Professional Documents
Culture Documents
Additional
Additional
1. Panda Company assigns some of its patents to other enterprises under a variety of
licensing agreements. The following data are gathered for the year 2019:
During 2019, Panda received royalty remittance of P5,000,000. In its income statement
for the year ended December 31, 2019, Panda should report royalty income of
P5,600,000
Under the cash basis of accounting, JY would report royalty expense for 2017
P1,100,000
3. During 2019, Kew Company, a service organization, had P200,000 in cash sales and
P3,000,000 in credit sales. The accounts receivable balances were P400,000 and
P485,000 at December 31, 2018 and 2019, respectively. If Kew desires to prepare a
cash basis income statement, how much should be reported as sales for 2019 on a cash
basis?
P3,115,000
4. Peak Company borrows money under various loan agreement involving notes
discounted and notes requiring interest payments at maturity. During the year ended
December 31, 2019, Peak paid interest totaling P5,000,000. The balance sheets
included the following:
P4,500,000
5. Tung Company had total assets of P20,000,000 and shareholders' equity of
P15,000,000 on January 1, 2019. During the year 2019, assets increased by P3,000,000
and liabilities decreased by P1,000,000. Tung Company should report what amount of
shareholders' equity on December 31, 2019?
P19,000,000
6. Jim Wynn, M.D., keeps his accounting records on the cash basis. During 2019, Dr. Wynn
collected P180,000 from his patients. At December 31, 2018, Dr. Wynn had accounts
receivable of P25,000. At December 31, 2019, Dr. Wynn had accounts receivable of
P35,000 and unearned revenue of P5,000. On the accrual basis, how much was Dr.
Wynn's patient service revenue for 2019?
P185,000
7. Dunlap Company sublet a portion of its warehouse for 5-years at an annual rental of
P15,000, beginning on March 1. The tenant paid 1 year's rent in advance, which Dunlap
recorded as a credit to unearned rental income. Dunlap reports on a calendar-year
basis. The adjustment on December 31, of the first year should be?
Income Tax Expense will appear as a debit of P9,000 in the Balance Sheet columns and
Income Tax Payable as credit in the Income Statement columns.
11. The operating cycle of an entity
Is the time between the acquisition of assets for processing and their realization in cash
or cash equivalents
12. Elias Company reported liabilities on December 31, 2013 as follows:
In the December 31, 2013 statement of financial position, what total amount should be
reported as current liabilities?
1,500,000
13. For the purpose of stating the working capital of Mukherjee Corporation on December
31,2013, the following data are submitted:
How much is the total current liability of Mukherjee Corp. or December 31, 2013?
P178,000
14. The following totals are taken from the December 31, 2009, balance sheet of Streamer
Company:
After making any necessary changes, compute for the totals of Streamer's current
assets
P385,000
15. The following trial balance of an entity on December 31, 2016 has been adjusted except
for income tax expense.
What amount should be reported as current assets on December 31, 2016?
29,200,000
16. Searles does not elect the fair value option for recording financial assets and liabilities.
What amount of comprehensive income should Searles Corporation report on its
statement of income and comprehensive income given the following net of tax figures
that represent changes during a period?
P86,500
17. Which of the following must be included as a line item in an entity's statement of financial
position?
Investment property
18. PAS 1 precludes an entity to present or classify this account as current in the statement
of financial position.
40,000
20. An asset shall be classified as current asset when it satisfies any of the following criteria,
except
It is cash or cash equivalent that is restricted from being exchanged or used to settle
a liability for at least twelve months after the balance sheet date
21. The accounts and balances below were taken from Minnie Company's trial balance on
December 31, 2012. All appropriate adjusting entries have been made.
The amount reported as noncurrent liabilities in the December 31, 2012 income
statement
1,630,000
Equity
23. Brook Company provided the following information for the preparation of the statement
of cash flows for the current year:
The restructuring charge consists of two elements, namely P1,500,000 for the write
down in value of certain assets and P800,000 for recognition of an obligation to relocate
employees. None of the relocation has yet taken place.
Under the indirect method, how much should be reported as cash flow from operating
activities?
