cPAiREVIEW SCHOOL OF

i
PRACTICAL ATICOLINTIN(I PRI)BI ElvtS
Final Preboard Exanrination

'i-HL,

PHIi-iT,PINES

ltlanila
i

September 1 5. 20
12:00 p.m. to 3:00 p.m,

Iiurrcia.y,'.

SET A

MULTIPI,E CHOICE: MARK FULLY with Pencil No. 2 the lettet'oiy',rt"rr choice ort tlte answer sheet
prgvided. Make the rnark DARK but do not use too tnucli pressure. ERAS{JR-ES A}18 STP-ICTI Y NOT

ALLowED

Brave Company ieased eluiprnent to Fright Cornpany on.ia,tLlarl' t,?tti-j. The lease is foi an
eigfit-vear ieriod e>piring Lierrer:.,t,,:r :,1" 2020. T'he fir'si o;'cight eq;al annual paymentl_of
P900.000 was made on January 'i.2{,li.i l-trrr,'e iia,j purchasecl the equipnient on December 29.
2A12 lor P4.800"0fi0. fhe lease is appropriately 6sgc'rntecl fur 3s I srile:r-|'';pe lease by Brave.
1'he present value ai.lanuirrv 1^2Al3,lf minirnum lease o;tiittii'1:.{]\tn "tr iea:;e tet'm drscounted
ar a l{)o,.0 irrterest rate w*ias P5.2X0.(){,)1. \.[he1 atrO']lii i;l'ir-.i;r*si r.r\;enul shuirld Brave record in
2Lri4 as a result of tlie leabe'J
j

a. ,-t90.000

.+i30.0t)0

b.

l
i

c.438.000
11.

2.

l9l 800

lt

ll
I

,i

ri

Hug Company leased eqilippent to Rave Companyion h,'ir,i' i..-iiil. fhe ii:ase expires on $4a1'
1. 2014. Rave coulcl have tought the equip,r',.it i,on, L,rig tor i'-1.200.i-)CO instead of'leasin! it'
Hug's accounting recordb showed a carr;,,ir-rg aini'-'hnt tbr ih; equipn:eli on \4iry 1.2013 of
P2.800"000. Hug's depre;^iation on the equifmeni in 2rl1.i r a; i''lriO.'l{)U. Durir-rg 2013. Rave
paid P720.000 in rentals to Hug for the 8-moitth period. flug incurrec i;rainti.'nance and other
related costs uncl.er the tenns of the lease of P60.0t10 in 2Ll1-1..'\iter thr,: lease expires. Hug will
lease the equipmenf to another entity fol two r,,eats. Whei amolrr-rl of .rei i'l.:rJ:-nc should Hug
recognize for 201 3 ?

a. i0().U0(t
b. 360.000
c. 660.000

d.

720.000

i
|

3.

Carcia C'ompanl,is erpJriencing t)nancial ilificirJtics,,ritl-,.il'!. llank. Carcia negoliated with

.l PE ancl arrive,.l at ati agft(:nteel to ies.trir(tur'. il. ir(,L r):'fi , .' rt .h ' cn,l 'rr'the current period'
it( t-t';ii in:ereu^rli P960'000'
Garcia or'led JPE a noterwitli p'incipal an't,;'itli c'l'l'li i.]{' ii''
"-i
Based on the agreelnent. JPE will accept e0uipriieiit vriiir l, i;,;i''alu.: rrl I'1.600.000 and a'note
receir,able: tiorn Garcia's custoiner with carr;ving aino'i11 L'a i'b.C,,)i',ifi'.r ii v.;as detetmined that
the equipment had been acq.uired at P2.,5t)0,C00 iviitr it i-611"tr 0.'r,) i't:riduri vaiue ancl had been
30% depreciated at the end oicurrent pi:r:icci. t,ri':rrt atlolilr!,-ri.:". ; 'i-!,r ..:."'r;.igitlsh:-'tt,tlt tllclebt
should Garcia recognize'/
'1.i60.000
b. r"560.000

a.

c. q60-000
d.0
4.

On Decernber 1.20i3" Ban (iontpar-iy exc[ian;;ci.l -i0.1'r.)C sl.ii]rt.,, t.,t'it,; Ftd par',aiue t-rrdinat']
shiires helrl in rreasllt)i ltlr a useil rnachine. |he rri:its,,rr\'s.r1rc-' \'vtr'i i.r(-,itrirecl hy Ban at a cost of
P40 pcr share and are accortnted f-or itndrl il:e c,)si !lr.r';ir():1. ()it th,.: datc of exchange. the
ordinary' shares had a tair value ol'F55 pel shar*" bui t'r:',i-,?it':,',n,ere oriilinally issued at P30
per share. What is the total increax ii: eqi;rl', :j:l c ri:-r'ili Dlil-r,:: e:ichilng;')

a. I "800.00U
b 1.600.000
c. 2.200.i.t00
d, 600.000

compute
Toro Conrpany repofted P6.750.000 inc,.lme before provision for income tax' To
provision fbr income tax. the fbllowing data are prtli'ided tbr 2013:

5.

Rent received in adr ance

Inconte from exempt n-iunicipal bonds

Depreciation derluction fbr inct'rme tax purposes in excess of depreciation
reported for financiaI accounting plliposes
Estimated tax payrnent for 2013
Enacted corporate income tax rate
What an.rount of current tax liabilitl' shou;C tie reForted on December

'

1.200.000
1.500.000
750.000
375,000
3A%

201 3?

a 1.315.000
b. i.700.000
c i.915.000
d"

o.

2"

r60.000

data in connectlon
On.lanuarl,' 1.2013 prior to PAS 19R. ito;c {'ci1ipa.n1 provided the tbllou'ing
with its detlned benetit plan:
i 0.000"000

Fair value of plan assets

Unamortized past service cost
Projected benefit obligation

i.000"000
1 3.000.000

5 years. I'he
vesting period fbr employ;l:"i: l0'rtred by tl-re past serlice c^ost is
plan for 2013 are:
enrity actopteJPAS lidon January 1,20ii. Transactions affecting the

Tl-re remaining

Current service cost

Contribution to the Plan
Benefits paid to retirees
Actual return on plan assets
Decrease in PBO due to changes in actuarial asclttlrpticnS
Settlement interest rate

2.500"000

3.500.000
3.000.000
1.500.000
400.000
10%

31' 2013'l
What amount should be reportecl as prepriti ('t .ttcit.rcL'l heneflt crst on December
a, .I.400.000 prepaicl
b, 1.400.000 accrued
c. 600.000 prepaid
d. 600.000 accrued
7.

shares' These
Garbo Company ow,ned 40,000 shares ef f)r I C'ompany's P5 i::ir viilue orCinari'
Garbo declared a
shares were purchased in 2011 fc,r i:360.00C. On September 15. 201i.
On
proper-tl dividend of one share ot'Owl firr i\';1",, ten shares of Garbo held by a shareholder'
shares of Carbo
that date. the market price of Ow! u,as i'28 pii shirre and there were 360.000
the
shareholders';rhen
the
outsta.di.g. on December 31.2013. thg,-111,i;i.rirl was distributecl to
result
would
market,,,alue of the Or,ry,l share u,,as P2i. vVhat net, recir-iction in rclaitted carnings

fiom thi; picpcrt) 'lii'iclcnd irr l'-'11'.'

a.
h.
c.
d,
8.

