CHAPTER 1 THE DEVELOPMENT OF THE ACCOUNTING PROFESSION
1-1. 1. 2. 3. 4. 5.
e a g b, d f
6. 7. 8. 9. 10.
f i a b, c h
g k r p t
6. 7. 8. 9. 10.
f, k d a e j
1-2. 1. 2. 3. 4. 5.
11. 12. 13. 14. 15.
o h u i p
MULTIPLE CHOICE QUESTIONS Theory MC1
C
MC11
B
MC21
C
MC31
A
MC2 MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10
D B B B C B C A C
MC12 MC13 MC14 MC15 MC16 MC17 MC18 MC19 MC20
C C C D C A C D D
MC22 MC23 MC24 MC25 MC26 MC27 MC28 MC29 MC30
C C B C C A D C D
MC32 MC33 MC34
C A A
MC1 MC2
C C
MC11 MC12
CHAPTER 2 CASH AND CASH EQUIVALENTS MULTIPLE CHOICE QUESTIONS Theory C MC21 B MC22
B A
MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10
D D D D A A D B
Problems MC29 MC30 MC31 MC32
C D C B
MC33 MC34 MC35 MC36 MC37 MC38
D B C B A D
MC39 MC40
B B
MC41 MC42 MC43 MC44 MC45 MC46
B B A C B B
MC47 MC48 MC49 MC50 MC51 MC52
D D C D B D
MC53 MC54 MC55 MC56
B A D C
MC13 MC14 MC15 MC16 MC17 MC18 MC19 MC20
D C D A C C C B
MC23 MC24 MC25 MC26 MC27 MC28
B D B D D A
2,250,000 + 125,000 = 2,375,000 50,000 + 20,000 = 70,000 320,000 + 580 = 320,580 682,250 – 25,000 – 10,500 – 127,500 – 4,950 – 6,450 = 507,850 or 3,600 + (336,750-6,000) + (178,000-10,500) = 501,850 Dr. Expenses-950; Dr. Cash Short and Over-50; Cr. Cash in Bank-1,000 3,800 + 12,00 + 12,500 = 17,500 1,825 + 1,500 + 5,150 = 8,475 10,000 – (1,825 + 1,500 + 280 + 650 + 500 + 5,150) = 95 50,000 + 20,000 – 15,000 = 55,000; 43,000 – 6,000 + 15,000 = 52,000 55,000 – 52,000 = 3,000 180,500 + 32,500 – 27,500 = 185,500 677,600 – 580 + 900 = 677,920 or 653,230 – 98,760 + 123,450 = 677,920 95,000 + (10,000 – 4,500) = 100,500 17,000 + 490,000 – 476,000 = 31,000 39,000 + 610,000 – (617,000 – 15,000) = 47,000 768,370 – 132,274 + 20,750 = 656,846 450,000 + 9,400 – 3,200 - 900 + 180 = 455,480 67,000 + 798,000 – 91,000 = 774,000 collections from sales; 583,000+78,000–86,000 + 53,000 – 48,000 = 580,000 payments to trade creditors; 62,000 + 774,000 – 580,000 – 107,000 =149,000 1,500 + 5,000 + 486,000 + 12,000 = 504,500 96,000 – 4,000 + 7,000 = 99,000 650,000+1,300,000–1,100,000 = 850,000 + 150,000–84,000+7,500 = 923,500 1,154,800 + 180,000 + 2,700 = 1,337,500 1,123,500 – 4,500 + 6,000 – 56,000 + 48,000 = 1,117,000 70,000 – 2,000 + 290,000 + 50,000 – 50,000 – 280,000 + 80,000 – 35,000 – 83,500 = 39,500 25,000 + 224,200 – 78,200 = 171,000 261,000 – 41,500 – 15,000 = 204,500 217,200 – 25,000 – 192,200 (45,000 + 10,000 + 8,000) – (34,000 – 300 – 3,200 – 3,600 + 2,700) = 33,400
CHAPTER 3 - RECEIVABLES 3-1. a. b.
Accounts Receivable Receivables from Employees (part of non-trade receivables) – current assets
c. d. e. f. g. h.