4,200,000
24. If (P2,450) net of tax is the reclassification adjustment in cluded in other comprehensive
income in the year the securities are sold, what is the gain (loss) that is included in
income from continuing operations before income taxes? Assume a 30% tax rate.
P3,500
25. For the purpose of stating the working capital of Mukherjee Corporation on December
31,2013, the following data are submitted:
How much is the total current asset of Mukherjee Corp. or December 31, 2013?
P395,600
26. Colon Company uses the direct method to prepare its statement of cash flows. The
company had the following cash flows during 2009:
The net cash provided by (used in) operating activities is?
P60,000
27. Dagger Company as of December 31, 2011 provided the following balances:
P27,000
28. The asset section of Anne Company's draft statement of financial position as of
December 31, 2011 is as follows:
The amount reported as current assets in Anne Company's December 31, 2011
statement of financial position
3,555,000
29. Shery Limited had the following cash flows during the reporting period:
The net cash connected to operating activities was:
P211,100
30. In a statement of cash flows, which of the following items is reported as a cash flow from
financing activities?
I. Payments to retire mortgage notes
II. Interest payments on mortgage notes
III. Dividends payments
I and III
31. In preparing Titan Inc.'s statement of cash flows for the year ended December 31, 2018,
the following amounts were available:
What amount should be reported on Titan, Inc's statement of cash flows for financing
activities?
$339,000
32. Yowie Company provided the following data for the purpose of reconciling the cash
balance per book with the balance per bank statement on December 31, 2015:
The cash in bank balance to be shown on Yowie's December 31, 2016 Statement of
Financial Position is?
1,500,000
33. Roxy Company had the following information for 2009 to its accounts receivable.
On December 31, 2009, the balance of accounts receivable before allowance for
doubtful accounts should be
1,825,000
P35,000
35. On May 1, 2015 Cheerleader Company purchased a short-term P1,000,000 face value,
12% debt instrument for P940,000 including accrued interest and classified it as
held-for-trading. Transaction costs incurred amounted to P3,200. The securities
scheduled maturity date is on January 1, 2020 and pays interest annually every June 30
and December 31. On December 31, 2015 the fair value of the debt securities was
quoted at 96.75. On March 1, 2016 the securities were sold for a total consideration,
including accrued interest of P971,300. The gain (loss) on the sale included in the 2016
comprehensive income statement is
16,200
36. The new standard clarifies the existing guidance on the collection of the asset's
contractual cash flows. When determining the applicability of this business model, an
entity should consider past and future sales information. If an entity holds financial
assets for sale then it will fail the business model test for accounting for the financial
assets at amortised cost. How are financial assets accounted for where the business
model's objective is both collecting contractual cash flows and selling financial assets?
FVTOCI
37. On January 1, 2014, Alameda Company purchased bonds with face value of P
5,000,000 to be held as "available for sale." The entity paid P 4,600,000 plus transaction
costs of P 142,000. The bonds mature on December 31, 2016 and pay 6% interest
annually on December 31 of each with 8% effective yield. The bonds are quoted at 105
on December 31, 2014. The bonds are sold at 110 on December 31, 2015.
The gain on sale on these bonds in the 2015 income statement.
592,931
38. The Company purchases 20,000 of bonds. The asset has been designated as one at fair
value through profit and loss. One year later, 10% of the bonds are sold for 4,000. Total
cumulative gains previously recognized in Jerome's financial statements in respect of the
asset are 1,000. What is the amount of the gain on disposal to be recognized in profit or
loss?
1,900
39. On January 1, 2009, Alaska Corporation purchased P1,000,000 10% bonds for
P1,051,510 (including broker's commission of P20,000). Interest is payable annually
every December 31. The bonds mature on December 31, 2011. The bonds are classified
as fair value through other comprehensive income. The bonds were selling at 103 on
December 31, 2009. On December 31, 2010, Alaska sold the bonds at 105. (Round off
present value factors to four decimal places). How much is the gain on sale of bonds on
December 31, 2010?