1.r108.000

900.000

360.000
324.000

oi P20 par vallte and 60.000 no-par 89/o

preference ,i,ur., with a stated vahre r:i- P.;,i). lhe prefbrence shares are cumulative and
nonparticipating, Dividends have been paid in evcry year except the past two years and the
year'
cr.rrrent year. The entity declared P630,000 as dividends to be disiributed in the current
What arnount of dividends u,ill the ordinarli shai'eholders receive?

$/itt Company had outstanding 300.00C orciinar',

a. 210.000
b. 420"000
c. 6-10.000

d0

sltaie:;

l,

Gorti Cornpany grarrterJ an e,npl{p'ee an cDri,rl 1o blt', 2rJ0.00C Gotti shajes

for P30 per share. The options are exercisable rp;1: year:, fron: ,lrte oi'',c,ting. Using a tair
value opiion pricing moa{i. total compensation exppnse is detrirnined io be F 1,800,000. The
employee exercised the o$tion onJanuary 1,2016. and sold the 200,000 shares on December
31.2016. Quoted market prices of Gotti shares ciuring 20i3 tor.lanualr' 1. September 1 and
Decentber I were P30. Pl6 and P40 re:;pcctiveiy. The service peiioC rs fcr,'tw'i .vea"s beginning
January l" 2013. Wirat antount olccnrpensation expt'nse siioltl,J be recc,gnized ior ZAt3':

9. On January 1.2013"

a.

h.
c.
d
10.

1.200.000
600.000

900.000
i60.000

On January 1. 2011, Sr.iave Companl' ettrl''l;sherl a shate ap;,reciation rights plan for its
executives. It entitlerJ theh to receive g2..rl-, fpr the Ciiferetlc-' beivieen tne mal'ket price of lts
ordinary shares and a pr{-establish*d price of P2.A or: fr0,i}00 rights. Tlre share appreciation
rights are exercisable on Jfnuary 1.2017. Cui'rent rnarket prices ol'tlie shares are P20" P38. P30.
P33 and P28 on.lanuary fi. ZOt3" December.ji. 2018. Decrniher 31. 2til4, l)ecember ii. 20i5
and L)ecember 31.20i5 reispectivel5,. What amount o1'accrireC liahilltl'shouki be recognizedlon
December 31,2014'?

ti
I

s40.000
t,. 270"000

!.

3C0.000
c.

1i. Edgar C'ompany reported shareltoiders' q:qriitl rrn l)i.-r*",):ier -i1. 20 3 whirh comprised the
following capital balances:
Pref-erence share

capital.

12'14 i;urrt,:l;'.!"'g

rnc

Pi00 par.25.000 shares

Ordinary share capital" P50 par" 10C.000 shaiel
hare premium-preference
Share premium-ord inary
Retained earnings
S

!,rIil'tii.',i',,1

2.500.000
5.000.000
500,000
1.000.000
2,100,000

The pref-erence dividends are in arrea,rs fl;r zL01,l:nJ.l01l ;ri.ij lir,: pre :i:-;n"'e s,lar'- has a cali
price and liquidation value,tflPllti arrt1 Pliil. resp.c;i",elv ',r'tr;-i i-r ihe Lrrll,.','rllrie pur ordinarv
share on Decemhcr I l. l0ll'l

u
it.

7(-l.

-i0

i )t)

c. 4.40
d. 75.50
7

12.

On December.ll. 20ii. Vine Compan'., hari 2tr0 0[lr.i or'.rinr,.; ';ha;er rujti' P10 par value and
10.000 49"'0' P1'J0 par value c'rl'llrrIliti;'" i'''-'"'r-''llr:r- cfai{''s 'ji rr ?h'1 r]t "'l't rJilidends were
declared on either the pret-erericc oi o'dinJ:.,, silr.r,:s ,r, ,1-,,' I .l. .':.''ir. r n Iirbrua;"y i0" 2015.
prior to the issuance of the frirancial sialemei-rti i,.;l' r.l-i' ,. r' ,::ilt::i I-:,.:'.::nrber 31, 2014. the
entity declared a i000,,1, stcck spiii ,,i, ir.s orrlin:r.,'shr.t'c:. l';', i'.1;;::11g iul 2.01j and 2014 was
P600.000 and i)720.000 respeclivel,v. ln ,1".,r ;1.r)l i '-'"r,r;-';frl,'"';; +in.rncial staiemenis. what
amount should be reported as basic earnillgs ;)c1' shir.r l) r '' . l, | -r':'

a. 3.40
b. 2.80

c.
d

1.70

140

1-

lJ.

juiy 1,20i3" Jump Corlpany issued at par P2.000"000 7(% convertible bonds' Each Pl'000
converted dr-rring 2013' I'he entirtl
bonc.l is convertible inio i0 ordinary shares. No honcls were

On

income fbr 2013 w',as P600'000

had 200.000 ordinary shares outstanding rluring 2013. The net
as diluted earnings per sh{re
anrl the income tax rate was 30%. what-a:nount should be reported
on December 31.2013'j
l

a.
b.
c.
d.

2.95
3

"09

1.00
3.17

14. Mold Company disclosed the

cash
Acc.ur1ts

year:
ibllorving clranges in the ilccount balances tbr the current

3i:'?99

decrease
199"?99 increa$e

receivable

2'500'000 increalie
170'000 decreie

Inventory
Accour-its payable

i-

in notes lrom a bank and O?t*ll^':t::l:'l

During the year" the entity borrowed
at lear-end' lhere *.utllo
P1.000.000 and itlterest of Pi50.000. Int'.:r;'st cri P75.000 is accrttcd
tradir-rg securltles to tne
accrued interest at the beginrring of thr: ;-ear. T'he owner transf'erred
0t'invelltorl'' The owner also
busir-irss and these were sol<J 1br P650.00u to tlr-rarrce purchase
P2.5/1-)0"000

itrootnc or loss tirr the -"'ear')

made withdrawals oi'1r200.000 in the cument year. \Vhat is the nel

a.
h.

c.

d.

820.000 income
630.000 loss
220.000 income
i70.000 income

I
I

quasi-reorga}tzaI ion
i5.-fhunder Company sustained heavy l0sses flrr several years and unclerwent
on such date:
via recapitalization on December 31,2013. Thc foliowing data are available
Inventory
Equipment

Fair value

Carrying amount

:;"700.000
7"200.000

6.000.000
8.000.000

P1"500;000
The entity reporled share capital P6.0tlr;.ilili-l ',i'iiit a P6 par ,'3lLle. share premir-tnt
\\ihat
iLr,''iount'
origlinal
the
of
I
I
and dellcit P6.200.000. The par ..,a1uc pei :ihale is reduceci to
amount tnust the shareholderi coiLtribulte irr tircir-'r tt; elimitrate thc dctlcit?
l

a.

h
c.
Lt

6.200.000
i,800.000
i "800.000
0

i6, Leno Company reported net income.;l-Pi.41i0.000 tbr the yeai ended Decernber 3 I
net income included depreciation e::pens:.1 c!' P840.000 and gain on sale of eqr
P170.000. The equipment soid hacl histori,:ai cosi of P4.000.0011 and accumulated d
"

of P2.400.000. The following acc.ounts incr'rseir cluring 2013:

Patent

Prepaid rent

Available fbr sale investment

Bonds pay'able

What is the net caslt pror,'iclecl by inl'esting

a.

