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On October 1, 2005, Bitoy Company purchased a machine for P250,000 that was placed in service on November 30, 2005. Bitoy incurred additional costs for this machine, as follows: Shipping 10,000 Installation 15,000 Testing 35,000 In Bitoy’s December 31, 2005 balance sheet, the machine’s cost should be reported at a. 250000 b. 295,000 c. 300,000 d. 310,000 2. On August 1, 2006, Bamco purchased a new machine on a deferred payment basis. A down payment of P100,000 was made and the balance is payable in P100,000 annually for 4 years. The current interest is 12%.The present value of an annuity at 12% for 5 years is 3.04 and the present value of an amount at the end of 5th year at 12% is .064. The same machine could be acquired on cash basis at P400,000. Bamco should record the machine at a. 500,000 b. 400,000 c. 403,735 d. 303,735
EXCHANGE 1. To save transportation costs, X acquired its needed equipment in exchange of its inventory located in the supplier’s business place. The equipment acquired has cash price of P650,000. The inventory of X has cost of P550,000, and X paid P80,000 cash for the difference in fair value of the two assets in exchange. In the books of X, the exchange is to be accounted as resulting to a. gain of P20,000 b. loss of P20,000 c. gain of P30,000 d. loss of P30,000 2. X issued 100,000 of its common shares in the treasury stocks, in exchange for a delivery truck. The treasury stocks with P10 par were selling at P12 at date of exchange. The treasury shares were previously acquired at cost of P11/share. The delivery truck has cash price of P1,250,000. In the books of X, the exchange will result to a. gain of P150,000 b. loss of P50,000
c. gain of P50,000
d. no gain/no loss
3. A P5,000,000 face value bonds were issued to acquire a building. At the time of acquisition, the fair value of the building is properly determined at P5,300,000 and the bonds are quoted at 110. The building is depreciated under the double declining method of depreciation with estimated economic life of 25 years and scrap value of P200,000. This was sold for P4,500,000 at end of its 2nd year . The gain (loss ) from sale is a. 14,080 b. 268,000 c. 183,360 d. (155,200)
BORROWING COST 1. Mozely Company borrowed P400, 000 on a 10 percent note payable to finance a new warehouse Mozely is constructing for its own use. The only other debt on Monzely’s books is a P600, 000, 12 percent mortgage payable on an office building. At the end of the current year, average accumulated expenditures on the new warehouse totaled P475, 000. Mozely should capitalize interest for the current year in the amount of (use 2 decimal palaces) a. P40, 000 b. P47, 500 c. P49, 000 d. P380, 000 2. X constructed its own building at a total labor, materials and overhead costs of P5,000,000, which was started January 1 and completed December 31 of the same year. During construction, the following loans are outstanding during the year, which are partly used in construction and partly used in regular operation: Principal amount P1,000,000 Interest Rate 10%
Construction costs for the year are as follows: Principal amount P2,000,000 1,000,000 1,000,000 1,000,000 Date taken Jan.1 April 1 July 1 Oct. 1
The capitalized borrowing costs as part of building cost is a. 350,000 DONATION 1. BoyD Company received Land as donation from its shareholder. At date of donation, the land has fair value of P1,000,000. The legal and documentation expenses to transfer b. 240,000 c. 140,000 d. 100,000
the title amounted to P25,000 at the expense of BoyD Company. The land was previously acquired by the donor stockholder at P750,000. BoyD should record the land at a. 1,025,000 b. 1,000,000 c. 775,000 d. 750,000 2. An enterprise receives grant of P15,000,000 from the government as subsidy to defray safety and environmental costs within the area where the enterprise is located. The safety and environmental costs are expected to be incurred over four years as follows: Year 1 P 2,000,000 Year 2 4,000,000 Year 3 6,000,000 Year 4 8,000,000 The amount to be reported as in year 1 Income Statement as other Income from government grant is a. 1,500,000 b. 2,000,000 c. 3,750,000 d. 15,000,000 PPE SUBSEQUENT EXPENDITURES 1. During 2006, Kiyen Company made the following expenditures relating to its plant building: Repainted the plant building 110,000 Major improvements in the electrical wiring 100,000 Partial replacement of roof tiles 80,000 Continuing and frequent repairs 200,000 How much should be capitalized in the above expenditures a. 490,000 b. 290,000 c. 180,000 d. 100,000 2. A machine of X is overhauled at cost of 1,600,000. The overhauling resulted to increase in production capacity of the machine. The machine was originally acquired at cost of P7,000,000 and the depreciated book value before overhauling was P5,600,000. If new similar machine would be purchased, it would have a cash price of 3,500,000. What amount should X recognized as retirement loss? a. 1,280,000 b. 1,600,000 c. 1,900,000 d. 2,100,000 DEPRECIATION 1. On January 1, year 1, the firm purchased for P2,400,000 a machine with useful life of 10 years, no scrap value. The machine was depreciated by the double declining balance method and the carrying amount of the machine was P1,536,000 on December 31, year 2. The firm can justify the change to straight line method of depreciation effective January 1, year 3. What would be the depreciation expense for year 3? a. 307,200 b. 240,000 c. 192,000 d. 153,600
000 d. What should Hunter record as depreciation expense for the first year under the straight-line method? a. Salvage value was estimated at P80. P90.000 4. P20.000 c. For the year 2000 how much depreciation expense should Debergen record on this equipment. Depreciation is computed using the sum-of-the-years digits method. 110. which had a cash price of P300.000 5. At the beginning of 2002. 800 b. Wang Manufacturing Company bought a new equipment for P800.000 c. 2003. Debergen Company purchased factory equipment which was installed and put into service January 3.000 were incurred. On January 1. 320.000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. P75. 000 1. 2003 would be c. Flax determined that the machine had a useful life of six years from the date of acquisition with no salvage value. P5.280. 2000. When the machine had been in use for ten years. P7. On April 1. P60.000 b.000.000 and useful life of 12 years. 000 d. The equipment has an estimated salvage value of P20. 000 Prior to the machine’s use. 000 c. 300. 800 6. P31. How much is the amount of depreciation for 2007? a. P29. An accounting change was made in 2003 to reflect these additional data.000. 2007. P30. 000 b.2.000 d. The equipment is being depreciated over eight years by the double declining balance method. 000. The machine was being depreciated on the straight-line method over an estimated useful life of 20 years. P31. 000 total P320. the company estimated that the useful life of the machine would be extended an additional five years. The machine has an estimated useful life of ten years and an estimated salvage value of P10.000 3. with no salvage value. Hunter Corporation entered into a contract to acquire a new machine for its factory. a. On January 1. installation costs of P80. P4. 333 c. 000. What would be the depreciation expense recorded for the above machine in 2002? a. 000 Note payable in 10 equal monthly installments 240. 000. 000 d. was paid for as follows: Down payment P30.000. The depreciation for this machine on December 31. 352.000 d.000 d. 225.000 c. P6.000 b. 333 . 000 shares of Hunter common stock with an agreed value of P50 per share 50. 2000 at a total cost of P1. The Bucol Company purchased a tooling machine in 1992 for P120. The machine. In January. Flax Company purchased a machine for P528. 308. 320. 240.