Advances to Suppliers – Current assets or deduction from Accounts Payable to the same supplier Accounts Receivable Customers’ Accounts with Credit Balances – Current Liabilities Cost of merchandise must be included in inventories Accounts Receivable Subscriptions Receivable – current asset if collectible within 12 months; otherwise, non-current asset or deduction from Shareholders’ Equity i. Other Non-Trade Receivables – Current asset or non-current asset depending on terms of payment j. Advances to Suppliers – Current Assets k. Suppliers’ Accounts with Debit Balances or Advances to Suppliers – Current assets l. Accounts Receivable m. Claims for Income Tax Refund – Current Assets n. Accounts Receivable, amount of loan presented separately as part of liabilities o. Accounts Receivable p. Not recognized anymore (for write off) MULTIPLE CHOICE QUESTIONS Theory MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10
A B A A C A D A A C
Problems MC19 B MC20 D MC21 MC22 MC23 MC24 MC25 MC26 MC27 MC28 MC29
C B A D D C D B B
MC30 MC31 MC32 MC33 MC34 MC35 MC36 MC37
A A B D C C C B
MC38 MC39 MC40 MC41
A C B B
MC11 MC12 MC13 MC14 MC15 MC16 MC17 MC18
C C A C A D A C
450,000 x 1.4 = 630,000; 630,000 – 585,000 = 45,000 105,000 x .90 = 94,500 (Invoice price/Gross) 94,500 x .98 = 92,610 (net price) 200,000 x .90 x .95 = 171,000 (Invoice price/Gross); 171,000 x .97 = 165,870 (Net) 1,300,000 + 5,400,000 + 25,000 – 4,750,000 – 125,000 = 1,850,000 360,000 ÷ 80% = 450,000; 450,000 + 80,000 – 430,000 = 100,000 75,000 + 45,000 = 120,000 3% x 1,000,000 = 30,000 30,000 + 8,000 = 38,000 270,000 – 250,000 = 20,000; 20,000 + 23,000 – 28,000 – 5,000 = 10,000 17,500 – 30,500 + 8,050 + 200,000 = 15,050 480,000 + 2,400,000 – 2,560,000 – 17,600 – 36,800* + 4,800 = 270,400 *1,411,200 ÷ .98 = 1,440,000 x 2% = 28,800 792,000 ÷ .99 = 800,000 x 1% = 8,000; 28,800 + 8,000 = 36,800 19,200 + 4,800 – 17,600 = 6,400; 5% x 270,400 = 13,520; 13,520 – 6,400 = 7,120 (5% x 600,000) + (10% x 40,000) + 14,000 = 48,000 20,000 + 7,500 – 12,500 – 3,700 = 11,300 50,000 + (50,000 x 10%) = 55,000; 55,000 – (55,000 x .12 x 6/12) = 51,700 400,000 x .75 = 300,000; 300,000 x 10% = 30,000 300,000 + 30,000 = 330,000 1,940,000 x 13.4% x 1/12= 21,663 2,000,000 x 12% x 1/12 = 20,000 (Note: The difference between interest income of P21,663 and interest receivable of 20,000 is debited to Discount on Notes Receivable). 902,500 – (11% x 2,800,000) = 594,500 (308,000 x 6/12) + (242,605 x 6/12) = 275,303 (See complete amortization table below)* 500,000 + (500,000 x 8%) = 540,000; 540,000 – (540,000 x 10% x 8/12) = 504,000 1,250,000 - (2% x 1,250,000)} = 1,225,000; 1,225,000 + 695,000 = 1,920,000
MC42 MC43 MC44 MC45 * Date July 1, July 1, July 1, July 1, July 1,
D C A D
2012 2013 2014 2015 2016
(500,000 + 2,200,000) x 3% = 81,000; 81,000 – 32,000 = 49,000 550,000 – [(500,000 x 0.8265) + (40,000 x 1.7355)] = 67,380 5,500,000 – [(4,000,000 X .83) + (320,000 X 1.74)] = 1,623,200 (4,000,000 X .83) + (320,000 X 1.74) = 3,876,800
Annual payment 902,500 902,500 902,500 902,500
Interest income
11% x 2,800,000=308,000 11% x 2,205,500=242,605 11% x 1,545,605=170,017 902,500-813,122=89,378
Reduction in principal 902,500-308,000=594,500 902,500-242,605=659,895 902,500-170,017=732,483 813,122
CHAPTER 4 INVENTORIES PROBLEMS 4-1.