1"720.000

b. t.320.000
c. 1.220.000

s40.000

lbr 201i'l

17.

Jill Conrpany reported the fbllowing account balances tbr l0l3:

Januaryl I

December 31
s00.000
300.000
800.000

ACcounts paYable

Inventory
Accounts receivable
Prepaid expenses

*
*
*

6so.ol)o
2s0.000
eo0.0p0
600.0P0
I

400"000

purchases of inventory were on fll':orlnt'

Depreciation expense of P900,000 rva.; recognized Curing 20i 3.
Equipment was iold tluring 2013 ar;C a gain of P300"000 was rer:ognized.

All

I
I

T'he entity provided the

following casir []ow inforniation for 2013:

l
l

e,s00.q00
4.1
00.0001
t

Cash collected from customers

(-'ash paid

tbr inl'entory

L-L-4!0$!0

Cash paid fbr other expenses

Cash flow trom operations

1.000.u00
=:7=:
I

What was the net income flor 2013'7

a. 3.i00.000
b, 3"400.000

c.

d.

3 00t).000

3.e00.000

18. Ross Contpany reported the fotlowing,r-iachiner..v on December 31- 2013

Year purchased

Percent depreciated

201 I

30

2At2

20

l0 ti

10

lndex number

Cost
6.000.000
4.000.000
2.000.000

100

r25
300

ciepreciation is taken lll the .ve urliur

Depreciation is calculated at 100'b per " ..:'rt" A flrll .vear
'
'l'here
\vere ilo disposals in 20r3. \\1,hat
acqr-risition and no clepreciation in the ltai ni' i;i:;p,-rsiil.
amount oi'clepreciation is incltrded in the ,riil iiy perinflation incorne statement?

a. 2.960.000
b. 3"600.000

. 4.860"000
d. 1.200.000

i
I

I9. OnJanuapr, 1,2013, Fear Company pulchased 100.000 units at P120 per unit and sold 60.qoo
31, 201 $ is
unit:; at P200 per unit during the -l,ear, Tire current cost ol inveirtcry on f)ecember
P6.000.000. What is the gloss prrolit in i013 utl.iet'current cost airrrotlnting?
I

a.

3.900.000

b,. i.000.000

c.
c.

4.800.000
2.. r00.000

2i). Pack (iompany purchasecl equiprnt-'nl i,rr [)2.]L)0.000 on.lanu;rr}'1.2013. On Decemberl3l'

2013. the entity, reported realiz-ecl hotoing gair of P20.000 in the 2013 c'urrent cost.':tqf'
statenletlt. T'he equipmeni hacl a usefi,rl litt ,:i' 1 l ears and was ciepreciated using straight line
methsd. What is lhe current cost of the e,litiprrri(.lll oo l)ecember

a, 2.400.000
b. 2,500.000

c. 2,000.000
d. 1.840.000

3l' 201-1?

2i. On.lanuary 1, 2013. AceiCompany leased a t,rr,lding fiont a lessor ur:.,r-ti" a. l,'-vear operating
Iease. J'he lease paymellts are tc be paid a'i.he beginning:.;i'each n:.onth e:rd r"iil ir;crease e\lery
year. 1'he monrhll rentals are P300,000 fbr 201i, p400.(i00 r'oL 2014. P5{"l0,0trc tbr 2015. and
P600.000 for 2016. All palments were made r,;hen Cue. On L)t;e:mb':r i1 .2A14, rvhat amount of
accrue,l iia'rilitl l6p rhis operatirig lea:;e shorild l;e rrrll"ted nr rh,'i.:s: I
?

i).

2.400.000

b.2,100,000

c. 1.800.000
d.0
i,
22. Step Conrpany reported th,e tolloli,ingr iirfi.rliitatic,i r'clat;ng io liabilities

or December 3i.2011:

Accounts payable tbr goofs and services pur'chased on open accoilni atnlunted ro P600.000 and
accrrred expenses totalcil PSOO.OOO on Decenber .11. 201i.
I

On July l" 2013. the entijty issueri t"5.000.0010.8%r:hor:ds fbr P4.400.C0() to yield 109/o. fhe
bonOs nrature onJune 30.2018. and pay interr:sl annilaliv r\/ei\/ jLrne.lf). (Jrr December 31.
2Llil. the bonds were trading in the open maiket at 86 to lreld i296,'Ihe etiective interest
method is used to amortize bond discounr.
The pretax financial income for 2013 wa.s P10,500,000 and tlte lax;ble income was P9,000"000.
The diff'erence is clue to P1.000.000 perrnaneni dift-erenc'.: a;"rcl P500.000 temporari/ diflbrence
urhich is expected to reverse in 2014. The entitl,'i:; sub-jeci fi.r thr-'iitcutrie ta>; ri'.te of i0% and
made estimated income tax llai,ments Curicg the t'ear oi':'t.0U0.l.rriC. V'/hat aniount of current
iiahiii,ies shoul, j be repo;tr:d crn Dece ;rber . 1. .-0 r i .l

e.
b.

2.800"00t)

c.

4"000.000

3"0c)0.000

c. 3.1 50.000

2i. Look C'ompany

had the

tilllowing cash biriances rn lJec,:nt'0i:r

3i,ll.ril:

Undeposited coin and curfency

Unrestricted demand depiSsit
Company' cirecks written tind deducted fnrm rhe .-ie,rantJ il31,i-'5i1
anlount but not scheduled to be mailed irntii .lanuary i::.,lili,t
Time deposit restricted for use in 201r1
Commercial papers

100.000
?1.500.000

300.000
i.000.000
I "500,000

In exchange for a guaranteed jine cf creCit. tht'eniitl'l-ras:y-:'',:s.i rc t;iair,i,r,il; ir lt-iinimun baiance

of P200.000 in its unrestricted ciemanci depcsrt *ccourrl. \"f ir:i ,i:r,.,trni sL;oulrj be reported as
"L'aslr" orr December 3 ]. 2013?

a.

b
c.

d.

1.900.000
r.700.000
4"2100.000

3.e00.000

24. On .lattuary 1, 201i" F{ate Cuutpani, issu.:ci I-ir"i)0().(.,i-:t' ,

1:r}i-!i. a,' ,',:-1 li-ich are due on
December 31.2017. Each P1.000 bond w:s issr.il',t ,r,il1-. .'ir:i.':; f4,'rirl.'.:!.r{t: shar,., wrrants. each
of whicli entitled the bonclholder to purctrasc onr: ,rh:rr.: 1..: ) ' '\,rl Ir 1 ,rt ',ffltri.:, On January 1.
2013. the market value of each v/arrant is P4. lirc sta.rtl ir,re;,-rs1 c:r l!': h,onCs is payable
ai:nuall1,,e\,ery December 3t. The pie,.zailing. rnaritet r.'r. (rf iirrl.est l:'t il-re bonds wlthout
r''arrants is 12o/o. The PV r,'rf 1 at 12% loi 5 trreria,-ls ls,i -i''. irr'r;l ilt: i:'l'c I :,tt ,.:,rdinary annuity of
i at 12ok for 5 periods is 3.60. \\/hat amrrrnt oj'tii [,i',rct]:ii: irri-;t ti,,. i,rilrrl issue shor:ld be
recognized as increase in equit.,,?

a.

