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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

MC11

MC21

MC31

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+78,00086,000 + 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+1,300,0001,100,000 = 850,000 + 150,00084,000+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 customers


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

MC33
MC34

C
B

MC35
MC36
MC37

C
C
C

MC38

MC39

MC40

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; 123,00027,000=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

MC42

MC43
MC44

A
C

MC45

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

MC11

MC2

MC12

MC3

MC13

MC4

MC14

MC5

MC15

MC6

MC16

MC7

MC17

MC8

MC18

MC9

MC19

MC20

MC1
B
0
Problems
MC36
D
MC37
C
MC38
D
MC39
D
MC40
C
MC41

MC42

MC43

MC44

MC45

MC46

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

MC48

MC49
MC50
MC51

D
C
A

MC52

MC53

MC54
MC55

B
A

MC56

MC57
MC58
MC59
MC60

A
D
D
C

MC61
MC62

C
A

MC63

MC64

MC65

MC66

MC67
MC68
MC69
MC70

D
C
B
B

MC71

MC72
MC73

D
C

MC74

MC75

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 = 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
160,000128,750=31,250; 500,00031,250 =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

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 = 27,250
656,200 17 = 38,600; 12,500 + 27,250 + 38,600 = 78,350
340,000 10 = 34,000 x = 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

MC46
MC47
MC48
MC49

D
B
D
C

MC50

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