(HAMSTER COMPANY) Include Goods displayed in the store
√
Goods stocked in the warehouse, not covered by any sales contract
√
Goods purchased, in transit, shipped FOB seller
√
Goods purchased, in transit, shipped FOB destination Freight cost on goods received, goods are still unsold
Exclude
√ √
Goods held on consignment
√
Goods out on consignment
√
Goods out to customers on approval
√
Goods in the hands of traveling salesmen
√
Goods sold with a buyback arrangement for the full selling price and other costs incurred by the buyer
√
Unused factory supplies and indirect materials
√
Goods which require additional processing
√
Direct materials stocked in the warehouse
√
Storage costs of goods completed
√
Insurance premiums paid on stocked goods
√
Goods completed, manufactured to customer’s specification, awaiting instruction for delivery by the customer
√
Freight paid on goods sold
√
Unused supplies for administrative purposes
√
Balance 2,800,000 2,205,500 1,545,605 813,122 -0-
Unused store supplies
√
Goods sold with a right to return granted to buyers, amount of return is reasonably predictable.
√
MULTIPLE CHOICE QUESTIONS
Theory MC1 MC2 MC3 MC4 MC5
D A D D D
MC6 MC7 MC8 MC9 MC10
Problems MC22 MC23 MC24 MC25 MC26 MC27
D C A B D B
MC28 MC29 MC30 MC31
C B C C
MC32
A
MC33 MC34
C B
MC35 MC36 MC37
C C C
MC38
B
MC39
D
MC40
C
A A D A A
MC11 MC12 MC13 MC14 MC15
C A A C D
MC16 MC17 MC18 MC19 MC20 MC21
A D D C D D
90,000 x .80 x ..90 = 64,800; 64,800 + 5,000 = 69,800 150,000 x .85 x .90 x .95 = 109,012.50 109,012.50 x .98 = 106,832.25 3,280,000 + 900,000– 80,000 = 4,100,000 x 3% =123,000; 123,000–27,000=96,000 1,500,000 + 50,000 = 1,550,000 (b) 450,000 ÷ 1.5 = 300,000; (d) 600,000 + 60,000 = 660,000 300,000 ÷ 1.5 = 200,000 + 30,000 = 230,000 3,000,000 + 300,000 + 660,000 + 230,000) = 4,190,000 5,000,000 + 80,000 + 800,000 – 25,000 = 5,855,000 77,500 + 6,000 = 83,500 550,000 + 90,000 + 380,000 + 450,000 + (150,000 x .80) = 1,590,000 104,000 ÷ 1.3 = 80,000; 80,000 x .30 = 24,000 24,000 + 56,000 + (32,500 – 25,000) = 87,500 (3,000 x 35) + (2,000 x 36) + (1,000 x 37) = 214,000 Sales (4,000 x 25) + (2,000 x 26) = 152,000 CGS; 214,000 – 152,000 = 62,000 (1,600 x 8) + (4,800 x 9.60) = 58,880; 58,880 ÷ 6,400 = 9.20 Confidence: cost 22; NRV = 30 – 3 = 27; lower is 22 Positive attitude: cost 55; NRV = 80 – 28 = 52; lower is 52 (1,000 x 25)+(2,000 x 36)+(3,000 x 120) +(4,000 x 18) =529,000 600,000 + 1,500,000 – (2,240,000 ÷ 1.4) = 500,000 2,550,000 + 250,000 – 300,000 = 2,500,000 Purchases 2,800,000 + 900,000 – 700,000 = 3,000,000 Sales 3,000,000 ÷ 1.25 = 2,400,000 CGS 180,000 + 2,500,000 – 2,400,000 = 280,000; 280,000 – 110,000 =170,000 short CGS-2011 = 1,040,000; CGS-2012 =1,550,000; total