640.000

r; 960.000
c 560.000
d.0

' reported encling inventrrlo on L)e':'enrber 3 1' 20 i3 at P4'000'000'

25. Gentle Company countediand
physicai rl:o''tfitl
None of the foilowing itenrs u,eli" inclr-rcied in the
300'000
Decemhtr i 1, 29i 3 . .
Goods shipped out on conlsignment and i"rnsold orr
^.
400'q00
tbil a.rtirr,ion *"*r, ii,. lran,sil 'n Decrn:l.ie r -l i . 201 3
Goods sold and fi;r"
Goods purchased uld i shipped
Decet.ttber 31. 201

3 ,l

eon

pol"r

supp;'1* i

i\"er:e

in

lrar'sit

on

ooo.too
800'p00

"holij 1i-,1 slr!1;p,ilr., it,;irrtction'"

Goods in the riripp,ng,l.partment markec
l-''ll of
iatiua;--r 15"lJl1 l''irt rnt:
Goods iurported and received iiom broLer on
bt 1!'c brl;i; a1.l ihe trllst
lacling and other import docunlenl-s v.rere ii;ii','ered
1.000.p00
]:0. .]
r.eceipt accepted b-l thc elttitl ori lJ*Celtll..l-.i ],ij.
I
i

$/hat is the correct armor-rirt of

inventorv?
r

a. 100"000
7^

b.

00.000
c. 6.800.000
,"i. 6.i00.000
6.1

l
l

fr,r sale" in','estmenls withi the

""'r'rsiiabr-''
26. On Januaiy 1. 2013, Glow Comnanl' lcqrrirerl
fbllou'ing n-iarket value otr Dec:mber 3 t ' ZCi -i:

h''l

f,lerst

i.7cc.000

i-i.{iilti.-i[i

B
c ;

erl<et Value
1..80u.000

4"0'10'C{;l-'

5.,500.000

5"'000.00f

tor i,b.C,,:0.000',r'hite the remaining

The entity sold Sectrrihy' A on l)ec':tnhr:: iir" 1[ti'1
rritr-1') r'1 f'5"100.tr00 tbr Secr-rritY B and
inrrestments on Dece(Lrer 31. 2014 haii mar'l<et
be recognized in
p5.700.000 for Securit! c. wr,ut cuinuliiti.,,e anioiini (,1-i.il,r'rrr riz'',-l gai'i srouid
I

the statement of char"rgeis in equiry on ileceiv'ber 'i

i'

'i(-i:'i':

a. 1.600"000
h. r.300.000

c 1.800.000
d. 500.000

it)0'1100''rtritsrlirawmaterial inits
2T.SlipCompanyhasestimateci thatitrvoulda'rpr0x;lllirtl;i'vr'isr
i-'[1i1,;1-1i25 :ii'?Soil' L)ti Arrgust 1' 2013' the
manufacturing operations tr: rneet the.leinancl ltrr the
rtraierial otr Dei:eml'rer 1' 2013 at a
entity purchasecl a cali optiorl to Ouy iOO.OnU'],]i1.: oi,iar"
rrrttioll dc:;ignaterl a-' a cash flow
price r-rf pl()(r pq:r rrnit. lhe entitl' pulO .ial ir-rQ f;rr tlrr: i'aii
Tir t:!arKf''. price of the rau
hedge agai,si price tluctuat,on f'oi the L):ccl:hei' nu cl'r'.Se
jii:ij.'i-:ri]er:j1"
20i3' what amout]t
pizo p.;rl,.i,1i1,:,,ro lir i[ 3'r
material on December r.201r is
of cash was collected b,r''-:.rei'cising Lh: t-"r1l "11t'ir;i''

a. 2.000.000
b. 1.950.000
c. 1.000.000
d.0
h'r -10''100 :;hares of'Croc C]ompany
28. On Jar-ruary 1, 2013, Snap Cornpany pai'J I'3 il0L) 0',)l
Ther purchase price is equal to
which represents a 15oh inierest in the net essits or'ihrr: inr.:i.':i.
l:o'ir;: ci Jiiectt-'rs is tepresented in Croc's
the carrying amoLlnt of the net assets acquirecl' Snap"s
influence o"'er the investee'
board of directors which gives it ttre af-riiity io exircis,: ;riin,flr::'nt
c itr 2013' The investee
The entity reoeived a dividend of'P1: per shal'e fit"]t i.r.,': ';'"cs'
i;i 2013' \\:hat amount
rep.rted net income of P8,000.000 arici rir\-aluaiion srir[.']rir c1'r'}1.500"1r)f
'\/(
r'-lrii,prt)': 1ir, iit,,: ?ii rrlldeLl i)':ci:nrbct' -l1' 20i 3?
should he repr-.,rted as investrnent in croc

a. ,{.125.000
b, 3.750"000

c. 4.200.000
d.

3.000.000

r 46v

29. Blame Company provided the fbllowing infbrmatioh for the current year:
6.000"000
500.000
600"000
2"000.000
100.000

Net inconre
Unrealized loss on FVTOC'l investments
Translation reserve credit
Revalr-ration reserve
Accumulated profits adj ustntent - dehit
Appropriation reserve
Cain on sale of treasLrry shares

100.000
Li0.000

What amount of comprehensive incoine ci:ould be reporled fbr the cnrrent year?

a. 8.200.000
b. 8.i00,000
c. 8.100.000
d. 6.000.000
I

30. Nia Company reported the

tbllowing account halances on December 31. 2013

i

15,000.00i)l

Land

l]0.000.00( )j

Building
Accumulated deprc-c iation

"+0.000"00t ;1

Propertl'. plant. and equipmeni irave bcen car,"ier1 Lrsing tire cost r-rrodci since acquisition. l'he
land was acquired 15 years ago while the building's constructrou was cclmpleted on.lanuary 1.
2004. The straight lirre method tbr clepr,.eciaiion i-s rised. The total life of the building is 30
years. On January 1.2014" the entity adoirtecl ti-re revriluation model. It was determined that the
lanc'l's cLrrrent tair r,'alue is P25.00'l.C(,);1 i:n;i the hr,ildinpl"s curent replacement costl is
P150"000-000 on such daie. What is the rer;alr.r:rt:i.,ii iLrii'lrrs c,n Decenrber 31. 2014?
i

iL 2e.000.u00

b. 30.000.000

c. 28.s00.000

d ic),500,000

3i. Ori.laltuarl' 1.2tJii. ihc,-'it., go,ucninrelti

pr-oi,ided Swerte Contpiitrt tr Z0ro intel'est. P6.000.pU0

ioan rvith a 4-1,ear term. The prevailin., r:i;ir!..'L rzlt.: til intele.sr fbr this t1'pe of loari is 8%. \\]'hat
is inclLrdecl in the entries ou Dece nrb,:,, i 1. 101-1'.' iRr-runci present value t-actor to tl]rree

decimals.)

a. Debit interest expense P352.800

b, Clredit inconie lionr granr Pi-51.6,;0
c. C'reciit income fi'onr granl Pi8i.02-t
d. ('redit interest expense Pi81^024

i
I

32. Rainy Company provided the fbllowing infi:r'rnatioir on December

Accounts receivable
Property, plant and equipment
Estimated warranty liability
Deposits received in advanc-'e

3 1 , 201 3:

Carrying amount

Tax ba

3.000.000
6.500.000
1,600.000
r.400.000

3.500.0
5.000.00

The rjc'preciation rates fbr accounting a:rd tarlition are 15% and 250,,'o respectileiy. I'he
are tax;rble when reccivr:d and'*arranty costs are.ieductible when paid. An allow
doubtfirl debts of P500.000 has been raised against accoLrnts receivable fbr accounting
but such debts are deductible only wirr:n rvt'ittertr off as uncollectible. The tax rate is 30%.
amount should be reported as deferred tax- asset on December 31. ')013?

a.
b.
c.
d.

