Quiz On Other Liabilities
Quiz On Other Liabilities
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obligation and the loan becomes payable on demand. An agreement is
reached to provide a waiver of the breach on January 11, 2017.
• A long-term obligation of P4,000,000. The loan is maturing over 8
years in the amount of P500,000 per year. The loan is dated
September 1, 2016 and the first maturity date is September 1, 2017.
• A debt obligation of P600,000 maturing on December 31, 2019. The
debt is callable on demand by the lender at any time.
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Third 20%
Fourth through sixth-10% each month 30%
Gross sales of components were as follows for the first six months of
2016:
Month Amount Month Amount
January P4,200,000 April P3,250,000
February 4,700,000 May 2,400,000
March 3,900,000 June 1,900,000
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c. Both I and II
d. Neither 1 nor II
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d. Obligations for plant decommissioning costs.
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TRADE PAYABLES
Accounts Payable for supplies, goods and services purchases on open
account amount to P672,000 as of March 31, 2010.
DIVIDENDS
On March 10, 2010 San Isidro Board of Directors declared a cash dividend
of P0.30 per ordinary share and a 10% ordinary share dividend. Both
dividends were to be distributed on April 5,2010 to shareholders on
record at the close of business on March 31, 2010. As of March 31, 2010,
San Isidro has 6,000,000, P2 par value, ordinary shares issued and
outstanding.
BONDS PAYABLE
San Isidro issued P6,000,000, 12% bonds on October 1, 2004 at 96. The
bonds will mature on October 1, 2014. Interest is paid semi-annually on
October 1 and April 1. San Isidro uses the straight-line method to
amortize bond discount.
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20. An item that is NOT a contingent liability is
a. Premium offer to customers for labels or box tops
b. Accommodation endorsement on customer note
c. Additional compensation that maybe payable on a dispute now being
arbitrated
d. Pending lawsuit
21. When the occurrence of a contingent asset is probable and the amount
can be reliably measured, the contingent asset should be
a. Recognized in the statement of financial position and disclosed.
b. Classified as an appropriation of retained earnings
c. Disclosed but not recognized in the statement of financial position
d. Neither recognized in the statement of financial position nor
disclosed.
23. An expropriation of asset which is imminent and for which the amount
of loss ca be reasonably estimated should be
a. Accrued
b. Disclosed
c. Accrued and disclosed
d. Not accrued and not disclosed
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b. As a contingent current asset
c. In a note disclosure if the economic benefits are probable
d. As a contingent asset and other comprehensive income.
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a. Factor causing an estimate to be sensitive
b. The potential impact of estimate when it is reasonably possible that
the estimate will change in the future.
c. The potential impact of estimate when it is remotely possible that
the estimate will change in the future.
d. A description of operations both within and outside of the home
country.
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33. (2 points) Candelaria has a one-year product warranty on selected
items in its product line. The estimated warranty liability on sales
made during 2009, which was outstanding as of December 31, 2009 amounted
to P416,000. The warranty costs on sales made in 2010 are estimated at
P1,504,000. Actual warranty costs incurred during 2010 are as follows:
Warranty claims honored on 2009 sales P 416,000
Warranty claims honored on 2010 sales 992,000
Total warranty claims honored 1,408,000
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for each radio and estimates that 60% of the coupons given to customers
will be redeemed.
Dolores’ total sales for 2010 were P57,600,000-P43,200,000 from musical
instrument and sound reproduction equipment and P14,400,000 from
recorded music and sheet music. Replacement parts and labor for warranty
work totaled P1,312,000 during 2010. A total of 52,000 AM/FM radio used
in the premium program were purchased during the year and there were
9,600,000 coupons redeemed in 2010.
The accrual method is used by Dolores to account for the warranty and
premium costs for financial reporting purposes. The balance in the
accounts related to warranties and premiums On January 1, 2010 were shown
below:
Inventory of Premium AM/FM radio P 319,600
Estimated Premium Claims Outstanding 358,400
Estimated Liability from warranties 1,088,000
Based on the above, determine the amounts that will be shown on the 2010
FS for the following:
35. Warranty Expense
36. Estimated liability from warranties
37. Premium expense
38. Inventory of AM/FM radio
39. Estimated liability for premiums
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It is probable that Pasig City will be successful but the amount of
damages Eastern Co. might have to pay should not exceed P1,500,000.
42.(2 points) Annete Video Co. sells 1- and 2-year subscriptions for the
video-of-the-month business.
Subscriptions are collected in advance and credited to sales.
An analysis of the recorded sales activity revealed the following:
2019 2020
Sales 420,000 500,000
Less cancellations 20,000 30,000
Net sales 400,000 470,000
Subscription expirations:
2019 120,000
2020 155,000 130,000
2021 125,000 200,000
2022 140,000
400,000 470,000
On December 31, 2020, what amount should be reported as unearned
subscription revenue?
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43. What amount should be reported as contract revenue for 2019?
44. What amount should be reported as deferred contract revenue on
December 31, 2019?
45. What amount should be reported as contract revenue for 2020?
46. What amount should be reported as contract revenue for 2021?
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d. A gain contingency for estimated probable settlement
********************NOTHING FOLLOWS*************************
HDIPUNZALAN
10/31/2020
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