CGS (2011 and 2012) = 2.59M 2011 and 2012 sales = 1,700,000 + 2,000,000 = 3,700,000; 2.59/3.7 = 70% 520,000 + 2,180,000 – (2,500,000 x 70%) = 950,000 950,000 – (70% x 150,000) – 95,000 = 750,000 408,8976 ÷ 524,200 = 78%; 450,200 – 5,100 = 445,100; 445,100 x 78% = 347,178 105,650 + (378,245 – 10,295) = 473,600; 473,600 - 347,178 =126,422 126,422 – 69,738 – 5,000 = 51,684 400,000 + 1,280,000 –740,000 = 940,000 Direct materials used 940,000 + 960,000 + (50%x 906,000) = 2,380,000 Total mfg. Cost 4,000,000 x 75% = 3,000,000 Cost of goods sold 3,000,000 + 1,310,000 – 1,500,000 = 2,810,000 Cost of goods avail for sale 2,380,000 + 1,100,000 – 2,810,000 = 670,000
MC41
C
MC42
D
MC43 MC44
A C
MC45
D
617,000 + 1,281,000 – 21,000 + 31,000 = 1,908,000 Avail for sale at cost 1,057,000 + 2,158,000 – 35,000 = 3,180,000 Avail for sale at retail 1,908,000 ÷ 3,180,000 = 60% Cost to retail ratio 3,180,000 – 2,365,000 + 62,000 = 877,000; 877,000 – 780,000 = 97,000 97,000 x 60% = 58,200 47,075 + 213,327 + 3,400 = 263,802 Avail for sale at cost 70,025 + 306,375 = 18,900 – 7,800 – 10,640 = 376,860 Avail for sale at retail 263,802 ÷ 376,860 = 70%; 320,500 x 70% = 224,350 376,860 – 320,500 = 56,360; 56,360 – 39,390 = 16,970; 16,970 x 70% = 11,879 23,000 + 120,000 = 143,000; 60,000 + 220,000 + 20,000 – 40,000 = 260,000 260,000 – 180,000 = 80,000; 143,000/260,000 = 55%; 55,000 P 80,000 =44,000 600,000 – 10,000 – 4,000 – 100,000 = 486,000
CHAPTER 5 PROPERTY, PLANT AND EQUIPMENT MULTIPLE CHOICE QUESTIONS
Theory MC1
A
MC11
B
MC2
B
MC12
A
MC3
D
MC13
D
MC4
D
MC14
D
MC5
C
MC15
B
MC6
A
MC16
B
MC7
C
MC17
D
MC8
B
MC18
B
MC9
C
MC19
D
MC20
B
MC1 B 0 Problems MC36 D MC37 C MC38 D MC39 D MC40 C MC41
A
MC42
C
MC43
C
MC44
C
MC45
C
MC46
B
MC2 1 MC2 2 MC2 3 MC2 4 MC2 5 MC2 6 MC2 7 MC2 8 MC2 9 MC3 0
D B D B D
MC3 1 MC3 2 MC3 3 MC3 4 MC3 5
D C C C D
D C A C B
14,400,000 x 5/20 = 3,600,000 200,000 + 3,000 + 6,000 = 209,000 Cost of equipment is the fair value of FVPL exchanged (800,000 – 20,000) x 12/78 x 9/12 = 90,000 780,000 x 11.25/78 = 112,500; 90,000 + 112,500 = 202,500 800,000 – 202,500 = 597,500 4,500,000 + 30,000 + 6,000 + 40,000 + 60,000 = 4,636,000 Land 10,000 + 50,000 + 90,000 + 45,000 + 150,000 + 9,800,000 = 10,145,000 Building 1,800,000 x 10% = 180,000; 180,000 – 45,000 = 135,000 2,500,000 – 1,800,000 = 700,000;7 00,000 x 9% = 63,000; 135,000+63,000=198,000 4,000,000 x 10% x 6/12 = 200,000 750,000 x 12% x 6/12 = 45,000; 200,000 + 45,000 = 245,000 1,000,000 + (4,000,000÷ 2) = 3,000,000; 2,000,000 x 10% = 200,000 1,000,000 x 11% = 110,000; 200,000 + 110,000 = 310,000 20,000 FV – cash received 3,000 = 17,000 cost; 40,000 – 30,000 = 10,000; 20,000 – 10,000 = 10,000 Gain 20,500 – 6,000 = 14,500; 14,500 – 16,800 = 2,300