I.500.000
i.050"000
900.000
630"000

rsits

fbr
hat

,l

ti

JJ.

On Japuary l. 2013. Rgwan Companl, acquired ali thc ?:,:i3r: 'rr:d tiabilities o1'atrother entity'.
The acquiree has a nunrbell of opere.ting divisicns" ln.,:liid,llg .,re whlse trtaior industry.is the
manuflacture of toy, train. iThe toy train division is jrr'gaicied as a c'lsh !.liirr:rii,''n
-l unit. On
were:
divi:;ion
toy
train
December 31.2014. the calrying
1'-il arnounts o1'the asset$ of the
I

Building

Invenrory
)

Trademark
I ractemark
Goodwilr

'

I'

'

ir

I
ii

il

i000.000
i999.999
i'ooo'ooo
r.iioo.ooo

ir

Ii

ll
li

There is a declining interest in toy train because ol'thg aggressive illarkeling of c.rlnputer-based
tJrl
il,::* of the_tti1' train clivision pn
,'-1 valrre
ffit'fl:rure,j
,r!\(.
urL,
l\uYYglI
\-wIIllrq,IJ
Management ul
of Rowian
Compa:ry'
toys.
tLrJ). lYralrr4E\.lrrLttt
'
,,'1rrltl.q5
cosi oi disr:t,sal .,,f inv'ltil,'rr is greatet'
Decenrber 31, 201 1 at P7,;200.1f00. I-lii. i,rir
than carrying amount What is ihe iili--)ail'mr'Ft loss to be alloc tecl tr; the I uilciing'/

a. 2"800.000
b. 1.000.000

c.
d.

1,500.000

2.000.000

34. Grumpy Company prepared the fbilowing reconciltaiion of bank acccunt on \{a1' 31.2413:
5.000,000
60o.o0p
200.000)
.s.400.000

Balanle per barrk statenleill

Deposits in transit
Checks

outstanding

Correct cash balance

4.700,000
550.000
r60.000

Balance per book

Customer"s note collected by bank

Interest on deposits
Bank service charge
Correct cash balance

10.000

5.4()0.0u0

The proper adjusting entries were made tbr thr r:ttrec.-'rc{, J iran:.ri'ti,rns ir: IMaS'. l'.ll recorrciling
iterns in May cleared the bank iri .luii,: AJditjr:rri data in .ir,; l-,-iirt:ii: rrl J''ilti- dfc .ii: i'oiloi,vs:

Book

Bank
Deposits recorded
C'hecks and charges recorded
Balance per bank statement

2,50{).0[i;
1.-15U"1;!r)

5. i 50.r.i;(.t

i)',,t^,.,. .. I : fl.l ^,;'C-1efi

Ch::;i:; r'eccr,-ied
Bal a,rc'e p,i::' cCg,:i
I

2,700.000
i "900,000
6.200.000

The deposits reccrdecl by the bank for the :nc,rr!r ,;l j.;-r,-' il',;iLi:1e,,1 t,cliection of a note for
.^lir,.tlr rl .rrt;'i.j , iclrrdecj a P-50,000 NSF
P400"0t)0 and interest of P20.00{j. and clraiqes ai. t'ie
cl-reck fiom a customer. What amount w'as rt:pr,;f :.1 :-l , t ., .-. rr,-, ,1 .1.;,.,,ii Oi .ir.ine 30,2013?

a.
b.
c,
d.

1.220.000
800.000

200.000
620.000

35. Petronas Company. a gasoline compan),'" partii:iJ,a:rs it-: l.:, ,. si. ir::, 1,J.' '.1tv program olShoe
Company. Petronas grants program memL,ers one point ir-'; r,i';r; Pirit0 spent on gasoline
products. Such members can recleem points ibr:i:r.e ptlri'.;ts,,,, i)?iron;is pa'ls Shoe P70 per:
point. During 2013. Petronas sold gasolirre pr,,r:r,.icl: ',,'c,'1I-i l'i0 000.00C aild granted the
corresponding points. The lair value of each point is Pi,,,). ll i:',rironas r. acting as agent of
Shoe. wliat amount of revenue liom the points shoulS be t:e'::i:.i,i,':,1 in 20i3?

a.

1.000.000
r,400.000
1.600.000

b.
c.
d.0

36. Myra Ciompany provided the

fbiiowing accoullt balances orl Decemtrer

Cash

Accounts receivable, net

Cost in excess of billings on long-term contracts
Biliings in excess of cost on long-term cc>ntracts
Prepaid taxes
Propert;-. plant, and equipment' ne1
Note pa1'able - noncurrent
Share capital
Share premium
Retai ned earnings unappropriated
Retained eamings restricted fbr note payabl.'
Eamings f'ronr Iong-tern"] colltracts
Costs and expenses

3 1" 201 3:

600.000
l.5oo,o0o
1.600.o0o
700.000
I

4so.0p0

i.5l0.o{lo
1.620.t1p0

750.000
2.0.10,000
9U0.(iu0
160.0i)0
6.680.000
5.180.0i00

The eptity used the percentage of ccnipletion methoci to a.ccount for long-term constructiion
contracts {re
contracts fbr frnancial statement and income tax purpose.;. All le ceiYabies on these
payments
tax
lof
estimated
2013.
cor-rsitlered to be collectible rvithin 1j rro:rrri.. During
'l-lie
fhfre
expe'nse
p450.000 were charged tr-r prepaid taxe:..
enritl has not rec-ordecl income tax
i.eutporar,\
.I, p.rrriunii,'. <Jilf':rellces. The tilv. rate is 30%' On December 31" 2013' what
werc rr0
antoutti sirould be reported ais itrisi I'lr''ent assets'

a.

5"000.000

1). 4.100"000

c. 5.700.000
d 6.21.5.000

i
i

l^.-

P'150'0 ,pu.
37. Lruring the current y'ear. Kate Compa,r;r renoried in;rease in rav'' materials inventory
raw materitrals
decrease irr goods in pro..r, P200,0r')0. i..r*u,,.,n tinished goods P350-000'
frei Urt
pr-rrchased p4.:OO.OOO. direct labor incurLed Pi,000.000. factory overhead P3.000.000'
Lr
II ig
lbr
gocds
sold
1if
6s1 p"f-iC}.$00. and fieiglit in P250.{.r00. \:1lLlt.}rr,1()L!ilt \\ias repOrteci as cost
I

current )'ear.
a.
b.
C.
i1

jE

e.700.000
9.250"000
9"550.000
9,9s0.000

Claire Company has three reportable seg,me:r1s. The entity sales aggregatecl P30"OOOOCq;115
were P7'000.90U1::j
currL,nt vear. of which Segment One contribLrted 4t)aro. Traceable costs
entity
Segmenr Llne out oi' a total oi P20.00C.000 for the entitli as a whole. The
'if":ff:!
costb 10
common
betbre
il'].ofite
il(ltrrnon costs of P6.000.000 basecl i,r', the ratio cf 11 scglllcnl'.s
lbr
Segn{ent
L'lrvr L common co-{ i. i.!'hiit ttnount shoLti'J be repofied as prtlfit
rt'vrrr! befbre
the total inconre
ong']
I

a. s.000.000
b. 4.000.000

c 2.600.000
,j. 2.000.000

i9.

h,,lelissa Company reported allowance tbr doulrtf i-tl accounts ai the beginning and end 9t,cu$e;r1
year ol p4.500.0b0 and P5.000"000. respecrir,rilo. Dr-rring the year" the entit5r reported doulttul
What amtunt
accoLults expense of P800.000 ancl rec,,i'e,:ies o1'a.r:counts written ofi'ol P50.000'
accounts'/l
unccllectible
w,as debited to the appropriale dccour,t in fh: c,rrrerlt year to r',i"iteoff

i00.000
b 500.000
c, 800.000
d, 3s0,000

a.