000 tons per month.000 4. 1.200.000 tons were produced and at the end of the year.000.500. On July 1.000 of which P400. it was developed at cost of P1. The total purchase price was P13. 120.000 c.000 c. 3.000.500 3. if the production for the year is 6.000 . 2.000 units. 1. 1.000. During the year. and during the year. If the total production cost is P85/ton before depletion cost.625 c.000 tons? a.680. For its 1st year of operation.000 5.000 tons.000 tons are unsold.000 .000 c.525. P1.500.000 units.000 c.500 d.770.320.200. 5.000 after restoration cost of P500. purchased the rights to a mine. AT the end of its life. After exploration cost of P1.000.600. how much is its depletion cost in the Inventory? a. What is the depletion cost for the year after adjustment on depletion rate. At the start of the year. it has beginning inventory of 100. The total original depletable costs of the mining entity was P10. during the year it produced 1.000.125. 720. 262. Kinanto Company.500. 7.400. 1. a calendar year corporation.500 2. 2.000 units were produced at production cost of P5. After producing 15.800.000 tons.000 units. 50.225.000.237.000 d. It has estimated life of 5 years.900.000 b. the property could be sold for P3. 7.000 b.250.000 d.000.000 tons.200. Kinanto expects to extract and sell 15.000 units.4. how much is the total cost of sale for the year? a. Confirmed deposit is at 40. 2000.DEPLETION 1.500 b. P240. Its original deposit was 42. 140. The mining property was acquired at cost of P12. The depletion rate of the entity is P15/ton.000 d.500. It was able to sell 1. 675.20 per unit.000 was allocable to the land.137.000.100.000 (intangible).000. additional reserves are discovered at cost of P4. The depletion cost in the inventory is a.000. P1. If sales and production conform to expectations.500. what is the depletion for 2000? a. 1. 1. The additional reserves discovered is equal to 22. 5.000 b.825. 112. Estimated reserves were 1.000.000 b.000 of production were sold during the year. At the end of the year.000.400. A wasting asset corporation has established its depletion cost at P1.000 d.000.
000 PPE IMPAIRMENT 1.000 at end of its 2nd year . 150. The building was constructed at cost of P12.360 c. 90. and was depreciated using the straight line method. the equipment was sold at P200.000 and the bonds are quoted at 110.000 d. The sale will result to a.000. On January 1. gain of P40.000 c.000. zero scrap value. 112. What is the loss on impairment? a. 183.000. At the time of acquisition. In June 15.500.000 b. 2006 a test for impairment indicated that the undiscounted cash flows from the sewing machine are less than its carrying value.000 c.500. The business shifted to revalued amount.300. the building was appraised by an independent appraiser at P4. 2003.080 b.DISPOSAL 1. 2013. The building is depreciated under the double declining method of depreciation with estimated economic life of 25 years and scrap value of P200. the fair value of the building is properly determined at P5. 500 b. loss of P70. 2003. a clothing manufacturer.000 On January 1.000 on July 1. This was sold for P4.000. The machine’s fair value on January 1.000 d.000 d. P2.000.500. A P5. 100% condition. 268.000 residual value.000 face value bonds were issued to acquire a building.000 c.000 b. 1994 at cost of P2. At the end of its 8th year. The gain (loss ) from sale is a. If it will shift to revaluation model.200) 2.000. it is estimated that same could be constructed at present price level for the amount of P15.000.000. a P100.000.000 . 2006.000 REVALUATION 1. gain of P10.000.000.000 b. The machine had a 10-year life.000. loss of P40. It was acquired in June 15.000 and a condition percent of 75. a new building was purchased at a cost of P3. It has original estimated life of 24 years. 925. purchased a sewing machine for P2.000 d. P3. 14.000 and it has estimated salvage value of P160. The annual depreciation subsequent to appraisal should be a. P7. 830. 2006 is P600. The equipment with estimated life of 12 years is being depreciated under SYD method of depreciation. P1. Simon Company.000. On January 1.000. Depreciation was regularly provided at 2% per year.000. (155. 60.500. the amount to be credited to revaluation surplus should be a.
and testing of preproduction prototype and model 160.? a.000 d. 9.000 4. the remaining useful life was reduced from 8 years to only 3 years as of January 1.000 d.000 INTANGIBLE ASSETS 1.000 c. 300.000 2. 2006. 150. 2005.000 scrap value. In its December 31. The annual depreciation after impairment loss is recorded would be a. It is being depreciated on straight line method for 8 years with P160.000 in its income statement for the year then ended December 31.200. an independent appraiser valued it at depreciated amount of P6.500. The original acquisition cost of the PPE is a. 200. 2005 balance sheet.120.000 which is the fair value on that date.300. On January 2.500. 10.000 .800. what amount should be reported as net book value of the machine? a. 1.000 b. 700. 8.000 Testing in search for new product or process alternative 200. During 2006. 2006 had suffered a permanent impairment and as a result should have a recoverable value of only P1.000. Okay Company incurred the following costs: Research and development services performed by Okra for Okay 150. 240. Gem Company determined that due to obsolescence an equipment with original cost of P4.000 .000.000 c. 2004 with useful life of 10 years and residual value of P200.740.000 c.000 d. At the end of its 4th year.320. At the end of its 4th year. 320. without scrap. construction. The Equipment was acquired at cost of P6.000 is a reasonable amount to be recovered through its use for the rest of its life. 950.100. 420. 800.000.200. 100.000 c.000 Design.000 at January 1.000 5. it is observed that this suffered permanent impairment and estimated that P200. 1. Crane Company reported an impairment loss of P2. This is being depreciated at rate of 5% per year.000 b.000. Crane reported these PPE at P6. 2004. In addition. 500. This loss was related to an item of PPE acquired on January 1. 10.000 b.950. What amount should be credited to revaluation surplus to record the revaluation.200. On December 31.000 as of the beginning of the year.000 b.000 3. 2000 a machine was purchased for P800. without scrap value. 1.000.000 d.000 d.000 and accumulated depreciation of P2.c.
000 2. What should be the carrying value of the Patent in the books of Darrell Joe at the end of December.600 d.250 5.000.P18. At what value should X record the acquisition of the Patent? a. The franchise grants Ramtell the right to sell Rosebud’s product for a period of 8 years.000. 350. 2005? a.000 3.000 2. 600 d.000 1. 2008. 510. c. 2003 . purchased a patent on January 1. The patent has carrying value in the books of Y at P90. Pastel Co. 100.X exchanged 2. 000. During 2002. 360. What amount should be charged to patent amortization expense for the year ended December 31.000 c. b. 600 b. 2002? a. P142. 1999. On October 4. P56. The patent has remaining legal life of 16 years at date of purchase.000 d. for P714. Darrell Joe purchases a patent from Ziggy on January 2. P47.In its 2006 income statement.000 c. P25. For P64.000 b.750 c. 110. 800 3. X’s common stock was quoted in the market at P55 per share. At the time of exchange. P60. P51. P81. 2004. The patent was being amortized over its remaining legal life of 15 years expiring on January 1. 2004. Pastel determined that the economic benefits of the patent would not last longer than 10 years from the date of acquisition. P7. what should Okay report as research and development expense? a.200 b. P182.000 shares of its P50 par common stock held in treasury for a patent of Y. a.500 b. d. P57.000 4. The cost of the franchise to be reported in the year 2004 Income statement of Ramtell would be.000 d. P68. 80. The treasury shares were previously acquired at cost of P80.000 .000 c.000.000 on April 1. 200. RamTell obtained from Rosebud a franchise for a cash payment of P200. 90. Darrell Joe feels the patent will be useful for 10 years.