MC47
A
MC48
A
MC49 MC50 MC51
D C A
MC52
C
MC53
B
MC54 MC55
B A
MC56
C
MC57 MC58 MC59 MC60
A D D C
MC61 MC62
C A
MC63
B
MC64
D
MC65
B
MC66
C
MC67 MC68 MC69 MC70
D C B B
MC71
A
MC72 MC73
D C
MC74
C
MC75
B
4,500,000 + 1,320,000 + 77,000 + 53,000 = 5,950,000 total depreciable cost 112,500 + 66,000 + 9,625 + 13,250 = 201,375 total depreciation expense 5,950,000 ÷ 201,375 = 29.5 yrs. 4,800,000 + 1,400,000 + 82,000 + 53,000 = 6,335,000 total cost 201,375 ÷ 6,335,000 = 3.18% 4,500,000 ÷ 40 yrs. = 112,500 77,000 x 6/36 = 12,833 240,000 – 12,000 = 228,000; 228,000 ÷ 120 mos = 1,900; 1,900 x 63 mos = 119,700 240,000 – 119,700 = 120,300; 120,300 – 130,000 = 9,700 270,000 x (8+7)/36 = 112,500 270,000 ÷ 8 = 33,750; 33,750 x 2 = 67,500; 112,500 – 67,500 = 45,000 1.5/5 = 30% depreciation rate; 600,000 x 30% x ½ = 90,000 600,000 – 90,000 = 510,000; 510,000 x 30% = 153,000 240,000 ÷ 40 = 6,000; 240,000 x .90 x.90 x .10 = 19,440; 72,000 x 2/10 = 14,400 90,000 x (5+4+3)/15 = 72,000 reported accum depreciation under SYD 90,000 x 2/15 = 12,000 160,000/4 = 40,000; 400,000/40,000 = 10 years 240,000 – 40,000 = 200,000; 200,000 – 65,000 = 135,000 900,000 – 420,000 = 480,000; 480,000 – 300,000 = 180,000 (900,000 – 300,000) / 3 yrs = 100,000; 600,000 + 100,000 = 700,000 42,000 x 55 = 2,310,000; 2,310,000/7 = 330,000; 330,000 + 5,000 = 335,000 49,200,000 – 43,755,000 = 5,445,000; 5,445,000 ÷ 4.5 years = 1,210,000/yr 1,210,000 x 40 yrs = 48,400,000; 49,200,000 – 48,400,000 = 800,000 54,000,000 – 6,000,000 + 7,200,000 = 55,200,000; 55,200,000 ÷ 2,400,000 = 23 3,400,000 – 200,000 + 800,000 = 4,000,000 4,000,000 ÷ 4,000,000 = 1.00 per ton; 1.00 x 375,000 tons = 375,000 3,600,000 ÷ 800,000 = 4.50; 4.50 x 60,000 = 270,000 96,000 – 6,000 = 90,000; 90,000 ÷ 800,000 = 0.1125; 0.1125 x 60,000 = 6,750 P0 for Quarry No. 1 since the asset is not owned. 1M– 300,000 = 700,000; 700,000 ÷ 100 M = 0.007/ton; 0.007 x 1,380,000 = 9,660 .007 x 40,000,000 = 280,000; 700,000 – 280,000 = 420,000 420,000 ÷ 20,000,000 = 0.21; 0.21 x 1,380,000 = 28,980 (8,600,000-600,000) ÷ 40 yrs = 200,000; 200,000 x 5 yrs. = 1,000,000 8,600,000-1,000,000-600,000 = 7,000,000; 7,000,000 ÷ 30 yrs = 233,333 8,000,000 – 1,000,000 – 233,333 = 7,366,667; 7,500,000 – 7,366,667 = 133,333 160,000 x 10 yrs = 1,600,000; 4M – 1.6M = 2.4M; 3,240,000 – 2,400,000 = 840,000 4,000,000 ÷ 160,000 = 25 years; 25 – 10 = 15 years; 3,240,000 ÷ 15 = 216,000 160,000 x 9 yrs. = 1,440,000; 4,000,000 – 1,440,000 = 2,560,000 2,560,000 – 500,000 = 2,060,000; 2,060,000 ÷ 16 yrs. = 128,750 2,060,000 – 128,750 = 1,931,250; 3,240,000 – 1,931,250 = 1,308,950 160,000–128,750=31,250; 500,000–31,250 =468,750; 1,308,750 – 468,750 = 