fee of P%00,000 and ongoing pa"ment of ro"alties equivalent to ( of the sales of the franchisee.
n /anuar" 1, $01, the franchisee paid downpa"ment of P$00,000 and issued a #"ear noninterest bearing note for the balance pa"able in three equal annual installments starting ecember #1, $01. &he note has present value of P$0,1# with effective interest rate of 1$(.
n /une #0, $01, the entit" completed the performance obligation of the franchise at a cost of P#%$,1!. Aside from that, the entit" incurred indirect cost of P$$,005.
&he franchisee started operation on /ul" 1, $01 and reported sales revenue amounting to P%0,000 for the "ear ended ecember #1, $01. &he franchisee paid the first installment on its due date.
. If the collection of the note receivable is reasonabl" assured, what is the gross profit to be recogni*ed b" the entit" for the "ear ended ecember #1, $01 in relation to the initial franchise fee+ A% $% C% D%
!!,0$ ,01 $$,005 &').
%. If the collection of the note receivable is reasonabl" assured, what is the net income to be reported b" the entit" for the "ear ended ecember #1, $01+ A% $% C% D%
0&(' 5,%0 -0,0$ 5$,0#-
Page 1Numbers *-& *. and * Constru,tion ,ontra,t : Per,enta8e o/ Com"letion 9et!od#
n /anuar" 1, $01, 7olid Compan" accepted a longterm construction pro'ect for an initial contract price of P1,000,000 to be completed on /une #0, $0$0. n /anuar" 1, $015, the contract price was increased to P1,%00,000 b" reason of change in the design of the pro'ect. &he outcome of the construction contract can be estimated reliabl". &he pro'ect was completed on ecember #1, $0$0 which resulted to penalt" amounting to P$00,000. &he entit" provided the following data concerning the direct costs related to the said pro'ect for $01 and $015
Costs during the "ear 4emaining estimated costs to complete at "earend
!. )hat is the construction revenue for the "ear ended ecember #1, $01+ A% $% C% D%
#0,000 *''&''' 0,000 #!0,000
-. )hat is the reali*ed gross profit for the "ear ended ecember #1, $015+ A% $% C% D%
$00,000 0,000 1'&''' 100,000
. )hat is the balance of construction in progress on ecember #1, $015+ A% $% C% D%
1&2''&''' 1,0$0,000 1,1$0,000 500,000
2'1
2'10
0,000 !!0,000
!0,000 $0,000
Page 1 Numbers *0& (' and (1 Constru,tion ,ontra,t : Cost Re,o4er 9et!od#
n /anuar" 1, $01, =ardroc> Compan" started the construction of a building at a fi:ed contract price of P1,000,000. n the same date, the customer paid a mobili*ation fee equal to %( of contract price that will be deductible from the first billing. &he outcome of construction contract cannot be estimated reliabl"
uring $01, the entit" billed the customer equivalent to #0( of the contract price. uring $015, the entit" billed again the customer amounting to $0( of the contract price. uring $0$0, the entit" billed again the customer amounting to 0( of the contract price. &he remaining billing was made at the "ear of completion of the pro'ect.
&he entit" made collection from the customer at the end of $01, $015 and $0$0, in the amount of P1$0,000, P%0,000 and P10,000, respectivel". &he entit" provided the following data concerning the direct costs related to the said pro'ect
Cumulative costs incurred at "earend 4emaining estimated costs to complete at "earend
2'1
2'10
2'2'
#!0,000 0,000
00,000 $%0,000
-0,000 %0,000
5. )hat is the reali*ed gross profit for the "ear ended ecember #1, $015+ A% %0,000 $% $00,000 C% 1('&''' 0 D%
%0. )hat is the e:cess of construction in progress over progress billings or e:cess of progress billings over construction in progress on ecember #1, $0$0+ A% $% C% D%
)'&''' e;,ess billin8s 0,000 e:cess billings $0,000 e:cess construction in progress %0,000 e:cess construction in progress
%1. )hat is the balance of accounts receivable on ecember #1, $0$0+ A% $% C% D%
1%0,000 1''&''' 1$0,000 %0,000
Page 15 Numbers (2& () and (*
7iargao Compan" set up a branch in a province. &he entit" and its branch provided the following data for the second "ear of branch operation
7ales revenue to outside customer Beginning inventor" Purchases from outside supplier 7hipment to branch 7hipment from home office @nding inventor" perating e:penses
$ran,!
1,000,000 %0,000 00,000 $00,000
%00,000 #0,000 100,000
0,000 1%0,000
$%0,000 %0,000 0,000
&he home office to branch mar>up based on cost is $%( this "ear and last "ear.
$0( of the beginning inventor" of the branch came from outside supplier.
$( of the ending inventor" of the branch came from the last "ear6s shipment from the home office while %0( of the ending inventor" of the branch came from current "ear 6s shipment from the home office.
%$. )hat is the net income reported b" the branch in its separate income statement for the current "ear+ A% $% C% D%
1)'&''' 1$,000 11,000 5%,000
%#. )hat is the ending inventor" to be reported b" the entit" in its combined statement of financial position+ A% $% C% D%
1$,000 11%,000 1#0,000 122&-''
%. )hat is the overstatement in the cost of goods sold reported b" the branch in its separate income statement for the current "ear+ A% $% C% D%
%,000 %0,000 %$,000 *.&*''
Page $0 Number ((
&he home office in 2ue*on Cit" ships and bills merchandise to its provincial branch at cost. &he branch carries its own accounts receivable and ma>es its own collections. &he branch also pa"s its e:penses. &he branch transactions for $01 are reflected in the following information Cash Accounts receivable =ome ffice 7hipments from =ome ffice 7ales @:penses ecember #1, $01 inventor"
$0,000 0,000 10,000 $%0,000 $$%,%00 %%,%00 !%,000
)hat is the balance of the Investment in Branch account in the home office boo>+ A. B. C% .
10,000 15%,000 1-(&''' 1-%,000
Numbers (- and (.