I
I

40. Budoy Company reported the toli,:v,'inii

Patent and

I-ong-tem

-1(l0"il{if
"ii00.00t)
c.(ill'1.000

Bori<!s ilcli r:bie

2.000.000
5.000.000
100.000
600.000

rrademark

nrl i(.':it Ir.i)'abl e

irrriri!rxr cr binCs

I-;*,

In a livperinflationary econt;nri. r,,,haI irntC''rr.lrtt ShOrrlcj be rel()ft

1.150.000

b,.

c.
d.

.1

paya"bie

ei-rr:d i'evilii;.re

;0i).00L
4.ii00.000
r. i s0.00c

lf

Long-ternr receivables
LIeld fbr collection investnrents

year-end:

2"500,000
:r

;i

a"t

1.500,000
300.000

4tl,$.i,r0C)

Accuunts receivable
Allowance for doubtful accounts

liarilities

z\.cccr.:nis pa1'ahie
Accruecj (rr)" pi. ir si :-i

.r'itC.,)ii{l

Cash
T-raciing clebt invpstments

Inventory
Equipment

a.ssets and

- -

-9-

er.i I't:.

Iiei

rllililtArl

.'--''e'"S')

50.000

250.000

8s0,000

41. From inception of operations in 2ACr. Air:>lis ( cnlpar,',' ,,rairii:il no '11i1)wanc;: fbr doubtful
accounts. Uncollectible accor-rnts ,,\cie ,lxi'it-r.:c.i ;-s r.t'iil.l ,r,i o I ril:,r I:ecr'\'i'rria.s \r,,'erFj cledited to
income as coliected. On 5{ar.:it 1.2r11-1 rrfter iit,:2(}12 isna';':tal qtat;;rfftetli-! i^iere tis'"t.-'.'1, a poiicy
'',vas established to maintain an allou,;:lice tir d,::r-;btful accolrnts'D:1,:d oi, l-i::;i,,;iical b;t,i debt loss
percentage appliecl to year-en.1 acccuirts re:r.i.:l,le.'i-he 1:isllrrcatl ,bad dri:t l'lss pei"centage is to
Lle reconrplrted each year based ort iillili'ai ll:';ie i'asi:icttrs t':'t'-) a ili'iximLlnl ct'iive -/ears'

Credit

Year
2009
2010

1.500.t)0i)
2.250"0{)0

201

2.950,i10()

20t2

-i

2013

1,., r

s:ales

15.000

i8.c00
:;:.000

2.700
2.500
4.800
5.000

;,;.10U

4.000"00i.

I'he entity reported accounts rec-"ivable oi'i'-'''00u'r)0{) :ti'':

a,

Recoveries

r-q.L,d

"100"t)0(i

and Deceniber 3i, 20 13. re:;ooci;r'r,jy. r#iref anr.;r.ini

accouilts on December 3l 20i,1?

iteoffs

s:hc,rii

i';

(;l-tul l)[ri-]

''i'r D:ci:mber

[,q Lirtr-iir-'C :';': :,::i'.;";vlna,'

ilr

li'

2012

tior.rbthr]

.12.00U

sr"000
48.000

c.
d. 34"000

42. On Dece,rber ll.:t)13. ]:r: (..,itr,,,1 . _<oij ,i ,rr :r ,.i:1. ,,1

requiring payment of P1.500.i;CJ irnnualrl' tr.., i;,,- v;.',i'r , lr.
201.1 and the prerailing latr' Jt iii.,'i'u:. 1. . Lr'. :' ,'. ,,i . r i
Present value of 1 at lAolo fix 5 per:;r.ils
Preselrt value of an orclinary annu.ity,ol'I

On iJecernber

3i.201i.

rvhait

,i:i :ntrri:esl-bearing note

'r r: mi:nt rs <]ue Decr:mber 31,
ic' r.,f issuitri,-c is 1070.
.-

,' .-.i

.,

'-'
,.-.

0,62
3.79

;t

ltrl.i il-'r- l0 ut:i '1,

is the carry'ing.It(Jurt,rr ri:.',-r,rq'

ic ccivabit:?

e. 5"685"00ii
b. 4.6s0.000

c. 6.000.000
d. 7.500.c00
43. Marie Company. a ciistributor oi machineiy. ccugi-rt r r-r;:-);;nr. fi'om th; manttt-acturer in
November 20i3 fbr P2,000,0(10. Cn [)ectrirbei iC, ';i i.1. r;rr' .,ntit) :oiil lhis machine fbr
P3,000.000 under the follora,illg terms: 2?,, Cis,:,-,i;nt if pald rr,,tli' thir"ir i;at's. 17c Ciscount if
if not paid
paid after thirty days but within sixtl; da1,s. or pa\/aL,;e ;r: i'ili ',,'i..,1in rin.'t)'
"ia;.'s
within the discount periods. However. the bu,,*. ll"r-l tl,r .:rli: tl ,,:turr ilr"; machine if it was
unable to resell tl-re machine Lrefbre erpiralon i;l'ihi'nir. ,' , ,) ,-'., ilt'r 1,r)ri,.),J. in which case
the bLrlcr's obiigation wc-illcj be canc.:iccJ. iir illr: rict , 1- i . )'e. -iricci December 31,
2013. \vhat amount should be includeiJ f'rrr 15r':::li i)'ll i:,i.,:rr i i;-,'.;

a.3.000.000

t,.

1,940.000

c. 2"970.000
d.0

The
44. Harlene Company used the average cosx rerail inr,entory method to account fbr inventory.
the
year:
current
following infbrmation related to operations ibr
I

Cost

Retail
I

6"000.0t)0

Beginning inventory and purchases

Net markups
Net markdowns

e.l0o"0p0
400.0(lo
6oo.of o
7.800.000
300"000

Sales

Shoplifiing losses ancl nornta.l qncnrye

What amor"rnt should be reported aS cosi rr'' sales ;'rrr the current year?

a.

c.

4.800.000
5.100.000
5.200.000
i.400.000

th-qse
4-5.Jenny Company purchased bonds ar a Ciscor-ini of P500.000. Subsequently.,the,entity sold
long-term
boncls at a premium ol p700.000. Durin_{ th: ptriorJ ihat the entity held this
investrlent. anlorti2ration of t[e .1i.-scoi..ri ,rtpiritilied to Pi00.{.]0(). \\/l-rat amount should be
reported as gain on the sale oi'Lrortds?

i1.