840,000 (360,000 ÷ 6) x 2.5 yrs = 150,000 360,000 – 150,000 = 210,000 book value; 210,000 – 70,000 = 140,000 loss 70,000 ÷ 3.5 remaining years = 20,000; 70,000 – 20,000 = 50,000 1,800,000 – 600,000 = 1,200,000; 600,000 ÷ 3 = 200,000 1,200,000 + 200,000 = 1,400,000 3,000,000 – 300,000 = 2,700,000; 2,700,000 ÷ 10 = 270,000 270,000 x 4 = 1,080,000 3,000,000 – 1,080,000 = 1,920,000; 1,920,000 – 900,000 = 1,020,000 1,920,000 ÷ 6 yrs = 270,000 or 2,700,000 ÷ 10 yrs = 270,000
CHAPTER 6 INTANGIBLE ASSETS PROBLEMS 6-1.
(Daydream Corporation) a. Expense, cost of internally developed publishing title is not allowed to be capitalized.
b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r.
MC1 MC2 MC3 MC4 MC5
D D C B B
Problems MC21 MC22 MC23 MC24 MC25
D C C B B
MC26
B
MC27 MC28 MC29 MC30 MC31 MC32 MC33 MC34 MC35 MC36 MC37 MC38 MC39 MC40 MC41 MC42 MC43 MC44 MC45 MC46
C C B A C C A A C B C D A B B C C A C B
Intangible Expense Intangible Intangible Prepaid expense With alternative use, PPE; otherwise, unrecoverable cost, R and D Charged to RE Expense Intangible Intangible Expense Expense, copyright shall be written off in profit or loss Expense Expense PPE Expense Expense MULTIPLE CHOICE QUESTIONS Theory MC6 A MC11 B MC16 MC7 C MC12 D MC17 MC8 D MC13 B MC18 MC9 B MC14 D MC19 MC10 D MC15 C MC20
expense
B A B D C
244,000 + 100,000 = 344,000 Initial franchise fee of P1,000,000 750,000 + 150,000 = 900,000 200,000 + (100,000 x 2.91) = 491,000 1,200,000 x 2/50 = 48,000; (750,000 ÷ 10) x 2/12 = 12,500 60,000 x 2/12 = 10,000; 48,000 + 12,500 + 10,000 = 70,500 125,000 ÷ 10 = 12,500; 272,500 ÷ 5 = 54,500 x ½ = 27,250 656,200 ÷ 17 = 38,600; 12,500 + 27,250 + 38,600 = 78,350 340,000 ÷ 10 = 34,000 x ½ = 17,000 340,000 – 17,000 – 34,000 = 289,000 289,000 ÷ 5 = 57,800 P0 68,000 + 24,000 + 6,000 + 19,000 = 117,000 152,000 ÷ 8 = 19,000 1,440,000 x 1.5/10 = 216,000 40,000 + 5,000 = 45,000 900,000 x 7/10 = 630,000 210,000 + 300,000 + 400,000 + 220,000 + 260,000 = 1,390,000 1,500,000 ÷ 30 = 50,000 480,000 ÷ 10 = 48,000 (480,000 x 5/10) + 200,000 = 440,000; 440,000 ÷ 10 = 44,000 440,000 – (44,000 x 3.5 yrs) = 286,000 270,000 x 6/10 = 162,000; 162,000 ÷ 3 = 54,000; 162,000 – 54,000 = 108,000 1/5=20%; Depreciation is the higher rate, 20%; thus carrying amount is 80% 25% X 6M = 1,500,000 1,500,000 ÷ 5,000,000 = 30%; 30% x 2,500,000 = 750,000 115,000,000 – 52,500,000 = 62,500,000; 70,000,000 – 62,500,000 = 7,500,000 1,000,000
Theory MC1 MC2 MC3 MC4 MC5
CHAPTER 7 INVESTMENTS IN EQUITY SECURITIES AND DEBT SECURITIES B B C A C
Problems MC18 MC19 MC20 MC21
B B C D
MC22 MC23 MC24 MC25 MC26 MC27 MC28 MC29 MC30 MC31
A C D C B B B A B A
MC32 MC33
A B
MC34 MC35 MC36
A C B
MC37 MC38 MC39 MC40
C B B A
MC41 MC42