500. P1.000.. P1. In one of these years.000. P400.000 4. It is estimated that the goodwill will enable RAD U excess earnings for 10 Years. What should be the amortization expense for this patent for the year 2005? a. What is the goodwill if agreed as equal to purchase of average excess earnings for 5 years? a. P2. the fair value of the patent is P110. If X is to be sold at fair value with goodwill equal to excess earnings for the next 5 years.600.000 5.000. AT that date. P22.000 2. At the time of purchase.GOODWILL 1.000 gains from sale of PPE was reported.000 3.000 1.000 2.000 b. P1. w/o goodwill 500. P800. The Fair value of the net assets of X is P8.000 for the rest of its remaining life of 5 years. P20.300. P24.000. At what value should the goodwill be reported in the December 31.000 c.000.000 c. P1.200.25% annually .000 d.400. The normal earnings in the same industry where X belongs is 10%.500.200.500.000 Intangible.000 d.200.000 b. the patent of Mag Lucky with original life of 15 years has carrying value of P300.000. Vic Tim’s balance sheet showed assets of P6.300.000. but IMGONNAPASS believes it can earn 11.000 b.500 c. 2005 balance sheet of Rad U in the absence of any indication of impairment? a. respectively.000.000 c.000.500. As of December 31.000 d.000 and P1. 1.000. The fair value of Vic Tim’s identifiable tangible and intangible assets is P8. On September 1. P1. The book value and current value of the net assets of IHAVETOPASS company are P3.000 b. IMGONNAPASS is considering acquisition of the net assets of IHAVETOPASS to expand its operations. P1. Mag Lucky expects future net cash flows from this patent to total P180.500.000 Liabilities………………….000.000.000 Normal rate of earning is 8% X’s expected earnings is at 14% per year for 5 years.000 1.000 and P4. 210.000.000. P 1.000 and liabilities of P2.300.000. 2004. 350. At this date.312.000. The following info pertain to X company which is to be acquired by Y company: BOOK VALUE CURRENT VALUE Tangible assets 1.400. how much would be the value of the goodwill? a.000. P38. 450.000 d. X reported its past earnings for the last 5 years as P1.000 at time of purchase. P500. 2004. P1. 90. Rad U acquired Vic Tim for a cash payment of P7.000 . The normal rate of return is believe to be 9%.
covering rent for the first two years. Opera paid Soap P60.2003.on its investment in IHAVETOPASS due to its excellent reputation.500 c.000 as gross rental income in its 2003 income tax return. leased a delivery truck from Titanium Corp. The value of goodwill is a.200.000 per year.500 = 90. Upon execution of the lease. P2. P1.000 c.000 c. under a 3 year operating lease.000 d.000 b. determined by capitalizing average net earnings at 10%.000.000 All payments were made when due.2001.200. X’s business’ cumulative earnings for the past 5 years amounted to P500.000 12 months at 17.000 payable as follows: 12 months at P5.000 b. Soap Corporation signed an operating lease for a warehouse with Opera Company for ten years at P30. P60.000 d.000 d. what amount should be reported as accrued rent receivable? a. P150.2003 balance sheet. P4.000.000 b.000 ON December 31. The appraised value of the business’ net assets was P800.000 c. X is selling the business plus goodwill. Soap closed its books on December 31 and correctly reported P60. P900. P210. Radium Inc. None of the above 6. P1.000 12 months at 7.000 .000. What is the amount of goodwill using the “year multiple of excess earning” method assuming a 10-year period of excess earnings? a. In Titanium’s June 30.000.500 = 210. How much should be shown in Soap’s 2003 income statement as gross rental income? a. P60. 200.000 d. P 0 b.000. Total rent for the term of the lease will be P360.000 = P60. P30.000 LEASE On July 1.000. P5. P1. P90.
000 d.000 42. Additionally. 4. 140.000 d. 2002.100 3. Worm has an option to renew the lease for an additional 8-year period on or before January 1. balance sheet. 2012.100 Estimated remaining useful life 12 years In Bain’s December 31. 29.40. The lease expires on January 1.000 b.000 4. with an estimated useful life of 15 years.750 d. 2000.000 for 12 months @ 12%) 34. Pertinent information at this date follows: Sales price 360. the deferred revenue from the sale of this machine should be a. 90. Dean should record rent expense of 0 b. 2002 . the lessor permitted Dean to occupy the premises rent-free from October 1 to December 31.000 41. On December 31.000 10. 420. 504. for office space and made the following payments to Cant Properties: Bonus to obtain lease First month’s rent Last month’s rent 30.000 to Rapp as a lease bonus and P25.000 . In Rapp’s 2002 income statement. 1998.000 c. 468. Dean Company leased office space at a monthly rental of P30. Rapp Company leased a new machine to Lake Company on January 1. 0 b. 2002 balance sheet. Worm has taken a full years depreciation on this leasehold improvement.000. 510. During January 2000. On January 1. The annual rental is P90. 2002. Worm Company signed a 12-year lease for warehouse space. 30. 90. Lake paid P50. the amount of rental revenue should be.000 d.250 c.000 Carrying amount 330. On June 1. for the year ended December 31. on January 1.000 b.000 c.000 10. commencing on that date.125. 87. the carrying amount of this leasehold improvement should be a. Bain Company sold a machine to Ryan and simultaneously leased it back for one year.000 as a security deposit to be refunded upon expiration of the lease.100 c. 2001. In the December 31. Worm made a decision to exercise the renewal option and made substantial improvements to the warehouse. The cost of these improvements was P540. 2007. On October 1. 100. 2002. Oryx Company entered into a five-year nonrenewable lease.000.000 for 10 years expiring September 30. As an inducement for Dean to enter into the lease.000 Present value of reasonable lease rentals (P3. 34. 2002. 2001. 2000. a.
The equipment’s useful life is 10 years. 2005 is .000 · July 1. 120. 2007. balance sheet? a. For the year ended December 31. and the interest rate implicit in the lease is 10%. 2007.000 are due December 31 for 10 years.350. Raphael estimates that the equipment’s fair value will be P200.500 126. which includes a P100.234 and P21. P224. What amount should Lazarus include in current liabilities for this finance lease in its December 31.550 and P21. 2005 G leased a delivery truck from M under 3 year operating lease.400. 000.000. What is the total present value of the lease and the first year’s interest expense? (use 2 decimal places for computation of PV) a.508 b. The capital lease obligation was recorded on December 31. payable in advance for five years.000 135. Raphael accounted for the acquisition as a finance lease for P2. P65. c. 2008. At the end of the lease. 2007. P275.000 b. 2001.000 at the end of its 8-year life.000 d. what amount should Raphael recognize as depreciation expense on the leased asset? a. On December 31.000.000 bargain purchase option.000 3.508 d.000 120. P90. and the first lease payment was made on that date. P460. b. Raphael Mining Company (lessee) entered into a 5-year lease for drilling equipment. P224. After five years.000 The rent expense to be reported in the income statement of G for the year ended December 31.546 c. On January 2.771 and P21. 2007.771 and P19. what amount should Oryx report as rent expense? a. P210. P85. 2006.000 b. Lazarus Corporation leased equipment under a finance lease. P115. Lease is payable as follows: · July 1. P200. P204. Raphael expects to exercise the bargain purchase option. at P1. P204.000 c.000 d. there is a bargain purchase option of P75. 2007.In its income statement for the year ended June 30.000 c. d. P300. 000.000 2.000 State Repairs acquires equipment under a noncancelable lease at an annual rental of P45. Raphael regularly uses straight-line depreciation on similar equipment.173 On July 1. P60. 2007.000 · July 1. Annual lease payments of P200. The appropriate interest rate is 12 percent. P480.