P31,519
40. On January 1, 2017, Gelyka Company purchased 12% bonds with face amount of
P5,000,000 for P5,500,000 including transaction cost of P100,000. The bonds provide
an effective yield of 10%. The bonds are dated January 1, 2017 and pay interest
annually on December 31 of each year. The bonds are quoted at 115 on December 31,
2017. The entity has irrevocably elected to use the fair value option. What amount of
gain from change in fair value should be reported for 2017?
350,000
41. On January 1, 2009, Alaska Corporation purchased P1,000,000 10% bonds for
P1,051,510 (including broker's commission of P20,000). Interest is payable annually
every December 31. The bonds mature on December 31, 2011. The bonds are classified
as fair value through other comprehensive income. The bonds were selling at 103 on
December 31, 2009. On December 31, 2010, Alaska sold the bonds at 105. (Round off
present value factors to four decimal places). How much is the gain on sale of bonds on
December 31, 2010?
P31,519
42. On April 1, 2009, Purefoods Company purchased as a short-term investment a
P1,000,000 face value 8% bond for P905,000 including accrued interest. The bonds
were designated as held for trading. The commission to acquire the bonds was P5,000.
The bonds are dated January 1, 2009 and mature on January 1, 2014, and pay interest
semi- annually on January 1 and July 1. On December 31, 2009, the bonds had a
market value of P920,000. On April 1, 2010, Purefoods sold the bonds for a total
consideration of P950,000. How much is the gain from the sale of short-term investment
in debt securities on April 1, 2010?
P10,000
43. On May 1, 2015 Cheerleader Company purchased a short-term P1,000,000 face value,
12% debt instrument for P940,000 including accrued interest and classified it as
held-for-trading. Transaction costs incurred amounted to P3,200. The securities
scheduled maturity date is on January 1, 2020 and pays interest annually every June 30
and December 31. On December 31, 2015 the fair value of the debt securities was
quoted at 96.75. On March 1, 2016 the securities were sold for a total consideration,
including accrued interest of P971,300. The initial amount recorded for the investment
classified as held-for-trading
900,000
44. On May 1, 2015 Cheerleader Company purchased a short-term P1,000,000 face value,
12% debt instrument for P940,000 including accrued interest and classified it as
held-for-trading. Transaction costs incurred amounted to P3,200. The securities
scheduled maturity date is on January 1, 2020 and pays interest annually every June 30
and December 31. On December 31, 2015 the fair value of the debt securities was
quoted at 96.75. On March 1, 2016 the securities were sold for a total consideration,
including accrued interest of P971,300. The gain (loss) included in the profit or loss
section of the 2015 comprehensive income statement
67,500
45. Pony Tail Corp. has an outstanding 10% note payable dated October 1, 2011 and is
payable in three equal annual payments of P600,000 plus interest. The first interest and
principal payment was made on October 1, 2012. In Pony Tail 's June 30, 2013
statement of financial position, what amount should be reported as accrued interest
payable for this note?
90,000
46. On January 1, 2014, Icar Company issued convertible bonds with a face value of
P5,000,000 for P6,000,000. The bonds are convertible into 50,000 shares with P100 par
value. the bonds have a 5-year life with 10% stated interest rate payable annually every
December 31. The fair value of the convertible bonds without conversion option is
computed at P5,399,300 n January 1, 2014. On December 31, 2016, the convertible
bonds were not fully converted but fully paid for P5,550,000. On such date, the fair value
of the bonds without conversion privilege is P5,400,000 and the carrying amount is
P5,178,300. What is the loss on the extinguishment of the convertible bonds on
December 31, 2016?
221,700
47. Moon Company is experiencing financial difficulty and is negotiating a debt restructuring
with its creditor. Moon Company has an outstanding financial liability of P5,000,000.
Stars Financing Company accepted an equity interest in Moon Company in the form of
500,000, P9 par value ordinary shares which at the time of restructuring was quoted at
P9.80 per share. The fair value of the obligation at the time of the restructuring was
P4,800,000
The amount of gain to be recognized arising from the debt restructuring by way of an
"equity swap" is
100,000
48.