Coffee Compan" decided to open a branch in ?anila. 7hipments of merchandise to the branch totaled P%,000 which included a $0( mar>up on cost. All accounting records are >ept at the home office. &he branch submitted the following report summari*ing the operations for the "ear ended ecember #1, $01 7ales on account 7ales on cash basis Collections of accounts receivable @:penses paid @:penses unpaid Purchase of merchandise for cash Inventor" on hand, ecember #1G 0( from home office 4emittance to home office
%!. )hat is the branch inventor" on ecember #1, $01 at cost+ A. B. C% .
$%,000 $0,000 2-&''' 10,000
%-. )hat is the branch net income for the current "ear+ A% 1&''' B. ,000 C. 00 . %00
-,000 $$,000 !0,000 #,000 1$,000 $!,000 #0,000 %%,000
Page $1 Numbers (& (0& -' and -1 $usiness Combination : A,5uisition o/ Net Assets#
@ntit" A acquired the net assets of @ntit" B b" issuing 10,000 ordinar" shares with par value of P10 and bonds pa"able with face amount of P%00,000. &he bonds are classified as financial liabilit" at amorti*ed cost. At the time of acquisition, the ordinar" shares are publicl" quoted at P$0 per share. n the other hand, the bonds pa"able are trading at 110. @ntit" A paid P10,000 share issuance costs and P$0,000 bond issue costs. @ntit" A also paid P0,000 acquisition related costs and P#0,000 indirect costs of business combination. Before the date of acquisition, @ntit" A and @ntit" B reported the following data
Current assets 3oncurrent assets Current liabilities 3oncurrent liabilities rdinar" shares 7hare premium 4etained earnings
Entit A
Entit $
1,000,000 $,000,000 $00,000 #00,000 %00,000 1,$00,000 00,000
%00,000 1,000,000 00,000 %00,000 $00,000 #00,000 100,000
At the time of acquisition, the current assets of @ntit" A have fair value of P1,$00,000 while the noncurrent assets of @ntit" B have fair value of P1,#00,000. n the same date, the current liabilities of @ntit" B have fair value of P!00,000 while the noncurrent liabilities of @ntit" A have fair value of P%00,000. %. )hat is the goodwill or gain on bargain purchase arising from business combination+ A% ('&''' 8ood3ill $% 1%0,000 gain on bargain purchase C% 1$0,000 goodwill D% -0,000 gain on bargain purchase
%5. )hat total amount should be e:pensed as incurred at the time of business combination+ A% $0,000 $% .'&''' C% #0,000 D% %0,000
!0. )hat is @ntit" A6s amount of total assets after the business combination+ A% $% C% D%
,%$0,000 ,10,000 *&.('&''' ,0,000
!1. )hat is @ntit" A6s amount of total liabilities after the business combination+ A. B. C. D%
$,$0,000 $,%10,000 $,#$0,000 2&1)'&'''
Page $$ Numbers -2 and -) $usiness Combination + A,5uisition o/ ma=orit s!ares#
@ntit" A acquired 0,000 out of 100,000 outstanding ordinar" shares of @ntit" B which enabled the former to obtain control of the latter at an acquisition price of P1,000,000. @ntit" A paid P100,000 acquisition related costs and P%0,000 indirect costs of business combination. At the date of acquisition, the net assets of @ntit" B are reported at P1,!00,000. An asset of @ntit" B is overvalued b" P!0,000 while one liabilit" is undervalued b" P0,000.
!$. )hat is the initial measurement of noncontrolling interest in net assets in the consolidated statement of financial position+ A% $% C% D%
#$0,000 )''&''' $%0,000 #1!,000
!#. )hat is the goodwill or gain on bargain purchase arising from business combination+ A% $% C% D%
$%0,000 gain on bargain purchase 1%0,000 gain on bargain purchase %0,000 goodwill 2''&''' 8ain on bar8ain "ur,!ase
Numbers -* and -( 6te" A,5uisition#
n /anuar" 1, $01, @ntit" A acquired #0,000 out of 100,000 outstanding ordinar" shares of @ntit" B for P50,000 or #0( interest. 8or the si: months ended /une #0, $01, @ntit" B reported net income of P0,000. n /ul" 1, $01, @ntit" A acquired additional !0,000 ordinar" shares of @ntit" B or !0( interest at a price of P per share or total cost of P$0,000. @ntit" A paid P$0,000 acquisition related costs and P10,000 indirect costs of business combination. &he acquisition price per share of the additional shares clearl" reflected the fair value of the e:isting interest of @ntit" A in @ntit" B. It is the polic" of @ntit" A to initiall" measure the noncontrolling interest in net assets of the acquiree at fair value. &he fair value of the noncontrolling interest in net assets of the acquiree is reliabl" measured at P%0,000. At the acquisition date, the net assets of @ntit" B were reported at P00,000. An asset of @ntit" B was overvalued b" P%0,000 while one liabilit" wass overvalued b" P#0,000.
!. )hat is the gain on remeasurement of the e:isting Investment in @ntit" B as a result of step acquisition+ A% $% C% D%
1&''' #0,000 $,000 1$,000
!%. )hat is the goodwill or gain on bargain purchase as a result of the business combination+ A% $% C% D%
1,000 goodwill $0,000 gain on bargain purchase $,000 goodwill )'&''' 8ood3ill
Page $# Numbers --& -. and - Consolidated Finan,ial 6tatements#
n /anuar" 1, $01, @ntit" A acquired -0( of outstanding ordinar" shares of @ntit" B at a price of P$10,000. n the same date, the net assets of @ntit" B were reported at P$!0,000. n /anuar" 1, $01 @ntit" A reported retained earnings of P$,000,000 while @ntit" B reported retained earnings of P$00,000.
All the assets and liabilities of @ntit" B are fairl" valued e:cept machiner" which is undervalued b" P0,000 and inventor" which is overvalued b" P10,000. &he said machiner" has remaining useful life of four "ears while 0( of the said inventor" remained unsold at the end of $01.
8or the "ear ended ecember #1, $01, @ntit" A reported net income of P1,000,000 and declared dividends of P$00,000 in the separate financial statements while @ntit" B reported net income of P1%0,000 and declared dividends of P$0,000 in the separate financial statements.
@ntit" A accounted the investment in @ntit" B using cost method in the separate financial statements.