2005 balance sheet as total liabilities? a. Stockton appropriately accounted for the lease as a capital lease.000 d. face value.960. The lease requires annual payments of P50. 7. 60.000 · Unearned Income. Stockton’s incremental borrowing rate is 12 percent.000 b.000 d. P75.000 b. HI reported the following items on its December 31. 2005 trial balance: · Accounts Payable.000 payable every end of the year starting year January 1. what is the lease liability that Stockton should report on the balance sheet at December 31. 55.089. Assuming the present value of an annuity due of 1 for 5 years at 10 percent is 3.000 · Cash surrender value of life insurance. P288. 2002. In January 1. the year of signing.210. 7. 2002. 2001.000 · Advances to officers and employees. 90. The contract is a 5.000. 52. To obtain the right to the lease. P1. the following improvements on the leased property were completed: Economic life 5 years 3 years Cost scrap value 60.79 and the present value of an annuity due of 1 for 5 years at 12 percent to 3. P45.000 -0120. 120. P239.000 · Discounts on bond payable.500 c. X also paid advance rental for 3 months which is applicable to the last quarter of the contract.000 · Accrued interest receivable.a. X paid initial payment of P100.005.000 c. The monthly rental is P20. 2002? a. P5. on December 31.672.60. P230.year noncancelable lease with an implicit interest rate of 10 percent.000 c. 000 from Layton Machine Co.000 How much should be reported in the December 31.000 c.000 Stockton. redeemable with merchandise. 50.540 X entered in a 5 year lease contract with Y.000 6.000 b. P225.000 · Bonds payable.240 d. 30. leased machinery with a fair value of P250. 6.000 b.000 .000 · Outstanding gift certificates issued. Inc.550. P189.000 d.000 LIABILITIES 6. P180. P39. 6. 36. The annual depreciation expense to be taken in the books of X is a. P258. 2002.000 Mezzanine Office ………. 000 beginning December 31.
On January 1. 2002.000 P 18. P12.000 On July 1.000. 10% b. The terms of the note require Riviera to make five annual payments of P50. 2007.000 On December 31.000 c. what amount should Monitor report for accrued salaries payable? a. P62. X should report interest expense of a. 000 4.000 covering first 2 years’ rent and a deposit of P150. GC received P300.000 75. Monitor Company’s salaried employees are paid biweekly.000 which is returnable at the end of the ten year lease .000 Salaries expense during the year 815. 20.400 d. The bank discounted the note at 10%. 150.000 Accrued salaries payable 65. 2006.000 Salaries paid during the year (gross) 780. 17.7. P100. 0 300. 9% . less than 10% d. P50. more than 10% c. X discounted its own P1.000 9. 75. 30. 2005 balance sheet. advances made to employees are paid back by payroll deductions.000. 2005. issued a five year note payable with a face amount of P250. the current liabilities section of Riviera’s December 31. balance sheet should include a.000 d. In its income statement for the year ended December 31. 500 b. 26. On October 31. 000 c. 12% note payable for one year.000 d. P35.600 b.000 c.000 8. As Of December 31. with the first payment due June 30. With respect to the note. P82. 2002. P94. 2005.000 b.000 150.000 b. 500 d. 000 and an interest rate of 10 percent. The effective interest paid by X for this loan is a. X issued a short term non-interest bearing note for cash loan received from a bank. Information relating to salaries for the calendar year 2007 is as follows: 12/31/06 12/31/07 Employee advances P 12.000 c. 150. 2003. The else contract commenced January 1. how much should be reported by GC as its liabilities with respect to the above transactions? CURRENT NON-CURRENT a. Riviera Manufacturing Co. 2006. 000 plus accrued interest. Occasionally. P75.000 150.
Tac Cute Co. 000 c. Extend the maturity date to December 31.000 b. 2. P408. the land of X has recorded cost of P1. 2000 is forgiven 2.000 c. 2002. 200. Loss of P 800. is requiring a deposit of P 100 for each container that costs P80 each.400 RESTRUCTURING On December 31. 000 is to be paid to Woods on December 31.000 · Accrued interest on the note. At the end of the period. 4.000 d. P0 b. 000.000 and estimated to have realizable value of P2. Since X has no cash available to settle the due account. The new interest rate is 8% 4. 40 containers remained un-returned and out of these. Sunrise Company obtained the following changes in terms of note: 1.000. 2002 and 2003. X should record . The new date of maturity is December 31. P400. 000 As of December 31. P2. 000 accrued interest. Forgive the P128.000.000 due on December 31. During the period. 2002. 10 are expired and corresponding deposits are forfeited. In an agreement with the creditor. At the date of settlement.000 The above date is also the maturity date of the liabilities. On December 31. Inc. The interest rate is 15% payable every end of the year. 000. Gain of P900. 100 containers were collected with deposit . 2006 X’s outstanding liabilities include: · Note Payable. 2004. 000 plus recorded accrued interest of P128. 000 d. The principal is reduced by P500. As a result of a court imposed settlement on December 31. holds an overdue note receivable of P1.000 c. Under PAS 39. P288.500. Woods must recognize a loss from restructuring of a. Woods agreed to the following restructuring arrangement: Reduce the principal obligation to P1. 2005. 2000 Sunrise Company is experiencing extreme financial pressure and is in default in meeting interest payment on its long term note of P6.000 d. the creditor agreed to accept the land of X as settlement. P528. How much is the outstanding liability on containers’ deposit? a. These containers are required to be returned within 3 months from date of issue. Gain of P 800.200. Loss of P900.000. Annual interest of P120.000 Woods.000 b. 3. What is the amount of gain/loss on the debt restructuring? a. 600. 1.000. 3. The accrued interest on December 31. 2002.
b.000 loan. 2000. and has fair value of P3.000. At date of exchange it has remaining life of 4 years. X should recognize gain on debt extinguishment of a.000.000. 92. 146. Hole Company began offering a new product for sale under a oneyear warranty.a.000 to X.000 gain on exchange of P700. On April 1. 2000. 125.000 units inventory at April 1. During 2006.000 X has a 2.year P2. Actual warranty costs incurred from April 1 through June 30. X is in financial trouble and negotiated to transfer its machine as payment of the matured liability. W sells washing machines that carry a 3 year warranty against manufacturer’s defects. At June 30. 160. 100.100.250 WARRANTY 5. In its income statement for the year ended December 31.000 gain on debt extinguishments of P900.000 were incurred. 150. Based on the past experience.000 10. and estimated realizable value of P500. 2000.000 b. 90% of the units sold would need repair? a.000 and warranty costs of P100. At maturity date. The machine is being depreciated by X using straight-line method over a period of 6 years. gain on exchange of P900. 150.000 b. 3. During 2005. Based on the company experience.250 c.000. c. stereo system sales amounted to P5. warranty costs were estimated at average of P30/unit sold.000 gain on debt restructuring of P200. 170.000 c. what amount should Hole report as warranty liability.000 9. d. Hole estimated that the average warranty cost per unit sold would be P80.000.5000. 2000.000 washing machines and paid warranty costs of P170. W sold 24. 240.000 d. 2000.000 b. warranty costs are estimated at 5% of sales for the warranty period. Based on its experience with similar products. payable carrying 13% compounded annually. were P70.000 d. East company manufactures stereo systems that carry a two-year warranty against defects. The bank accepted the offer and take over the machine which has acquisition cost of P5.000 at the end of its life.000 d. if based on experience. 192. 250.2006 East should report warranty expense of a.000 had been sold by June 30. .000 c. 50. Of the 5.
000 before P57. P75. How much of the estimated liability for premium payable should be reported in its current year’s end balance sheet? a.000 d. 153.729 c.000 b. P175.000 c. 2007? a.000 b. P30. How much should the general manager receive for the year as bonus if the pre-tax income after bonus is P2. P157.000 outstanding gift certificates should be deferred at December 31. P170.500. The bonus is to be computed on income after bonus and tax of 35%. which had been sold to customers during 2007 for P75. but after deducting the income tax.000 b.000 c. Laser operates on a gross margin of 60%.000 GIFT CERTIFICATE 5.000. G Company’s total sales for the product amounted to P6.000 d. 40.000 gift certificates outstanding. of which actual containers redeemed were 7. 240. Under an incentive compensation plan..000 1. At December 31. P164. 80.000 b. The bonus agreement of Christian Company provides that the general manager shall receive an annual bonus of 10% of the net income after bonus and after tax.692 real property tax. P550. The net income for year 2005 of PC before any deduction for bonus and income tax amounted to P2.In its income statement for the year ended December 31. P240. W should report warranty expense of a. before bonus and 35% income tax. 170. 250. 2007. plus remittance of P50. a gift item is offered to customers on the return of 5 empty containers as proof of purchase. and it is estimated that 80% of the proof of purchase will be redeemed.620 F has an agreement to pay it manager a 5% bonus . P170.000 d. To promote its sales.000 d.000 d. The income tax rate is 32%. 60. the general manager is entitled to a yearend bonus of 10% of the net income before deducting the bonus. How much revenue pertaining to the 1.620 b. .000 c. 2005.000 BONUS 6. G Company sells its only line product at average selling price of P500/unit.000. Laser Company had 1.000. The cost of gift item is P150/pc.000? a.000.600. The business earnings amounted to P8. P0 c.000 11. 20. P720. The prevailing income tax rate is 32% The manger’s bonus for 2005 was a.500. For the current year. P45.