.100"000

h.

r.200.000

d.

800.000

c. 1.300.000

ln the curr{nt
year. the entity prirchased a new rr,achrne aud rearrangecl the assembly line to install tlhis
macirine.'fhe rearrarrgenreni.lrd not ilc.ease the esti:iaied usetul lif-e of the assembil'line. tl'ut
"i-he iblloiving exne;tditr-rres rvere incurled
it did result in signitiintly more efl-rcr,rnr pr,,Juciior,.
irr connection witir this project,

46. Everdeen Company installed a production a-s:;emirly iine to manufacture fumiture'

I
I

Machire

Labor to install machine

Parts acided in rearrauging the assembl' line
Labor and overhea,i to ,eamarrge tl-re as.renrhli'
1,1,'hat

Ir.

3"ooo'o0o
600'0i00
1'5C0'0P0

iiil.:

900'0100

total alnoullt of tlie erpenclitr"rres siloirlii hr: cnpltalized?

6.100.000

b. 3.600.000
c. 2.500.000
d. 3"000.000

47. Connie Company incumed the fbllowing cosl.s clr"rring the cun't:tit I ear:

I)esign of tools, jigs. molds and dies inv6l';i':g ;i;'; techno[rgi'

Nlodiflcation of the formulation of a proce,;:;
Tror-rbie-shooting l n ccrnnecticn with b reoi<downs during comnterc ial produrction
Ad"anta,tioi-r c-,f arr existing capabiiity lc a particular cu:ltonlcr^s need as part of a
continuing commercial activity
Vi hat antount should be reported as researcli anij tl,:"''e

a.
ir.

d.

2.500.000
i"100"000
4.700.000
s.700.000

2.500. q00
3,200. 0100
2.000. oloo

luo

loplnent e.{pense lor the current year?

I

f4tss I'

;i8. Lynaira Company acquired rights to I patent under a licensing agreement that required an
uduun.. royalty [a;,'ment r..,'hen tl-ie agrt'enrerit'.,\i-ls signed, The entitY renritted ro1'alties earned
.,r:ar. r\dditionalil. on thc same date. the entity
ancl due underthe agreement on October'31 elri:ii
paid. in advance. estimatecj rovalties t'cr the r.iext ,vear. The entity adJusted prepaid royalties at
year-end. No reversing enrries are macie. l'ire entitv provided the lbilowing information for the
year ended Decemlrer 3 1 , 201 3:

i/

l0/-11

l2l3l

Prepaid roi,alties

2.600.000

Ro)'aliy pavnteitt "l.aiged io:cvalty ellpens{'

Year-end credit ad.justment to ::xpense

4.'100.C,00

On December

31.20ii.

1.000r,Ct00

what amount shouid be reported as prepaid royalties?

a 1.000.000
b. r.600"000
c. 3.400.000
d.

3.600.000

on
49. Christipe Company, had a balance of P4,100.[i00 in the prot-essionai l.ees expense account
December jl.20t j. betbre considering y'r-'-.i'-dr"i,-rai1.i';stnrents relating to the fbllowing:

The
C'onsultants were hired tbr a special projcct at e total fbe not to exceed P3"25C)"0U0
entity had recorded p2"750.0t10 of tnislki: orseil on Lrillings lnrwc-rrk perl'orn-red in 2013.

fhe attorney's letter requested by tht ar-:di'ors dateC Januarl 31.20i4 indicated that legal
2011.
t'ees of P300.000 *... bill.d rrn.iu,,.,or;., i5 1014 fbr work perfbn'ned in Novenrber
:r:rd irnhille<1 f-ees tbr Decernbe| j I . ,lU i -i tlt'tl':d P400,000'

What am6unt should be reporleci as p:'r,fi:s::ronal

a.
b,
c.

t'e1rs expensre

tbr 2013?

5.300.000
+.800.000
4.400.000
4" i 00.000

50. Duripg 2014. iVlonica Corlpanl,disco,,ereil thzii thi- eirding inventories reported in the tlnancial
statements rvere inc,:L'rect Lr','the tbllcrri,;1 J;1n"''r' rrtr'

i,000.000 understated
2.500.000 overstated

2012
201 3

The entity used the perioclic inventorl :)'sieir; 1,.r ascertain y'ear-end quantities that are converted
to peso amounts using IrlF{-) Prior t.i ln\,ilil"jii,,ti"nents tbr tliese errors and ignorirtg income tax.
what was the effect on retained earning-r cli ']ilIrtIaI'y l' 2tll4?

a.

3.500.000 overstated

b. 1.5{)0^000 overstated
c. .i.5(10.000 0\,erstiticr;

c.0

Ii

Fi f,)

CPA REVIE\Y SCHOOT- OF THE PHILIPPINL,s

Manila

Final Preboard Examination Practical Accounting

i. Date

lnterest

Payment

VALIX SIY VALIX

PrinciPal

Carrying amount
-s.280.000

U1113

FERRER

V1l13

900"000

1fi114
I t1115

900.000
900.000

720"000

360"000

4,3 80,000

+:g,ooo ??l3tt
"800

391

60"000

3.91 8,000

3.409,800

508.200

300.000
8.960.000

Carrying amount (tl.000.000 + 960.000)

Consideration transfbrred
Note receivable
cA (2,600,000-- AD 600.000)
Gain fionl extinqLrishment

6.000.000

2,!!0.000

18.000.000)

960.000

2.200"000 t40.000x55)

1.

Taxable income (6.750.000 r- 1.200.000

Current tax expense (5.700.000 x i0%)
Estimated tax payment
Incorre tar pay'able

-5.

6.

- .500.000
1

(
1#5-000

o-v*ee

bene

flt

?=g@=900

ex Pense

Remeasuremerri g.airr orr plan asset ( l-5t)0.000

Decrease in PBC

Remeasurenlent gain

- I '000'000)

500.000
400.000
q0( .000

- OCI

j.s00.000

Contribr"rtion

Defined benefit cost (2.800.000

Prepaid
Accrued benefit cost
Accrued benefit cost

7.

2,s00.000
i.300,000
( 1.000"0!Q)

Currt,nt service cost

Interest expense ( 13.000,000 x 10%)
lnterest income (1 C.000 x 10%)
llnr pl

5,700.000
I .710.000
3 7 s.000)

750.000)

-l

11113

12131

tl0,000.000

i3

1.900.000)
1.600,000
(3.000.000)

900-000)
13,000'000)

Declaration on 911 512}fi (36.000 x 28)

Renreasurement on December 3 i. 2013 (36.00C x 3)
Gaiir on distribution (900,000 - (-16c.0c0 x i6140))
Net decrease in retained earnings

il3@01
(r

"008.000)
i 08,000
576.000

(324.000)

1.800.000 / 2

10. (30
1

D
D

8.u

-- 20)

=,=

'1110"000

x 6c.000

:.t

214

= 300,000

i. T'otal shareiiolder's

eqrlilv
Iess: pre [erelrcr' ecluitr
Pa;'

25.000)

[-iq. prem ilO x

Pref.div. ((2.500,000 ,-' 12o/o x 2) + (2,500'000 x 4a/o))
Ordiriar,. l:q.r,ty

BV per oiciir-rary share (7.650.000 / 100.000)

1.1

00.000

2,500,000
250,C00

lA0-.4!0 0.11QJ09)
7.650.000

16.50

Page

12. 2013 EPS (560.000 / (200.000 x 2)) =, r.40

i

13,

Basic EPS (600,000 i 200,000) = 3.00

Net income
Interest on bonds" net of tax (7% v.2.000.000 x 6,12 x
Adiusted net income

b00,000 c
49.000

709 o)

q49$0
200,000

.lanuary I
.luly I (2.000 x l0 x 6/12)
Average shares

ra,!!a
l10.000

1!9

Diluted EPS (649,00A I 210.000)

'fhis is antidilutive because it is hi5;her th;n l;asic F.;'S. -l'hu,;- ,he d,ii.iteti EP: is the sante
the basic EPS.
820.000
ib50.c0c)

14. Net increase in equity

Investnrer:t by owner
Drau irtgs b1 owner'
n\et income
15.