!!. )hat is the noncontrolling interest in net assets on ecember #1, $01+ A% $% C% D%
1$,00 1#0,$00 1$!,000 1))&''
!-. )hat is the consolidated net income attributable to parent shareholders for the "ear ended ecember #1, $01+ A% $% C% D%
1&1'2&2'' 1,1!$,$00 1,11,$00 1,05%,$00
!. )hat is the amount of consolidated retained earnings on ecember #1, $01+ A% $% C% D%
#,01$,$00 $,551,$00 2&0(2&2'' $,5%,$00
Page $ Numbers -0& .'& .1 and .2 Consolidated Finan,ial 6tatements : Inter,om"an sales#
n /anuar" 1, $015, @ntit" A acquired !0( of outstanding ordinar" shares of @ntit" B at a gain on bargain purchase of P0,000. 8or the "ear ended ecember #1, $0$0, @ntit" A and @ntit" B reported sales revenue of P$,000,000 and P1,000,000 in their respective separate income statements. At the same "ear, @ntit" A and @ntit" B reported cost of goods sold of P1,$00,000 and P-00,000 in their respective separate income statements.
uring $015, @ntit" A sold inventor" to @ntit" B at a selling price of P$0,000 with gross profit rate of 0( based on cost. n the other hand, @ntit" B sold inventor" to @ntit" A at a selling price of P00,000 with gross profit rate of #0( based on sales during $0$0.
n ecember #1, $015, $%( of the goods coming from @ntit" A remained in @ntit" B6s inventor" but all were eventuall" sold to third persons during $0$0. As of ecember #1, $0$0, 0( of the goods coming from @ntit" B were eventuall" sold to third persons.
8or the "ear ended ecember #1, $0$0, @ntit" A reported net income of P%00,000 while @ntit" B reported net income of P$00,000 and distributed dividends of P%0,000. @ntit" A accounted for its inventor" in @ntit" B using cost method in its separate financial statements.
!5.
)hat is the consolidated sales revenue for the "ear ended ecember #1, $0$0+ A% $% C% D%
2&-''&''' $,#$0,000 #,000,000 $,-$0,000
-0. )hat is the consolidated gross profit for the "ear ended ecember #1, $0$0+ A% $% C% D%
1,1$0,000 1&'*&''' 1,0$,000 1,1%$,000
-1. )hat is the noncontrolling interest in net income for the "ear ended ecember #1, $0$0+ A% 100,00 $% %5,$00 C% (1&2'' D% ,000
-$.
)hat is the consolidated net income attributable to parent6s shareholders for the "ear ended ecember #1, $0$0+ A% $% C% D%
-!!,00 %5!,00 !0!,00 -2-&''
Page
%$Numbers .)& .*& .( and .- Consolidated 6tatements:Inter,om"an 8ain or loss on dis"osal#
n /anuar" 1, $015, @ntit" A acquired 0( of outstanding ordinar" shares of @ntit" B at a gain on bargain purchase of P10,000. &he following intercompan" transactions occurred for between the two entities
n /anuar" 1, $015, @ntit" B sold a land to @ntit" A with a cost of P1,000,000 at a selling price of P1,100,000. &he land was eventuall" sold b" @ntit" A to third persons during $0$0. n /anuar" 1, $015, @ntit" A sold a white machiner" to @ntit" B with a cost of P$00,000 and accumulated depreciation of P0,000 at a selling price of P10,000. &he machiner" is alread" "ears old at the date of sale. &he residual value of white machiner" is immaterial. n /ul" 1, $0$0, @ntit" B sold a blac> machiner" to @ntit" A at with a cost of P$-0,000 and accumulated depreciation of P10,000 at a selling price of P!0,000. &he machiner" is alread" ! "ears old at the date of sale. &he residual value of blac> machiner" is immaterial.
8or the "ear ended ecember #1, $0$0, @ntit" A reported net income of P00,000 while @ntit" B reported net income of P%00,000 and distributed dividends of P1%0,000. @ntit" A accounted for its inventor" in @ntit" B using cost method in its separate financial statements.
-#.
)hat is the consolidated depreciation e:pense of machiner" for $0$0+ A% $% C% D%
*'&''' %%,000 !1,!!$,###
-. )hat is the consolidated carr"ing amount of machiner" on ecember #1, $0$0+ A% $% C% D%
$$%,000 21(&''' $00,000 $10,000
-%. )hat is the noncontrolling interest in net income for $0$0+ A% $% C% D%
-!.
1$,000 10%,000 12(&''' 10,000
)hat is the consolidated net income attributable to parent shareholders for $0$0+ A% $% C% D%
1,%#,-%0 1,%1,-%0 1,#5,-%0 1&*1&.('
Page $! 6e"arate Finan,ial 6tatements : Cost 9et!od and Fair Value 9odel or E5uit 9et!od Numbers ..& .& .0 and '
n /anuar" 1, $0$0, @ntit" A acquired 50( of outstanding ordinar" shares of @ntit" B at a price of P500,000. @ntit" A paid P$0,000 costs related to acquisition of shares. At the acquisition date, the net assets of @ntit" B were reported at P5%0,000. All the assets of @ntit" B are properl" valued e:cept for a machiner" which is undervalued b" P1%0,000. &he machiner" has a remaining useful life of % "ears. 8or the "ear ended ecember #1, $0$0, @ntit" B reported net income of P$00,000 and declared dividends in the amount of P#0,000. &he fair value of Investment in @ntit" B on ecember #1, $0$0 is P1,000,000 while the cost of disposal is %(. @ntit" A voluntaril" prepared its separate financial statements.
--.
If @ntit" A elects cost method to account its Investment in @ntit" B in its separate financial statements, what is the carr"ing amount of the Investment in @ntit" B on ecember #1, $0$0+ A% 500,000 $% 02'&''' C% 1,000,000 D% 5%0,000
-.
)hat is the investment income for $0$0 if @ntit" A elects cost method to account its Investment in @ntit" B in its separate financial statements+ A% -,000 $% 2.&''' C% 10,000 D% 10-,000
-5.
If @ntit" A elects fair value model to account its Investment in @ntit" B in its separate financial statements, what is the carr"ing amount of the Investment in @ntit" B on ecember #1, $0$0+ A% $% C% D%
0.