14 · PV of an ordinary annuity of 1 for 20 periods.2006.000 of its 8% P1.000 13. July 1 and January 1 · Issued at yield of 12%.620. Haching company issued 3. The bonds were issued through an underwriter to whom Huff paid bond issue cost of P340.2006.000 c.71 and @ 12% = 6. 659. 10 years · Nominal interest. 2. 3. 770. at 99 plus accrued interest.000 · Term. 4.000 d. @ 8% = 6.How much bonus should be provided to the manager? a. 2005: · Face value. (effective interest) · PV of an ordinary annuity of 1 for 10 periods. @ 8% = 9. 982.816 d. P1. 251.000 b.000 What amount should Haching record as bond issue costs to be amortized over the term of the bonds a.60 7. 50. @ 4% = 8. Haching paid the following expenses: Promotion costs P 50. On June 30. P1.000. issued. 3.000 bonds. 3. 380.000 Engraving and printing 60. On June 30. 250. 378.000 of its 9%.000 bonds? a.47 · PV of an ordinary annuity of 1 for 10 periods.000 c.000. P1.60 d.820.51 What should be the issue price for each P1. 2010.205 c. Huff should report the bond liability at a. The bonds are dated January 1. 2000.98 c.36 · PV of an ordinary annuity of 1 for 20 periods.000 b. 310.000 Underwriter’s commission 200. Huff Corporation issued at 99.000 bonds.11 and @ 6% = 7. 60. 8% · Interest dates. @ 4% = 13. 110.000 face value bonds at 102. During 2003.59 and @ 6% = 11. four thousand of its 8%. and . Gerry Corp.960. In connection with the sale of these bonds. 2000. mature on January 1.000 BOND ISSUE 12.92 and @ 12% = 8. The following information pertains to SF’s issuance of bonds on July 1. 977 b.952 b.000. On April 1.000 14.000 d.
4. At the date of issuance. 2007 and mature on January 1.000 face value bonds for P1. 1.pay interest on July 1 and January 1. 1. 2.000. P50 par value. 4. At the date of issuance.890. what is the book value of remaining bonds if the issue date and date of bonds are the same? a. sold at 105. From the bond issuance.X’s bonds. P1. 2017.980. 40% of the warrants were exercised 12 months after the bonds were issued and when the price for each share of common stock was P60.42 What is the amount to be reported as bond liability in the X’ balance sheet at date of issue? a. P1. Each bond is carrying a warrant that permits the bondholder to purchase 10 common shares. 200.920.940.000 b.479. 5. 1.000 On January 1. Each bond is carrying a warrant that permits the bondholder to purchase 10 common shares. 1. 850.880. at P55 per share.500. P1.990. P50 par value.000. issued at 97 plus accrued interest.330 .000 c. how much should be credited to additional paid in capital at date of exercise of the warrants? a.000 c. the market value of bonds. the following market value are known: . Upon the exercise of 40% stock warrants. 2002 X issued 1.430. face value P500 each. in the books of issuing company. On April 1. 2. At date of issue of bonds.425. ex-warrant was 98.020.780.000 of its P1.000 b.965. 1. The bonds are dated January 1.000 5-year bonds.060.000 c. Each bond had 4 detachable warrants eligible for the purchase of one share each of X’s P50 par value common stock for P60.Common stock of X…… P 55. at P55 per share. the market value of bonds.996 d.Warrant P 17.000 c.000 b.000 .000 of its 10%. 350. Interest is payable semi-annually on January 1 and July 1.000. From the bond issuance. 2007.000 d. ex-warrant P1.000 c.808 The company issued 10. face value P500 each. 4. P1.000 b.000 d. 340. P1. 2.000 The company issued 10.439.000 5-year bonds. Gerry paid bond issue costs of P20. Gerry received net cash of a. Florida Corporation.50 each .000 b.000 d. If 40% of the warrants were exercised 12 months after the bonds were issued and when the price for each share of common stock was P60. sold at 105. ex-warrant was 98.000 6.000 bonds. Florida would receive net cash of a.
12% 10 year bonds on October 1. On November 1. 2002. It’s interest is payable every June 30 and December 30. Bond issue costs totaled P50. 150.000.000 and related unamortized bond issue cost of P430. Interest is paid every April1 and October 1. 2004? a. 2002. Inc. 2002 and pay semiannual interest on April 1 and October 1. The bonds were sold to yield 10% with the total proceeds of P3.000 BOND RETIREMENT 10. 630.000 c. P50.BOND INTEREST 8. 20-year bonds at 102 plus accrued interest on February 1.250 d. Mason Corporation issued P4.500.333 b.000 c. What is the interest expense to be reported for the year 2002? a. The bonds are dated June 30. On its December 31. P30.000. balance sheet? a. 2007 and pay interest semiannually every June 30 and December 31. What is the amount of interest expense to be reported for the year ended December 31.000. The accrued interest on the bonds issuance date is a. 100.000 On July 1. 12% . The bonds are dated October 1. 258. 2002.000 face value.875 d. P10. 2005 is a.000 face value bonds at 97. 156. Boni corporation issued P5. 615.000.000. 250.000.000 plus accrued interest.000 7.000 9. P5. 143. 2004 the company sells a P5. 2007.000 P20. 12%.000 A 2-year. 625. 80.000. The bonds are dated January 1.000 c. 300.500 d. 2000 balance sheet. 87. 2004 and mature in 5 years and pay 12% interest semi-annually on June 30 and December 30. Michigan. 2002 at 105. issued P1 million.000 face value bonds were issued to yield effective interest of 10%. 600. 8% term bonds dated October 1. 341.000 of its 10-year.125 b.000 b.000 c.000 d. The bonds were dated July.750 b. What should Mason report for interest payable in its December 31. The interest expense to be reported for the year ended December 31.000 d. 2004 and issued the same date. The bonds had .000 c. 53. Molo Corporation reported bonds payable at P8. The premium is to be amortized using the straightline method over the period during which the bonds are outstanding. 945.