16.

.r0!jqa

l&gqa

Total deficir (6,200,000 I 300.000 - 800.000)

Share premium bef-ore contriLrurtion ( i .500.00i)
Contri buti on by' sliarel-iolders

(5.000.0u(i

r li:))

7.-100,000

(.:-fqoOAO
1.80c.000

CA of'equip (4.000.000 - 2.40C.000)

r.600.000

Gain on sale

__i_za.q0l
1.770"000

Proceeds

Patent

AFS
Net cash providecl by investing activiies

4s0"000)

I_

t_u1l-Qoe

1.220.000

17. 3.300,000

18. 6.000.000 x 10%o: 600.000 x 300 / lrl0

4"000.000 x 10%: 400"000 x 300 I 125
2,000.000 x lAa/o = 200"000 x 300 i -rUfl

Depleciation

19.

= i.8t,{l.00i;
=. 96(,.U,.)U
-- _l!\,-i)!L''

Current cost per r-rnit (6.000"000 / 40.000)

Average current cost per Lrnit ((120 + 150) /
Saies (60.000 x 200)
C'OS (60.000 x 135)

Gross profit

20. Depreciation - average curent cost

Depreciation - histcrical cost
Realized holding gain

_l=.':till,t&l
150

1-i:5

12.0J0.000
LLr-L!0,-0_00-)

l=q!gg@
,18i"000
u-60."q.0l)
14, i)(,0

--=+ti-

Average current cost (480,000 x 5)

11.4()0.00c

TotaI amount
Purchase price
C"'un'ent cost - 12131131

[io&

\,

i -,
L=

)oo

l,)0 0t')(rt
::.:.f--:1

=.,=$!lJq-__Q

as

Page 3

s,400.000

21, Rent expense (21.600,000 i 4)

x2

10.800,000

Total rent expense fbr 201 3 & 2014

less: payment in 20 l3 &. 2014 (3,600.000 + 4^800.000)
Rent payable
11

(8.400.000)
2.400.000

12131114

.t\

600.000
s00.000
200,000
1.700.000
1.000.000

Acc0unts payable
Accrued expense
Interest payable (5.000.000 x 804 x 6,1i2)
Inconre iax payable (9.000.000 x30o/n = 2'700^000 1.000'000)
Total current liabilities

23.2.900.000
96C"000

21.

25.

1.'i

00.000

26 10.800.000
27

. (120

28.

- 9.000"000 :

100)

"800.000

100"000 = 2.000.000
3"000.000
1.200.000

Purchase price
Share in net income (8.000.000 x 159'i)
Dividenci received (15.000 x 30)

Share in revaluation surplus (2.500"000

4s0.000)
375.000
4.12s.000

x l5i4')

Investnrent in associate - 12131113

2q.8.100.000

30.

RC

HC

APPrais*l

s0.000.000

10.000'000
120.000.000
(i!l".qQ0-Q-0!D
(s0"000.000)
( 40"000.000)
I

s0o0op00 L00,oqo_00Q

Revaluation surplus - land (25.000.000

Revaluation surplus - building
Realization (20.000.000 i 20)
Revaluation surplus - 12131114
3i

?_er?@.@
10.000.000

15.00C"000)

20.000.000
1 .000.000 )
29.000.000

. I ll ll3 C-ash

(1,C00'000

lliscount on note payable l.5t)0"000

Note payable
Defemed grant inci,rne

12131113 Interestexpense

6,000.000
1"5E0,000

3s2.8CG

Discount on note Pir/aLle

incor:re 352.u0()
Income tiom grar,i

152,800

Def'erred grant

52.800

(4.410.000 x 896)

12131114 Interest

expense

38

!.i):'i

Discourrt on note PaYable

(4"752"800 x 8%)
Det-erred grant

ltrcome

inconre

-j 8

381 .024

i .024

381,024

Page 4
I

i 1"600.000 + i1.'i00.0c[ir = 3-500.000 x 30%: l'050'000

32, (50it.000

33. In.pairment loss ( 10.()0q-000

Aliocated to goodwill
Allocated to other assq'ts

7.200.00C)
(

2.800.000
1.000.00!)

L800J0q

'

1.500,000 c

tsuilding (1.800.000 x 5/6)

Tradenrark (1.800.C00 x 116)

300,000

34. Deposit in tran:,it - 5/31 li

Deposits recorded by' cntity in .lune
Deposits acknou,leciged by: hank in June {2.50i1"0'10

400.000

600.000
2,700.000
(2,080.000)

20.000)

!E&L

Deposit in transit -'6130

i5. 10"000.000 / 500 = 20.000 Y (.i 5q'7q)

1"600"000

36. (600.000 1 i.500.c'00

5.700.000

.600"00c)

37. 9.9s0"000

I
I

i8

Segment One
12"000.0c0

Saleir (407o

x 30.000.000)1

Traceable costs
irrconre befbre conrltt\in cost

TSqAJ0g)

5.000.00c
l.Qgo,9qg)
2.000.u10

Common cost (5/19 H 5.!Qt).000)

Segment profit

39.

Total
30.000.000
(2!-Aq!,Qag)
10.000.000

D
I
I

6,0!0,000)
4.000.000

350.000

40. Monetary assets (200 + 2.5ri0 - 100 r- 4.000 + 3"i50)

Monetary tiabitir.ies (1.5C0 r- 300 + 2.000'5.000 + 100)
Net monetary ssset

9"7s0.000
(8.e00.000)
8s0"000

41. Net writeotT(25i.000 * 15.000)

Bad debt loss percentage (236.000 i 14.0i.r0'00C)
Reqr-rireci allowance fbr doubtfui accounts (3.C|C0.0C0 x i'7ot"ts

238.000
1

.10/o

51,000

42. 1.500.000 x 3.79 : 5,685.000

A
I
I

41. 0 (Consignment)
44. Gcods available tbl sz,i:: t-,t ,,:irSi
Ending inventory 3t c()st (l-,riii).000 x 66 ?.!-70ti)
Cost of sales

6.000.000
600.000)
.5.400.000

io
I
I
I
I

45. Premium on saie

UnamortizeC ,Jiscoriri on purchase (500-000
Gain ou sale

- 100"000)

700,000
400.000
I . i00.000

46. 6.100.000 1a,li ca;riializedi

ID

47. 2.500.000 + 3"2ij,().000 =. 5.?00.000

I
I

lc

48. 2.600.000 + 1.000.000 = l.(,0Ll.0tlc

I
I

49. 4"100.000

+ 300.000

i-

a00.000

4,800.000

le
I

50. 2"500.000 cvcrstated

s',lut-I