500,000 5$0,000 1&'''&''' 5%0,000
)hat is the net effect in profit or loss for $0$0 if @ntit" A elects fair value model to account its Investment in @ntit" B in its separate financial statements+ A% $% C% D%
-,000 $-,000 10,000 1'.&'''
Page $-
Numbers 1& 2 and ) Non"ro/it Or8ani>ation + 6tatement o/ Finan,ial Position#
In the first "ear of operations of a nonprofit organi*ation, the following transactions occurred
&he nonprofit organi*ation received P1,000,000 fund from a donor who stipulated that it shall be invested indefinitel" and the dividend from such investment shall be used for research pro'ect of the organi*ation. ividend amounting to P1%0,000 was received during the "ear but onl" P%0,000 was spent for the research pro'ect.
&he nonprofit organi*ation received P#00,000 fund from a donor who stipulated that it shall be used for the acquisition of service car. &he nonprofit organi*ation used P100,000 of the fund for the acquisition of a service car with useful life of % "ears. &he car was acquired at the middle of the "ear.
&he nonprofit organi*ation received P%00,000 fund who stipulated that it shall be used based on the discretion of the Board of &rustees of the nonprofit organi*ation. &he nonprofit organi*ation used P100,000 for the acquisition of souvenir items which were sold b" the nonprofit organi*ation for P1%0,000. &he remaining P00,000 was designated b" the Board of &rustees for future fundraising pro'ects.
1. )hat is the amount of permanentl" restricted net assets at the end of the first "ear+ A% $% C% D%
1,100,000 1,#00,000 1,$00,000 1&'''&'''
$. )hat is the amount of temporaril" restricted net assets at the end of the "ear+ A% $% C% D%
100,000 )''&''' $00,000 -00,000
#. )hat is the amount of unrestricted net assets at the end of the "ear+ A% $% C% D%
-*'&''' %0,000 %50,000 !#0,000
Page $
Non"ro/it Or8ani>ation + 6tatement o/ A,ti4ities and 6tatement o/ Cas! Flo3s
Numbers *& (& - and .
n /anuar" 1, $0$0, a nonprofit organi*ation received P1,000,000 cash donation from a donor who stipulated that the amount should be invested indefinitel" in revenue producing investment. &he deed of donation also provided that the dividend income shall be used for the acquisition of computers of the nonprofit organi*ation. n ecember #1, $0$0, the nonprofit organi*ation received P100,000 cash as dividend income from the investment of the fund. n /anuar" 1, $0$1, the nonprofit organi*ation acquired a computer at a cost of P$0,000 with a useful life of % "ears without residual value.
.
In the statement of activities of the 3P for the "ear ended ecember #1, $0$0, which of the following is the proper effect of the transactions+ A% $% C% D%
%.
In the statement of activities of the 3P for the "ear ended ecember #1, $0$1, which of the following is the proper effect of the transactions+ A% $% C% D%
!.
Increase in temporaril" restricted net assets b" P100,000. Increase in unrestricted net assets b" P1,000,000. In,rease in unrestri,ted net assets b P1-&'''% ecrease in temporaril" restricted net assets b" P100,000.
=ow should the cash flows be reported in 3P6s 7tatement of Cash 8lows for the "ear ended ecember #1, $0$0+ A% $% C% D%
-.
In,rease in tem"oraril restri,ted net assets b P1''&'''% Increase in unrestricted net assets b" P1,000,000. Increase in unrestricted net assets b" P1!,000. ecrease in temporaril" restricted net assets b" P$0,000.
Cash receipts from operating activities b" P100,000. Cas! re,ei"ts /rom /inan,in8 a,ti4ities b P1&1''&'''% Cash disbursements for investing activities b" P%0,000. Cash disbursements for financing activities b" P1,000,000
=ow should the cash flows be reported in 3P6s 7tatement of Cash 8lows for the "ear ended ecember #1, $0$1+ A% $% C% D%
Cash receipts from operating activities b" P100,000. Cash receipts from financing activities b" P1,100,000. Cas! disbursements /or in4estin8 a,ti4ities b P2'&'''% Cash disbursements for investing activities b" P100,000.
Page $5 Number Go4ernment A,,ountin8 9anual
n ecember #1, $01, the epartment of 8inance billed its lessee on one of its buildings in the amount of P10,000. n /anuar" #1, $015, the epartment of 8inance collected all of the accounts receivable. n 8ebruar" $, $015, the epartment of 8inance remitted the entire collected amount to the Bureau of &reasur". )hat is the 'ournal entr" to record the remittance b" the epartment of 8inance to the Bureau of &reasur"+ A. ebit Accounts 4eceivable P10,000 and Credit 4ent Income P10,000 B. ebit Accounts 4eceivable P10,000 and Credit 4etained @arnings P10,000 C. ebit Cash Collecting fficers P10,000 and Credit Accounts 4eceivable P10,000 D% Debit + Cas! + Treasur?A8en, De"osit& Re8ular + P1'&''' and Credit Cas! + Colle,tin8 O//i,er + P1'&''' Numbers 0 and 0'