C C
MC43 MC44
C B
MC45
D
MC46 MC47 MC48 MC49
D B D C
MC50
D
MC6 MC7 MC8 MC9 MC10
D B A A B
MC11 MC12 MC13 MC14 MC15
B C A C C
MC16 MC17
B D
535,000 – 525,000 = 10,000 2,000,000 – 1,750,000 = 250,000 loss 2,100,000 – (2,000,000 + 50,000) = 50,000 FV 12/31/ Year 2 (600 x 440) + (2,000 x 138) = 540,000 FV 12/31/Year 1 = 270,000 + 280,600 = 550,600 Change in FV = 540,000 – 550,600 = 10,600 decrease or debit 1,000 x 150) + 2,250 = 152,250; 152,250 – (1,000 x 10) = 142,250 10,000 x 150 = 1,500,000; 1,500,000 + (20% x 3M) – (10,000 x 50) = 1,600,000 960-500 = 460; 460 + 600 = 1,060; 1,060/10 = 106 shares (500 x 20) – 500 = 9,500; 106 x (620 – 450) = 18,020; 9,500 + 18,020 = 27,520 88 ÷ 1.10 = 80 1,200,000 – (3 x 40,000) + (25% x 640,000) = 1,240,000 1,000 x (140 - 130) + 900 x (170 – 180) + 800 x (200- 220) = 15,000 additional loss 1,000 x (20) + 15,000 = 35,000 40% x 450,000 = 180,000; 150,000 ÷ 12 = 12,500; 180,000 – 12,500 = 167,500 25,000 x 180 = 4,500,000; 25% x (2,400,000 – 480,000) = 480,000 4,500,000 + 480,000 – 60,000 – 60,000 = 4,860,000 CV at date of reclassification is equal to FV = 15,000 x 200 = 3,000,000 10,000 x 200 = 2,000,000; 4,860,000 x 10/25 = 1,944,000 2,000,000 – 1,944,000 = 56,000 P0; No income is recognized upon receipt of bonus issue. 750,000 + 1,500,000 = 2,250,000 40% x 1,200,000 = 480,000; (40% x 900,000) ÷ 18 = 20,000 40% x 100,000 = 40,000; 480,000 – 20,000 – 40,000 = 420,000 4,000,000 + 420,000 – (40% x 200,000) = 4,340,000 20% x 5.5M = 1,100,000; 1,100,000 – (20% x 1,000,000) = 900,000 3,700,000 + 900,000 – (20% x 1,500,000) = 4,300,000 (1.04 x 1,000,000) = 1,040,000; interest receivable = 1,000,000 x 12% x 4/12 = 40,000 8,750,000 x 5% = 437,500 3,692,000 x 5% = 184,600; 4M x 4% = 160,000 184,600 – 160,000 = 24,600; 3,692,000 + 24,600 = 3,716,600 3,692,000 x 5% = 184,600 912,400 x 10% = 91,240; 1,000,000 x8% = 80,000 91,240-80,000 = 11,240; 912,400 + 11,240 = 923,640 7,850,000 – (8M x .08 x 6/12) = 7,530,000 selling price; 7,383,000 x 5% = 369,150 8M x 4% = 320,000; 369,150 – 320,000 = 49,150 7,383,000 + 49,150 = 7,432,150 CV Dec. 1, Year 1; 7,432,150 x 5% = 371,608 371,608 – 320,000 = 51,608; 7,342,150 + 51,608 = 7,483,758 CV June 1, Yr 2. 7,530,000 – 7,483,758 = 46,242 Carrying amount is equal to FV (472,500) 500,000 x 4% = 20,000 460,000 – 472,500 = 12,500 loss Selling price = 3,000 x 120 = 360,000; cost of shares sold = 560,000 x 3,000/6,000 = 280,000; Gain = 360,000 – 280,000 = 80,000 Cost of shares sold (for 2,400 shares, P200,000) + 600 /3,600 x 360,000 = 200,000
+ 60,000 = 260,000; Gain = 360,000 – 260,000 = 100,000
CHAPTER 8 INVESTMENT PROPERTY, OTHER NONCURRENT FINANCIAL ASSETS AND NONCURRENT ASSETS HELD FOR SALE
8-1.