The difference is due to accelerated depreciation for income tax purposes.been issued at par..000.000 b. After amortization through June 340. with interest payable on June 30 and December 31.000 d.50.000 c. 000 were converted into 20. P85. bonds with a face amount of P500. at 103. The December 31. 315. 000 shares of P20 par common stock. 000 c..78.200. P100.000 11.000 bonds were retired at 99 plus accrued interest. On January 2.000 . 2000. Interest is paid December 31 and June 30. had outstanding 10 percent P1.000 Laker. Estimated tax in 2003 paid for 1st 3 qtrs………. 208. The income tax rate is 32% and Tyre made estimated tax payments during 1st 3 quarters of 2000 in the total amount of P90. Inc. Tyre Company reported pretax financial statement income of P750. 53. 2000. In the computation of income taxes. 93. 2005.000. 2010 4.000 d. 2001. 000.000 face value. For the year ended December 31.000 . 73. Molo retired P3. On March 1.000 d. recording the conversion by using the value of the bonds.000. 118.000 The bonds were issued on December 31. 000 TAX ACCOUNTING 12.000. 240. Its taxable income was P650.000 b. 150. 000 d. On that date. What amount should Molo report in its 2001 income statement as loss on extinguishments of debt? a. 12% due December 31. 2002.000 of the outstanding bonds at par plus a call premium of P200.000 Premium on bonds payable 108.000 b.. Depreciation deducted for tax purposes in excess of depreciation deducted for book purposes………….P350. P115.……………. the following data were considered: .………………………………………………. What should be the gain on retirement of these bonds? a. 2003.000. Laker should credit Additional Paid in Capital for a.000 X’s books showed pre-tax income of P800. 372.000 c. 415. gain from life insurance of the company president where the company is the beneficiary….000 for the year ended December 31. of each year. P0 b. What amount should Tyre report as current income tax payable for 2000? a.000 c. 000. 2001 balance sheet of Ross Company included the following items: Bonds payable.000. P2. convertible bonds maturing on December 31.000 . 59.. 2002 the unamortized balance in the bond premium account was P30. 172.
64.000 The Indy Company had taxable income of P12.000.000 d. Income tax rate………………………………………………………… 32% What amount should X report as its current income tax liability on its December 31. Quick determined that any deferred tax asset is fully realizable. 350. Quick’s tax rates are 30% for 2007 and 40% thereafter.000 b. 82. P72. P144.400 P6.000 and the temporary non-deductible expenses. 2007.000. 65. 35. 32. 70.As of balance sheet date. 70. The beginning of the lease was July 1. 2002. the new tax law was enacted implementing revised tax rate at 32% effective next year. Indy used accelerated depreciation for tax purposes (P3. what amount should Grim report as current provision for income tax payable? a. 128.000 d. c. P100. Quick had no other permanent or temporary differences. b.. what would the company's pretax accounting income be for 2002? a.000 and its taxable income was P150. What amount of deferred tax asset should Quick report in its December 31.000.000) Total ………………………………………………………. Grim Company’s pretax financial statement income was P200. 35.000 c. 50. 2007 balance sheet? a.000 . 2007.000 c.000 b. 320.400 8.000 b. 54.000 annual rental payment on June 15. Assuming Indy had no other temporary differences. 2003 balance sheet? a. Rental income is taxable when received.000 d. P1. P208.000. In its 2002 income Balance sheet.400 The prevailing tax rate is 35% . P54.000 The income tax rate is 32%. 50.000 during 2002.000. The difference is due to the following: Interest income on saving deposits……………………….400) and straight-line depreciation for accounting purposes (P2.000 Premium expense on keyman life insurance (Grim is the beneficiary) (20.400 P17. 320. The current tax liability and deferred tax assets are a.000 b.000 37.000 c.000).000 c.600 P13. The taxable income per return is P1. d. Quick Company leased a building and received the P360.000. For the year ended December 31. 48.
000: Other data related to the retirement benefit plan for 2006 are as follows: Current service cost P140. 350. 48.000 Salaries paid during the year (gross) 780.000 b. 50.400 RETIREMENT BENEFITS 9.000.000 On December 31. P100. On January 1.000 d. 2002. In its 2002 income Balance sheet.000 Salaries expense during the year 815. P143.000 Unrecognized prior service cost -0Contribution to the plan 204. 2007.000 Premium expense on keyman life insurance (Grim is the beneficiary).(20. P35. 2007.000 Benefits paid 200.000 2. 32. what amount should Monitor report for accrued salaries payable? a.000 b.000 c. advances made to employees are paid back by payroll deductions.000 Actual return on plan assets 185.d.. Occasionally.000 Accrued salaries payable 65. To arrive at taxable income per Tax Code.000 Discount rate 9% Expected rate of return 6% The retirement benefit expense for 2007 is a.000 .000 .000.200.000 b. what amount should Grim report as current provision for income tax payable? a. 54. Accrued Benefit Obligation P3.000 P 18. 70. Grim Company’s pretax financial statement income was P200.200.000 10.000 c. Stinx company had the following balances in its memorandum records: Fair value of plan assets P3. Information relating to salaries for the calendar year 2007 is as follows: 12/31/06 12/31/07 Employee advances P 12.000 The income tax rate is 32%. P94.000) Total …………………………………………………….000 d. the following differences are considered which are part of the computation of GAAP income: Interest income on saving deposits ……………………… 70. P82. Monitor Company’s salaried employees are paid biweekly. P236. 64. For the year ended December 31.
000 · Discount rate. Amortization of prior service cost was P24. P59.000 450. b. c.000.000 P84.600.000 was fully funded at the end of 2002.c.200.000 390. the following data related to pension plan are available: · current service cost.000. What is the amount of Cub's un-amortized past service cost at December 31. P436. Prior service cost was funded by a contribution of P60. Cubs Corporation adopted a defined benefit pension plan. 9% · Expected rate of return on plan assets.000 in 2002.000.000 4. P36. P390.000 P90.000 5. P3.000 32.000 · Contribution to the plan. At the start of the year.035.729. P94.000 The following information relates to the defined benefit pension plan for the McDonald Company for the year ending December 31. d. December 31 Expected return on plan assets Amortization of deferred gain Employer contributions Benefits paid to retirees Settlement INTEREST rate Current Service cost for the year would be a. P140.000 · Benefits paid to retirees.500 425. 6% P4. Projected benefit obligation. c. 2002. December 31 Fair value of plan assets. P200. January 1 Projected benefit obligation. 2002? a. d.000 On January 1. b.000 for 2002. P243.000 10% . BoyD had the following balances in its pension benefit memo records: · Fair value of plan assets.000.200. 2002. P204.000 d.000 · Actual return on plan assets. P129. P185.000 5.000 During the year. January 1 Fair value of plan assets.000 P60.000 · Accrued benefit obligations. The plan's service cost of P150. P3.565.
000 d. common stock Subscribed preferred stock Subscribed common stock Treasury stock. preferred.000 360. prepaid benefit expense of .000 c. Accrued of P243.360.000 b. Accrued of P366.000 1.000.600. P236.000 440.000. 2003 trial of Hollow Corporation: Preferred stock. Prepaid of P366.000 d. Prepaid of P 243.000 P10.000.000 2.700.000 b. 2.000 How much is the total .000 600. P143.000 SHARE CAPITAL The accounts shown below appear in the December 31. If for the succeeding year.000 d.000.P10.800. P2. 436. 2005 amounted to P600. benefit expense for 2006 of P60. P123.557.000 c.000 · Accrued benefit obligation.000 How much should be shown in the balance sheet of DauzDos as Prepaid or Accrued benefit cost? a. at cost Additional paid-in capital Retained earnings All subscription receivables are due in year 2004. and the actual contribution made as of the same date amounted to P650.000.000 The following info are available pertaining to the defined benefit plan of DauzDos: · Unamortized actuarian gain.000. P243. authorized P20 par Unissued common stock Subscription receivable.000 2.000 380.000.000 3.000 4. accrued benefit expense of P10.000 · Fair value of plan assets. authorized P0 par Unissued preferred stock Common stock. the entity contributed P60. this will result to a.000 1.000 The agreed annual contribution to the defined contribution plan is P120. 11.000 b.BoyD’s retirement benefits expense for the year is a.040. stockholder’s equity of Hollow Corporation? a. The accumulated required contribution as of December 31.000. benefit expense for 2006 of P 70.000 c. preferred stock Subscription receivable.