n /anuar" 1, $01, the epartment of Public )or>s and =ighwa"s ;P)=< received a P10,000,000 appropriation from the national government for the acquisition of machiner". n 8ebruar" 1, $01, P)= received the allotment from the epartment of Budget and ?anagement. n ?arch 1, $01, P)= entered into a contract with CA& Inc. for the acquisition of the machiner" with a price of P,000,000. n April 1, $01, P)= received the 3otice of Cash Allocation from epartment of Budget and ?anagement net of 1( withholding ta: for income ta: of supplier and %( withholding of 8inal &a: on EA& of supplier. n ?a" 1, $01, CA& Inc. delivered the machiner" to P)=. n /une 1, $01, P)= paid the obligation to CA& Inc. n /ul" 1, $01, P)= remitted the withheld income ta: and final EA& to BI4. 5. )hat is the 'ournal entr" on ?arch 1, $01+ A. 3o entr" but 'ust posting to appropriate 4APA9 B. 3o entr" but 'ust posting to appropriate 4APA9 and to 4A C% No entr but =ust "ostin8 o/ OR6 Obli8ation Re5uest and 6tatus# to a""ro"riate RAOD . ebit ?achiner" P,000,000 and credit Accounts Pa"able P,000,000 50. )hat is the 'ournal entr" on April 1, $01+ A% Debit Cas!:9D6& Re8ular P.&(2'&''' and Credit 6ubsid In,ome /rom National Go4ernment P.&(2'&'''% $% ebit ?achiner" P,000,000 and Credit Accounts Pa"able P,000,000 C% ebit Accounts Pa"able P,000,000 and Credit ue to BI4 P0,000 and Cash?7, 4egular P-,%$0,000. D% ebit ue to BI4 P0,000 and Credit 7ubsid" Income from 3ational overnment P0,000. Number 01
epartment of =ealth ;=< received 3otice of Cash Allocation in the amount of P100,000 from epartment of Budget and ?anagement. = made a total cash disbursements in the amount of P5%,000. )hat is the 'ournal entr" to recogni*e reversion of unused 3otice of Cash Allocation b" = in its boo>s+ A% Debit 6ubsid In,ome /rom National Go4ernment P(&''' and ,redit Cas!:9D6& Re8ular P(&'''% B. ebit 4etained @arnings of 8A P%,000 and credit Cash?7, 4egular P%,000. C. ebit @:penses of 8A P%,000 and credit Cash?7, 4egular P%,000. . ebit Investment of 8A P%,000 and credit Cash?7, 4egular P%,000. Number 02
&he Bureau of &reasur" received P$0,000 cash remittance from epartment of Agrarian 4eform ;A4< from its miscellaneous income. )hat is the 'ournal entr" of the Bureau of &reasur" in its accounting boo>s to record the receipt of cash remittance from the income of a national government agenc"+ A% Debit Cas! in $an@& Lo,al $an@ P2'&''' and Credit Cas!:Treasur?A8en, De"osit& Re8ular P2'&'''% B. ebit Cash in Ban>, 9ocal Ban> P$0,000 and Credit ?iscellaneous Income of A P$0,000. C. ebit Cash in Ban>, 9ocal Ban> P$0,000 and Credit 7avings of A, 4egular P$0,000.
. ebit Cash in Ban>, 9ocal Ban> P$0,000 and Credit CashCollecting fficer, A P$0,000. Page #0 Number 0) Forei8n ,urren, transa,tion#
n 7eptember 1, $01, Bain Compan" received an order for equipment from a foreign customer for #00,000 local currenc" units ;9CD< when the D7 dollar equivalent was H5!,000. Bain shipped the equipment on ctober 1%, $01, and billed the customer for #00,000 9CD when the D7 dollar equivalent was H100,000. Bain received the customer remittance in full on 3ovember 1!, $01, and sold the #00,000 9CD for H10%,000. In the income statement for the "ear ended ecember #1, $01, what amount should Bain report as part of net income a foreign e:change transaction gain+ A. B. C% .
H 0 H,000 (&''' H5,000
Number 0* Forei8n ,urren, transa,tion#
n 7eptember 1, $01, Cano Compan", a D7 corporation, sold merchandise to a foreign firm for $%0,000Botswana pula. &erms of the sale require pa"ment in pula on 8ebruar" 1, $015.. n 7eptember 1, $01, the spot e:change rate was H.$0 per pula. At ecember #1, $01, Cano6s "earend, the spot rate was H.15, but the rate increased to H.$$ b" 8ebruar" 1, $015, when pa"ment was received. =ow much should Cano report as foreign e:change transaction gain or loss as part of $015 income+ A. B. C. D%
H 0 H$,%00 loss H%,000 gain .&('' 8ain
Number 0( Forei8n ,urren, transa,tion#
=unt Compan" purchased merchandise for #00,000 from a vendor in 9ondon on 3ovember #0, $01. Pa"ment in British pounds was due on /anuar" #0, $015. &he e:change rates to purchase one pound were as follows
7potrate #0da" rate !0da" rate
No4ember )'& 2'1
De,ember )1& 2'1
H1.!% 1.! 1.!#
H1.!$ 1.%5 1.%!
In the income statement, what amount should =unt report as foreign e:change transaction gain as part of net income+ A. $% C. .
H1$,000 0&''' H !,000 H 0
Page #1
Number 0- Forei8n ,urren, transa,tion#
Ball Compan" had the following foreign currenc" transactions during $01
?erchandise was purchased from a foreign supplier on /anuar" $0, $01, for the D7 dollar equivalent of H50,000. &he invoice was paid on ?arch$0, $01, at the D7 dollar equivalent of H5!,000. n /ul" 1, $01, Ball borrowed the D7 dollar equivalent of H%00,000 evidenced b" a note pa"able in the lender6s local currenc" on /ul" 1, $0$0. n ecember #1, $01, the D7 dollar equivalents of the principal amount and accrued interest were H%$0,000 and H$!,000, respectivel". Interest on the note is 10( per annum.
In Ball6s $01 income statement, what amount should be included as foreign e:change transaction loss as part of net income+ A. B. C. D%
H 0 H !,000 H$1,000 2.&'''
Number 0. Forei8n ,urren, transa,tion#
n 3ovember #0, $01, &"rola Publishing Compan", located in Colorado, e:ecuted a contract with @rnest Bl"ton, an author from Canada, providing for pa"ment of 10( ro"alties on Canadian sales of Bl"ton6s boo>. Pa"ment is to be made in Canadian dollars each /anuar" 10 for the previous "ear6s sales. Canadian sales of the boo> for the "ear ended ecember #1, $015, totaled H%0,000 Canadian. &"rola paid Bl"ton his $015 ro"alties on /anuar" 10, $0$0. &"rola6s $015 financial statements were issued on 8ebruar" 1, $0$0. 7pot rates for Canadian dollars were as follows 3ovember #0, $01 /anuar" 1, $015 ecember #1, $015 /anuar" 10, $0$0
H.H. H.5 H.50
=ow much should &"rola accrue for ro"alties pa"able at ecember #1, $015+ A. B. C% .