Investment Property (a), (b), (c), (e), (g), (o), (r) with option to or not to report as investment property (d) (f) (h) (i) (j) (k) (l) (m) (n) (p) (q)
not shown in the financial statements Property, Plant and Equipment Property, Plant and Equipment, until consummation of lease Inventories Inventories Construction in Progress (Inventories) Property, Plant and Equipment Property, Plant and Equipment Property, Plant and Equipment Property, Plant and Equipment not shown, unless leased under finance lease (PPE)
MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC8
C C B A B C C D
MC17 MC18 MC19 MC20 MC21 MC22 MC23 MC24 MC25
B A D D C A D D C
MC26 MC27 MC28 MC29
B D B C
MC1 MC2 MC3 MC4 MC5 MC6 MC7
B D C D D B B
MC15 MC16 MC17 MC18
C C C A
MULTIPLE CHOICE MC9 B MC10 A MC11 B MC12 A MC13 D MC14 B MC15 C MC16 A 10M + 20M = 30M Revaluation surplus is credited; transfer is from owner-occupied property. 20,000,000 – 15,000,000 18,000,000 x 39/40 = 17,550,000; depreciation = 18,000,000/40 = 450,000 FV = 20,000,000; gain = 20,000,000 – 18,000,000 = 2,000,000 110,000 – (115,000 – 80,000) = 75,000 9.0M – 1.5M = 7.5M which is lower than carrying amount of 8.0M (9,200,000 – 1,300,000) – 7,500,000 = 400,000 2,000,000 x 0.7972 = 1,594,400 1,594,400 x 12% x 6/12 = 95,664; 1,594,400 + 95,664 = 1,690,064 100,000 + (200,000 – 160,000) = 140,000 40,000 – (108,000 – 87,000) – 6,000 = 13,000 2,250,000 + 450,000 + 75,000 + 150,000 – 25,000 = 2,900,000 5,000,000/ 5.11 = 978,500 CHAPTER 9 BIOLOGICAL ASSETS MC8 B MC9 A MC10 B MC11 B MC12 B MC13 C MC14 A 450,000 + 250,000 + 220,000 + 64,000 – 290,000 = 694,000 220,000 + 64,000 = 284,000 {(15,000-13,000) x 25} +{ (7,000-5,000) x 5 } + (4,000 x 5) = 80,000 {13,000 – 12,000) 25 + (5,000 – 4,000) x 5 = 30,000
MC19 MC20 MC21 MC22 MC23 MC24 MC25
D B B A C A
(25 x 15,000) + (5 x 7,000) = 410,000 30,000 + 80,000 = 110,000 5,000,000 – 50,000 = 4,950,000 10M + 4M + 800,000 + 1.5M – 2M – 0.5M = 350,000-10,000 = 340,000 330,000 – 10,000 = 320,000 345,000 – 9,500 = 335,500; 335,500 – 320,000 = 15,500