000 1.000 d. The stockholders’ equity of May Co. 2007: Preference Share.000 shares of 5% cumulative preferred stock. d.000 760. 720.Preference 80.000 shares of common stock.000 P300.500 Ordinary Share.000 50. no par value. 12. Bonds payable Additional paid-in capital on common stock Donated capital Treasury stock at cost Common stock. stated value P40 per share · 10. 2002 balance sheet? a.000 820.2002.400.000 Paid-in Capital in Excess of Par .000 . 2003. 13.b. These subscribed shares were paid for on January 4. par value of P10 per share During 2002.040.000 70. 2002.000 and 6. Magic Lamp issued 24.000 100.000 135.000 40.780.296. with following authorized capitalization: · 40.000 1.000 shares of preferred stock were taken at a purchase price of P17.000 1.200. 11. revealed the following on January 1. What should Magic Lamp report as total contributed capital on its December 31.000 860.000 11. P15 par value 525. c. 1.000 Compute for the Stockholder’s Equity using the following data.000 The Magic Lamp Corporation was incorporated on January 1.000 c. on December 19. c.000 15.262. In addition. b. subscriptions for 2.000 shares of preferred stock at P16 per share. b.000 shares of common stock for a total of P1.000 500.760.000 20. par P100 Common stock option warrants Investments in marketable securities Additional paid-in capital from treasury stock Retained earnings a. P100 par value P230.330. d.
000 12. b.000 900. P0.000 c.000 P104.600 shares of its p24 par value stock for land.000 40.755M 275. the land was appraised by an independent appraiser at P100.000 On July 1. Earnings per share is P40. 120.000 Corridor Company issued 6. as compensation for 1.000 7/1/07 Number of shares reacquired but not canceled 5. Boom is currently trading at the stock exchange at P45.000 5. usually bills P500 per hour for legal services. P1.000 1/1/07 Number of shares issued 60.400 P100. Boom exchanged 2. P1. 2003. 60. Max L.000 shares of its P10 par common stock to Max L.000 hours of legal services performed. d. 150. d. A few months ago. 2007.000 3.000 12/1/07 Two-for-one stock split What is the number of shares of Queenie’s ordinary share outstanding at December 31. By what amount should the additional paid in capital account of Corridor Company will increase as a result of the issuance of those shares? a.000 b. P0.000 P117. b. On this data of issuance. Queenie Corporation was incorporated on January 2.000.115M d.000 d. c.3055M c. c. the stock was selling at a public trading at P150 per share.Paid-in Capital in Excess of Par – Ordinary Subscribed Ordinary Share Retained Earnings Notes Payable Subscription Receivable — Ordinary How much is the legal capital of the company? a. 115. 2007? a.000 190. 110.000 440. The following information pertaining to Queenie’s ordinary stock transactions: 1/2/07 Number of shares authorized 80. How much should be debited to Land account? a. P 62.000 400.76M b.000.000 .
000 The following events occurred in 2007: May 1 1. reported the following in its statement of equity on January 1.13. Inna issued 3. 220. How many shares are issued and outstanding at December 31.000 .000 of these shares at P50 per share. July 9 10.0900 d.000 20. P108. 220.000 P42.000 40.000 d. 2007? a.000.000 P6.000 15. par P100 Common stock option warrants Investments in marketable securities Additional paid-in capital from treasury stock Retained earnings P300. P102. Bonds payable Additional paid-in capital on common stock Donated capital Treasury stock at cost Common stock.000 shares? Treasury Additional Retained Common Stock Paid-in Capital Earnings Stock a.000 shares of treasury stock were sold for P10. PS par value.000 and 106.000 50.000 Total shareholders’ equity P2.500. P108.000 Retained Earnings 516.516. Inna uses the cost method to account for its treasury stock transactions. During 2007.000 P 42.000 500.000 P2.000 70.000 100.000 P 42. 5. 200. P144. Jennifer accounts for treasury stock under the cost method.000 b. In 2006.000 shares at cost 40.000 Additional Paid-in Capital 1.000 b.000 and 212. 2007: Ordinary Share.000 shares issued P 500. Inna Corporation acquired 6.000 shares of previously unissued ordinary share were sold for P12 per share.000 and 216. 110. What accounts and amounts should Inna credit in 2007 to record the issuance of the 3.000 Less Treasury Stock.000 c.000 shares of its Pl0 par value ordinary shares at P36 per share.000 Compute for the Stockholder’s Equity using the following data.000 14. October 1 The distribution of a 2-for-1 stock split resulted in the ordinary share’s par value being halved.000 shares authorized.476. 100.000 c.000 and 95.000 135. 100.000 P6. Way Co.
000 Additional Paid-in Capital from Treasury Stock 3.000 shares P100.000 25. 2001.000 b.000 Treasury Stock 20. b.000 25.000 Treasury Stock d.000 .000 Retained Earnings 5.000 Treasury Stock. 2005. P100 par. Cash 20. On July 1.000 3. 110.000 .000 Premium on Capital Stock 2. what amount of liability should be reported by X pertaining to stock appreciation right? a.000 shares issued and outstanding. 240. divided into 100.000 Retained Earnings 75. Prior to the split.000 The whole 200 shares of treasury stock were sold for P20. 20 d.000 820. c.000 d. After the split.000.000 credited to capital stock.000. The market price of the stocks was P25 and P28 on December 31. Following are shown on the balance sheet of Pay Company: Capital Stock. Cash 20.000 Additional Paid-in Capital from Treasury Stock 3.000 760. 720.000 TREASURY STOCKS 15. 160. Alto had P1.000 Retained Earnings 2. and the rights are exercisable in 2003and 2004. 200 shares at cost 25.000 stock appreciation rights enables key employees to receive cash equal to the difference between P20 and the market price of the stock on the date each right is exercised.000 25. Cash 20.000 860.000 Premium on Capital Stock Additional Paid-in Capital from Treasury Stock Treasury Stock c. The service period is year 2000 through year 2002.. d.000 c. 10 c. 50 X grant of 30. 2 b. 1. when the market value of stock was P100 per share.a. respectively. 2000 and 2001. 165. How would the resale of the treasury stock be recorded? a. Alto Corporation declared a 1 for 5 reverse stock split.000 Treasury Stock b. the par value of the stock is a. Cash 20. As of December 31.000 2.
Net income for the year was P850. 100.000 b.000 70 Reacquisition and retirement of preference 2. The Powerpoint Corporation has two classes of stock outstanding: 9%.RETAINED EARNINGS/DIVIDEND On May 31. 2007 balance sheet were: Preference Share.000 c. How much should be the amount of Preference Share shown on the December 31.160. During the fiscal year ending December 31.116. 2006. the company had the following equity transactions in chronological order: No.000 outstanding shares of P20 par value common stock was P80 per share on that date.000 shares 7. P1.000 . P1. What amount should Ball credit to additional paid in capital for this stock dividend? a.000 Dividends were paid at the end of the fiscal year on the common stock at P1.000 P28 Issue of ordinary share 35.000. The stock dividend was distributed on July 31. 0 b.000 80 Stock split 2-for-1 Reissue of treasury ordinary share 5.000. P1. 300.000 d.000 shares P1.20 per share and on the preferred stock at the preferred rate. Ball Corporation’s board of directors declared a 10% stock dividend.200. 2007 balance sheet? a. 2008. of Price per Shares Share Issue of preference share 10. Preference 400.000 52 Balances of the accounts in the shareholders’ equity section of the December 31. 50.000 Ordinary Share.000 d. 180.000 Paid-in Capital in Excess of Par.220. Ordinary 1.000.000 30 Purchase of treasury ordinary share 5. whn the stock’s market price was P100 per share.000 16.140.000 Paid-in Capital in Excess of Par. 206. P1. P20 par Preference and P70 par Ordinary.000 Retained Earnings 550. 240.000 c. The market price of Ball’s 30.