H,#%0 H.$% *&*(' H,%00
Page #$ Numbers 0& 00& 1'' and 1'1 Forei8n Curren, Transa,tion#
n 3ovember 1, $0$0, an entit" acquired on account goods from a foreign supplier at a cost of H1,000. &he accounts pa"able are paid on /anuar" #0, $0$1. n ecember 1, $0$0, an entit" sold on account the said goods to a foreign customer at a selling price of H1,%00. &he accounts receivable are collected on 8ebruar" $, $0$1. &he entit" is operating in Philippine econom" wherein the functional currenc" is the Philippine Peso. &he following direct e:change rates are provided $uin8 s"ot rate
6ellin8 s"ot rate
P0 #5 %
P$ 0 -
3ovember 1, $0$0 ecember 1, $0$0 ecember #1, $0$0
5.
)hat is the sales revenue for $0$0+ A% B. C. .
55.
(&('' !0,000 !-,%00 -$,000
)hat is the carr"ing amount of accounts receivable on ecember #1, $0$0+ A. B. C% .
%,%00 !0,000 -.&('' -$,000
100. )hat is the carr"ing amount of accounts pa"able on ecember #1, $0$0+ A. B. C. D%
0,000 $,000 %,000 *.&'''
101. )hat is the net foreign currenc" gain for $0$0+ A% B. C. .
*&''' %,000 #,000 !,000
Page ## Translation o/ Finan,ial 6tatements in Fun,tional Curren, to Presentation Curren, Numbers 1'2& 1')& 1'* and 1'(
@ntit" A owns ma'orit" of the outstanding ordinar" shares of @ntit" B which is operating in Dnited 7tates of America wherein the functional currenc" is the D7A H. =owever, the presentation currenc" of @ntit" B is the Philippine Peso because that is the presentation currenc" of @ntit" A. 8or the "ear ended ecember #1, $0$0, @ntit" B presented its 7tatement of 8inancial Position in its functional currenc" of D7A H
Current assets 3oncurrent assets
H10,000 0,000
&otal Assets
('&'''
Current liabilities 3oncurrent liabilities rdinar" share capital Preference share capital 4etained earnings &otal 9iabilities and shareholders
H10,000 $0,000 %,000 ,000 -,000 ('&'''
&he ordinar" shares are issued on /anuar" 1, $015 while the preference shares are issued on /ul" 1, $015. B reported H1,000 net income during $0$0 and declared dividends in the amount of H$00 on ecember 1, $0$0. &he translated amount of retained earnings on ecember #1, $015 is P#00,000.
&he following direct e:change rates are provided /anuar" 1, $015 /ul" 1, $015 ecember #1, $015 ecember 1, $0$0 ecember #1, $0$0 Average rate $0$0
P0 $ # 1 %
10$. )hat is the amount of net assets in D7 dollars on ecember #1, $015+ A% B. C. .
10&2'' $0,000 15,000 $0,$00
10#. )hat amount of translation gain as component of other comprehensive income should be presented in the of statement of comprehensive income for the "ear ended ecember #1, $0$0+ A% B. C. .
)&-'' #5,$00 0,00 1,00
10. )hat is the translated retained earnings balance on ecember #1, $0$0+ A. $% C. .
#00,000 ))(&'' #,000 $1,00
10%. )hat is the cumulative translation credit that should to be presented in the statement of financial position on ecember #1, $0$0+ A. $%,00 $% 2&2'' C. $!,00
. $,!00 Page #
Numbers 1'- and 1'. 6tandard Costin8 + Dire,t material 4arian,e#
3egros Compan" recentl" setup its standard costs for its direct materials. &he entit" sets the benchmar> at # units of direct materials per product at a standard price of P% per unit of direct material.
uring the "ear, the entit" acquired 00 units of direct materials at a total cost of P$,00 or P! per unit. &he entit" also manufactured 100 products using $%0 units of direct materials.
10!. )hat is the direct material price variance+ A. B. C. D%
$%0 unfavorable #00 favorable #%0 favorable *'' un/a4orable
10-. )hat is the direct material usage variance+ A. B. C% .
1%0 unfavorable #00 unfavorable 2(' /a4orable #%0 favorable
Numbers 1' and 1'0 6tandard ,ostin8 : Dire,t labor 4arian,e#
Bacolod Compan" recentl" setup its standard costs for its direct labor. &he entit" sets the benchmar> at $ direct labor hours per product at a standard rate of P100 per direct labor hour.
uring the "ear, the entit" manufactured 10 products using #0 direct labor hours at total direct labor costs of P$,00 or P0 per direct labor hour.
10. )hat is the direct labor rate variance+ A% B. C. .
-'' /a4orable 00 unfavorable $00 favorable 00 unfavorable
105. )hat is the direct labor efficienc" variance+ A. 00 favorable $% 1&''' un/a4orable C. !00 unfavorable . $00 favorable
Page #% Number 11' 7ob Order Costin8#
7imple Compan" emplo"s actual costing for its production. &he entit" provided the following data concerning its production during the "ear ecrease in direct materials during the "ear 9abor cost during the "ear Actual factor" overhead during the "ear Increase in wor> in process during the "ear ecrease in finished goods during the "ear
%00,000 00,000 #00,000 $00,000 100,000
)hat is the cost of goods manufactured during the "ear+ A. $% C. .
1,$00,000 1&'''&''' 1,00,000 1,100,000
Numbers 111& 112 and 11) 7ob order ,ostin8#
?arawi Compan" emplo"s normal costing for its production. &he following data are provided during the current "ear 3et purchases of raw materials during the "ear &otal labor costs during the "ear epreciation of factor" assets during the "ear Dtilities on the factor" during the "ear 4aw materials inventor" )or> in process inventor" 8inished goods inventor"
%00,000 00,000 100,000 #00,000 $e8innin8
Endin8
$00,000 %00,000 !00,000
#00,000 $00,000 #00,000
&he entit" uses a single account for its direct material and indirect materials. Indirect material used is onefourth of the total direct material used. &he indirect labor cost is 1J of the total labor costs. &he overhead application rate is 0( of direct labor costs. An" over or under application of overhead is considered material.
111. )hat is the total manufacturing cost during the current "ear+ A% B. C. .
1&(-'&''' 1,%00,000 1,!0,000 1,-0,000
11$.)hat is the cost of goods manufactured during the current "ear+ A% $% C% D%
$,00,000 1&-'&''' 1,50,000 1,00,000
11#. )hat is the over or under application of overhead+ A% !0,000 over application $% 10,000 under application C% *'&''' under a""li,ation D% 1!0,000 over application
Page #! Numbers 11*& 11( and 11- 7oint Produ,t and $:Produ,t Costin8#
7ila" Compan" is conducting a 'oint production at a total costs of P%00,000. &he 'oint production results to the following inventories
Dnits produced 7elling price at split off
Alt
Tab
Del
$0,000 units P1%0
10,000 units P$00
%,000 units P%
Alt and &ab are considered main products while el is considered b"product. &he entit" considers its b"product as material. &he b"product requires additional processing cost per unit of P0.0 and its cost of disposal is P0.$0 per unit.
11. )hat is the value to be given to product el+ A% $% C% D%
$%,000 $1,000 $,000 2'&'''
11%. )hat is the 'oint cost allocated to product Alt if the entit" emplo"s ph"sical method+ A% $% C% D%
###,### #1!,!!#1-,### )2'&'''
11!. )hat is the 'oint cost allocated to product &ab if the entit" emplo"s relative sales value method+ A% $% C% D%
#00,000 $00,000 102&''' $,000
Page #Number 11. 7ust:in:Time In4entor and $a,@/lus! Costin8#
&alisa" Compan" is emplo"ing bac>flush costing in connection with 'ustintime production process. &he entit" provided the following production data for the "ear
&he entit" acquired direct materials during the "ear at a cost of P100,000 &he entit" reported direct labor cost of P$00,000. &he actual factor" overhead incurred during the "ear amounted to P1-0,000. &he standard factor" overhead application rate is -%( of direct labor cost. &he ending finished goods inventor" is reported at P1$0,000.
)hat is the cost of goods sold under bac>flush costing+ A. B. C% .
-0,000 #%0,000 ))'&''' #00,000
Numbers 11& 110 and 12' $a,@/lus! ,ostin8#
Pana" Compan" has a c"cle of # da"s, uses a 4aw and In Process Account ;4IP< and charges all conversion costs to cost of goods sold. At the end of each month, all inventories are counted, conversion costs components are estimated and inventor" account balances are ad'usted. 4aw material cost is bac>flushed from 4aw and in Process ;4IP< Account to finished goods. &he following information is provided for the month of /une Beginning Balance of 4IP account, including P1,000 conversion cost Beginning Balance of finished goods account including P!,000 conversion cost 4aw materials received on credit irect labor cost 8actor" overhead applied @nding 4IP inventor" per ph"sical count, including P-,000 conversion cost @nding finished goods inventor" per ph"sical count, including P,000 conversion cost
%,000 10,000 00,000 #00,000 %00,000 $0,000 !,000
11.)hat is the amount of conversion cost included cost of goods sold in /une+ A. $% C. .
0$,000 .0-&''' -5,000 00,000
115.)hat is the amount of direct materials bac>flushed from 4IP to finished goods+ A% B. C. .
)01&''' 0,000 #-,000 #5%,000
1$0. )hat is the amount of direct materials bac>flushed from finished goods to cost of goods sold+ A. B. C% .
#5%,000 00,000 )0)&''' #5,000
Page # Numbers 121 and 122 A,ti4it $ased Costin8#
4omblon Compan" is choosing between traditional costing and activit"based costing. &he following data are provided
A,ti4it:$ased Costin8 A,ti4it ,enter
Cost dri4er
Amount o/ a,ti4it
Center ,ost
?aterial handling Painting Assembl"
Kilos handled Dnits painted ?achine hours
100,000 >g. %0,000 units 10,000 hours
$00,000 #00,000 %00,000
9abor hours
100,000 hours
1,000,000
Traditional Costin8
&raditional
/ob 1 contains #,000 units. It weighs 10,000 >ilos and uses #00 machine hours. &he direct labor hours on the 'ob total -,000 hours.
1$1. )hat is the applied overhead under traditional costing+ A% B. C. .
.'&''' !0,000 0,000 %0,000
1$$. )hat is the applied overhead under Activit" Based Costing+ A% $% C% D%
()&''' %!,000 %,000 #,000
Page #5 Numbers 12)& 12*& 12( and 12- Pro,ess Costin8 3it!out 6"oila8e#
&acloban Compan" is emplo"ing process costing regarding its production c"cle. Conversion costs are added uniforml" during the production process while direct materials are added 10( at the start of production process, %0( at the middle of the production process and the remainder at the end of production process. &he production data of the entit" during the "ear are
Beginning )or> in Process Inventor" Dnits started during the "ear @nding )or> in Process Inventor"
10,000 units ;#0( incomplete as to conversion costs< #0,000 units %,000 units ;-%( incomplete as to conversion costs<
&here is no spoilage during the period. &he costs of beginning inventor" consist of P10#,000 costs of direct materials and P10-,%00 conversion costs. &he total manufacturing costs consist of P$%$,000 costs of direct materials and P1!,$%0 conversion costs.
1$#. )hat is the cost per unit of direct material under average process costing+ A% 1' $% 5 C% D% -
1$. )hat is the cost per unit of conversion cost under average process costing+ A% 10 $% 5 C% D% .