Quebec Corporation. declared a 30% ordinary share dividend. 2007. 2007 and debit Interest Expense for P7. Assuming that 60% of the warrants are exercised and the remaining warrants expire. 2008. Fractional Share Warrants Issued 15. Debit Retained Earnings for P100. 2007. but was temporarily short of cash. 2006. Quebec declared a dividend of P100.17. Mitz Co. The notes. 2007.000 on April 1.000 ordinary shares. and issued promissory notes to its stockholders in lieu of cash. Debit Retained Earnings for P110.000 on March 31. The directors of Pete Corporation. 19.000 of the Retained Earnings balance.000. the entry to record the exercise and expiration of the fractional share warrants is a. and desires to capitalize P945. 2007 and debit Interest Expense for P10.9% c. At December 31.400 c.000 Ordinary Share 3. On March 30. c. Sine Co.600 PIC from Forfeited Warrants 11. 2007.000 on April 1. a calendar-year company. 2007. 18.000 on March 31. 9% 20.000 shares are now held as treasury. How should Quebec account for the scrip dividend and related interest? a.000 shares of P100 par value 8% cumulative preference shares and 30. b. Fractional Share Warrants Issued 15.000 Ordinary Share 9. Cash dividends declared in 2007 totaled P300. Mitz Co.000 18.000 b. To accomplish this. had a maturity date of March 31.000 PIC from Forfeited Warrants 6. 15% d. 2007. In distributing the stock dividend.500 on December 31. The amounts paid to preference shareholders and ordinary shareholders are: . dividends in arrears on the preference shares were P80. d.400 d. whose P50 par value ordinary share is currently selling at P70 per share. 12% b. Shares were selling on the market on this date at P25 per share. Fractional Share Warrants Issued 15.000 on April 1. The par value is Pl0 per share and 180. Debit Retained Earnings for P100. 2008. has issued 100. issued fractional share warrants totaling 600 shares.000 Ordinary Share 3. have decided to issue a stock dividend. and a 10% interest rate.000. Fractional Share Warrants Issued 6.000 shares of which 10. had outstanding 20. Pete has an authorization for 250.000 Ordinary Share 15.000 on April 1. had sufficient retained earnings in 2007 as a basis for dividends. 2008. the percentage of stock dividend that the directors should declare is a.000 shares are outstanding.600 PIC from Forfeited Warrants 2. which were dated April 1.000 shares of P50 par value ordinary shares on December 31. Debit Retained Earnings for P110.
2009 by grantees still in the employ of the company. 20-year. 2006 and 2007.80 d. 2007.40 c.80 WARRANTS 22.Preference by Nanette on the issuance of the stock? a. P40.000 and P80. P62.000 23.000 and P220.000 P240. P18. At December 31. P80.a.000 P160. 2006.000. Tools Company granted stock options to key employees for the purchase of 20.000 shares of 6% cumulative P100 par value preference share for P434. P0 c. P20. The market price of Tools’ ordinary share was P33 per share at the date of grant.000 bond had a detachable warrant eligible for the purchase of one share of Maine’s P50 par ordinary share for P60. 10% bonds for P2. P160. respectively? a. Cash dividend declared in 2007 totaled P108. Each preference share carried one nondetachable stock warrant which entitles the holder to acquire at P17. 2007? a. c. Nanette Corporation issued 4. At December 31. one share of Nanette’s Pl0 par ordinary stock.000 b.000 shares of P100 par value 12% cumulative. Each P1. On July 1. What are the amounts of dividend per share on the preference and ordinary shares. Eagle Company had outstanding 4. fully participating preference share and 20. b. Immediately after the bonds .00 and Pl. P18. 2007.00 and Pl. the market price of the preference share without the warrants was P90 per share and the market price of the stock warrants was P15 per warrant.000 b.000.120. No stock options were terminated during the year.000 P220.000 and P60.000 shares of the company’s ordinary stock at P25 per share.000 24.000.000 d. P8.000 of Pl0 par value ordinary share. P80. What is the amount credited to Paid-in Capital in Excess of Par. Maine Company issued P2 million.000 d. P34. On March 2. 2007.00 and Pl.000. How much should Tools charge to compensation expense for the year ended December 31.000 21. 2007. P20.000 and P140. P0 c. d. On May 1.00 and Pl. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1.40 b. dividends in arrears on the preference share were P24. On March 2.
50. How much is the book value per share of common stock? a.000 c.000 d.000 1. Maine’s securities had the following market values: 10% bonds without warrants — P1. How much would be the book value per share on common stock? a..27 d. 50.00 b. the preferred stockholders would receive par value plus premium of P10/share.00 d. P100 par value.000 shares authorized and issued. 126. . 30.000 shares.000. Ordinary Share P50 par — P56. The stockholders’ equity of J Corp. shows the following balances on December 31. If E Corp were to be liquidated. Below is the stock holders’ equity section of P Preferred stock.80 b. 44.000 APIC………………………………………………………p300. 5. What amount should Maine record as additional paid-in capital? a. 130.00 c. total liquidation value. P0 BOOK VALUE PER SHARE 1.50 d. P40 par………………………… 400. Dividends in arrears are 2 years.000 Common stock. 125.000 2.000 500. P80. P40.000 c.000. 29. 480.000 shares.were issued. P100 par……………………P500.040.000 Diviedends in arrears on the preferred stock amount tp P50.000 Common stock. What is the book value per share of common stock? a. 30. Warrants — P20.P 700. authorized and issued Donated Capital Retained Earnings All preferred dividends have been fully paid. E Corp. 102. P100 par…………………… 600.000 shares. 2003 shown the following balances: 10% Preferred stock. P120.000 Common stock.000 Retained Earnings ……………………………………….00 3. The stockholder’s equity of S Corp.000 4.000 shares issued and outstanding. P10 par. 59. 6.500. no par.500. 24.s balance sheet reports the following stock holders’ equity: 5% Cumulative Preferred stock.000 shares issued and outstanding……………………………………………P500.000 b.000 b. 7%. 5. on December 31. 28.80 4.200. P500.68 c.000 shares.000 Retained Earnings………………………………………………. 60. P3. 300 P3. while the 12% preferred stock is non cumulative and fully participating.000 The 10% Preferred stock is cumulative and fully participating.000 12% Preferred stock.000 APIC…………………………………………………………… 320. 10. P100 par.
80 d..000 Common stock. 30. at cost………………………. 2006.000 Retained earnings…………………………………………….000 shares……………………. 3. 20.000 10.500.000. Will Company had 500. 2006.000 shares issued and outstanding 2. 1. 720.. In its December 31. What is the number of hares that should be used in computing diluted earnings per share on December 31.00 b.000 . an additional 120.000 Treasury stock.000.2003: 10% Preferred stock.000. 600. with liquidation value of P110. 2006 income statement.000 shares of common. 600. cumulative and non participating.000 Ayos reported net income of P5. P50 par.660. 1.000 shares of common were issued for cash. what amount should Ayos report as basic earnings per share? a.42 d.20 c.000 Subscribed Common stock………………………………….000 of 8% convertible bonds outstanding at December 31.000 of common. assuming preferred dividends are in arrears since 2001? a.000 Subscription Receivable…………………………………….000 What is the book value per share of common stocks. Ayos paid no preferred dividends during 2005 and paid P160. 149.70 c. 24. 24.P2.14 EARNING PER SHARE Ayos Company had the following capital structure during 2006: Preferred stock.000 shares………………………………………. 25 At January 1. 2006. 4% cumulative.000 c.000 shares of common stock outstanding. P100 par. P100 par. 144. P 100 par. 155.000. 25. 200.000 APIC……………………………………………………………. 2006.000 b 630. 161. 24.000 d 530.. 5.580.000 in preferred dividends during 2006.400.000.000 for the year ended December 31.000 shares Issued and outstanding Common stock.000.50 b. Will also had P4. which are convertible into 100. On October 1. 2006? a.
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