1$%. )hat is the cost per unit of direct material under 8I8 process costing+ A% 10 $% 5 C% D% -
1$!. )hat is the cost per unit of conversion cost under 8I8 process costing+ A% $% C% D%
( 5 -
Page 0 Numbers 12.& 12& 120& 1)' and 1)1 Pro,ess Costin8 3it! 6"oila8e#
7amar Compan" is emplo"ing process costing regarding its production c"cle. Conversion costs are added uniforml" during the production process while direct materials are added $0( at the start of production process, %( at the middle of the production process and the remainder at the end of production process. 3ormal spoilage is 10( of units started during the "ear. &he entit" is conducting inspection when the production process is at %( of conversion cost. &he entit" provided the following production data during the "ear Beginning )or> in Process Inventor" Dnits started during the "ear @nding )or> in Process Inventor" Dnits completed during the period
10,000 units ;0( incomplete as to conversion costs< 0,000 units %,000 units ;0( complete as to conversion costs< #,000 units
1$-. )hat is the abnormal spoilage in units during the "ear+ A% $% C% D%
-,000 units ,000 units )&''' units $,000 units
1$. )hat is the equivalent unit of production for direct material under average process costing+ A% $% C% D%
*2&-(' units 1,1%0 units #,$%0 units #,-%0 units
1$5. )hat is the equivalent unit of production for conversion cost under average process costing+ A% $% C% D%
,!%0 units *(&1(' units #,$%0 units !,1%0 units
1#0. )hat is the equivalent unit of production for direct material under 8I8 costing+ A% $% C% D%
#%,1%0 units #-,$%0 units )-&1(' units #,%0 units
1#1. )hat is the equivalent unit of production for conversion cost under 8I8 costing+ A% $% C% D%
)0&1(' units 1,$%0 units #-,%0 units #,!%0 units
Page 1
Numbers 1)2& and 1)) Forei8n ,urren, !ed8e#
n ecember 1, $0$0, @ntit" A imported goods at a price of H1,000 pa"able on ?arch 1, $0$1. In order to hedge this foreign currenc" denominated importation, @ntit" A entered into a forward contract with a ban> to purchase H1,000. @ntit" A is operating in Philippine econom" where the functional currenc" is Philippine peso. &he following direct e:change rates are given
Bu"ing spot 7elling spot
De,ember 1& 2'2'
De,ember )1& 2'2'
9ar,! 1& 2'21
P# %
P0
P1 5
1#$. )hat is the foreign currenc" gain or loss on the hedged item for $0$0+ A% $% C% D%
$,000 loss 1&''' 8ain #,000 gain ,000 gain
1##. )hat is the foreign currenc" gain or loss on the hedging instrument for $0$1+ A% $% C% D%
*&''' 8ain $,000 loss 1,000 loss #,000 gain
Page $ Numbers 1)* and 1)(
Kline Compan" purchased inventor" on 3ovember #0, $01 for H10,000 pa"able ?arch 1, $015. n ecember 1, $01, the entit" entered into a forward contract to purchase H10,000in 50 da"s to hedge the purchase of inventor" on 3ovember #0, $01. &he relevant e:change rates are
3ovember #0, $01 ecember 1, $01 ecember #1, $01
6"ot rate
For3ard rate
P% ! %0
P %1
1#. )hat amount of foreign currenc" transaction gain from the forward contract should be included in net income for $01+ A. %0,000 B. 0,000 C% )'&''' . 0 1#%. )hat amount of foreign currenc" transaction loss should be included in income from the revaluation of accounts pa"able for $01+ A. 0,000 $% ('&''' C. 10,000 . 0
Number 1)-
n ecember 1, $01 )inston Compan" entered into a forward contract to purchase H10,000 in 50 da"s to hedge a commitment to purchase equipment being manufactured to the entit"6s specifications. &he e:pected deliver" date is ?arch 1, $015, at which time settlement is due to the manufacturer. &he hedge qualifies as a fair value hedge. &he relevant e:change rates are
ecember 1, $01 ecember #1, $01
6"ot rate
For3ard rate
P %$
P5 %1
)hat amount of foreign currenc" transaction gain from the forward contract should be included in net income for $01+ A% 2'&''' B. 0,000 C. 10,000 . 0
Page # Numbers 1). and 1) Fair 4alue !ed8e#
n 3ovember 1, $0$0, @ntit" A entered into a firm commitment for the e:portation of goods at a price of H$,000. eliver" will happen on /anuar" #1, $0$0. In order to hedge this foreign currenc" denominated firm commitment, @ntit" A entered into a forward contract with a ban> to sell H$,000. @ntit" A is operating in Philippine econom" where the functional currenc" is Philippine peso. @ntit" A elects to use fair value hedge to account this hedge of firm commitment. &he following direct e:change rates are given
7pot rate 50da" forward rate !0da" forward rate #0da" forward rate
No4ember 1& 2'2'
De,ember )1& 2'2'
7anuar )1& 2'21
P# 1 % -
P0 # $ !
P 1 $
1#-. )hat is the carr"ing amount of firm commitment asset or liabilit" on ecember #1, $0$0+ A% ,000 liabilit" $% 1'&''' liabilit C% $,000 liabilit" D% !,000 liabilit"
1#. )hat is the foreign currenc" gain or loss on hedging instrument for $0$1+ A% $% C% D%
*&''' 8ain $,000 loss !,000 loss ,000 gain
Page Numbers 1)0& 1*'& 1*1 and 1*2 Cas! /lo3 !ed8e#
n 3ovember 1, $0$0, @ntit" A anticipated the purchase of equipment on /anuar" #1, $0$1 at a price of H1,$00. In order to hedge this highl" probable forecasted importation, @ntit" A entered into a forward contract with a ban> to purchase H1,$00. @ntit" A is operating in Philippine econom" where the functional currenc" is Philippine peso. &he following direct e:ch ange rates are made available
7pot rate 50da" forward rate !0da" forward rate #0da" forward rate
No4ember 1& 2'2'
De,ember )1& 2'2'
7anuar )1& 2'21
P% $ !
P 1 %
P# # 0 0
1#5. )hat is the unreali*ed holding gain or loss to be recogni*ed as component of other comprehensive income in the statement of comprehensive income for the "ear ended ecember #1, $0$0+ A% $% C% D%
2&*'' 8ain 1,$00 gain #,!00 loss ,00 gain
10. )hat is the unreali*ed holding gain or loss to be recogni*ed as component of other comprehensive income in the statement of comprehensive income for the "ear ended ecember #1, $0$1+ A% $% C% D%
,00 loss 1&2'' loss #,!00 gain $,00 gain
11. )hat is the cumulative unreali*ed gain or loss before reclassification to be reported as component of other comprehensive income in the 7tatement of Changes in equit" on ecember #1, $0$1+ A% 1&2'' 8ain $% 1,00 loss C% $,00 gain 0 D%
1$. )hat is the cost of equipment in Philippine peso on /anuar" #1, $0$1+ A% $% C% D%
,000 %0,00 5,$00 (1&-''
