MS final pre-board examinations (May 2011 batch) SOLUTIONS to SELECTED MS ITEMS 1. Regilired cash flow from year 3: 600,000 ~ 240,000 ~ 210,000 = 150,000 (150,000 + 200,000) x 12 mos. = 9 mos. 3. Profit = 20%; Sales = 100%; Cost = 80% Markup on cost: 20% + 80% = 25% 5, A Income = A Inventory x unit FEOH 5,000 = (20,000 ~ 18,000) unit FFOH Total FFOH: 2.50 (20,000) = P 50,000 = 15 = 1,200 units (1,200'+ 2) + 300 13. Unit variable costs (slope): AY + AX (1,392 M ~ 1.088 M) = (120,000 - 80,000) 14, SR: P 3,600,000 + 240,000 15. SHSR: 21,000 hours x P 15 per hour 416, AFOH (V): 214,000 SFOH (V): 21,000 (10) 17. AFOH (V): 214,000 BAAH (V): 21,600 (10) 18. BASH (F): 100,000 SHSR (F): 21,000 (5) 19. PV Factor: 300,000 + 58,500 = 5.128 21, BEPunes £80,000 = ixed costs + unit CM 160,000 + 225,000 + x) +(25 - 16) 22, Du Pont: equity multiplier = 1 + equity ratio 23, Bank 1: 12% Bank 2: 10% + 80% = 12.5% Bank 3: 11% + 89% = 12.36% Finance: (11% + 6%) + 94% = 18.08% 24, EPS = (250,000 ~ 50,000) + 50,000 25. RoE = (250,000 ~ 50,000) + 500,000 27. Learning curve: 9 mins + 10 mins = 90% Total (8 tasks): 8.1 (90%) x 8 29, (1(110%) + 25(95%)] + 10% 31, [12 x 4,000 (60 ~ 40) ~ 880,000] x 30% 32. BEP sane = 880,090 + (60 ~ 40) 33. (880,000 + 320,000) + 33.33% 34, New VC: 40 + 20% (12 + 16) 45.60 35. If: PI > 1.0, then: IRR > cost of capital 36. ABC: 10% (2,000) + 5 (20) + 12 (100) + 800 (25) + 100 (10) = P 22,500 Traditional: 800% (2,000) = P 16,000 38, Product X: 25 + 1 = 25 per hour Product ¥: 40 + 2 = 20 per hour Maximum CM: 25 x 3,200 hours 40. May purchases: 100,000 + 35,000 - 20,000 May cash payments: 60% (115,000) + 40% (30,000) 115,000 42. 95,000 + (23,000 -20,000) - (85,000 - 70,000) 44, DL Variance: 4,000 U + 18,000 F = 14,000 F Payroll: SC ~ Variance = P 342,000 - 14,000 45, MCE ratio: 3 days = 12 days 47. Wed. Ave. unit CM: 2 (75%) + 1 (25%) = 1.75 BES: 280,000 + 1.75 = 160,000 Product B: 160,000 (25%) P 6 49, 9.66% = 70% (x) + 30 % (14%) Tax rate: 100% ~ (7.8% + 12%) = 35% Si. Payout: 40% =P2+EPS EPS =P 5 Price-earnings ratio: P20 +P 5 = 4 times 54. Constraint functions: + Non-negativity constraint: B,C = 0 + Wood: 8 + 2C = 10,000 + Plastic: 28 + C < 10,000 + Direct labor: 28 + 2C < 12,000 56. 110 + (360/1.5) - 2(30) 57. 160,000 + 30,000 + 35,000 58. 40% (190,000 + 5) x 0.909 ‘89. 20,000 (40 ~ 30) x 60% x 3.791 60. 35,000 (0.621) - 35,000 62, [60,000 (32 ~ 18)] 25% - 80,000 63.10 + 4.50 + 230 + 3.20 + 1.70 + (9,000/20,000) 64. The production costs, though variable, are considered irrelevant because they are historical (sunk) costs. 65. Continue: (P.43,000) Cm: 60,000 (2/12) 30% (32 ~ 18) = P 42,000 Fixed costs: 60,000 (2/12) x 8.50 = P 85,000 Shutdown: (P 5% FFOH: 60,000 (2/12) x 5 x 60% = P 30,000 FSBA: 60,000 (2/12) x 3.5 x 80% = P 28,000 66, 10 + 4,50 + 2.30 + (0.75) 5 + 1.20 (1/3) 67. (70 ~ 60) x 40% x 1,000 units x P10 OR Old AR balance: 10,000 x 34 days = 340,000 New AR balance: 10,000 x 30 days = 300,000 68. Year 21: 20,000 + 500,000 = 4% Year 20: 20,000 + 400,000 = 5% 69. Year 8: 100% Year 16: 160% © 400,000 + 250,000 70. 8V, inflows 10,000 (12.849) + 20,000 (19.523 - 12.849) PY, outflows 1,000,000 + 200,000 (0.980) NPV: 261,970 ~ 1,196,000 = (P 934,030)ReSA ‘ “The Review School of Accountancy ‘SAMPALOG, MANILA, PHILIPPINES Solution - Final Pre-Board Examination (21" Batch) 1. D-Compreheriive income before tax (283,000 /08%) » 420,000 Unrealized gain (520,000 ~ 400,000) (120,000) Gain thom. la oF PPE; (280,000- 200,000) ($0,000) * Patont amorttzation, (425,000 - 100,000) 125,000 PE Depreciation (1,750,000 - 420,000 -200,000) 130,000 Selling & gen exysivses other than deprrciation and amortization 960.000 Gross profit 7,465,000 i Cost of ales 2,130,000 Sales 3,595,000 ‘Trade receivable beginning ‘840,000 Trade receivable ending, 780.000) Collection of trade receivables B655,000 2. B Balance per book EE P183,500. ' Cash sales for 2012 recorded in 2011 (24,000) NSF (9,000) Undelivered check 11,200 = -Bostedated check . (6,800) ‘Cash resirited for non-current purpose (40,000) Personal chock $490) Adjusted ‘Pi2,500 Bank Book 3, BTotal 932,600 P922,000 Outstanding checks ~ June (255,000) July 200,00 NSF —June 18,000) July 6,000 Service charge June (1,200) duly - US of disbursements (OS of disbursements 3.000) Adjusted disbursements P927,6() 7 4, D_ From 201 | sales (P800 x 600 4 : From 2012 sales (P80O x 700 ‘Votal unearned servlee wontraet ator December 31, 2011 © anern of Realized Revenue in Percentage 2009 2008 2 1 40% «4 20% 20% 36% Ys . 18% WY .24%x . - 2010 17.40% 4 : 0% ron : Fl 5. D Note payable Restructured debt 6,600,000 /114% Gain 6, B Beginning balance COverstatemnt of depreciation, net of tax P3SS,000 x 68% Not income ‘ Dividends i __ckans on trensury (50-35 x 5,00) shares) ee Ending balance £ ; PRACTICAL ACCOUNTING 1 — FINAL PRE-BOARD EXAM. (April 10,2021) Page tof?7. B Payment P214,s00 Prepaldheglnnny 000 EO Aaa oe 12,000 Prepaid end ( 6,000) Accrued beginning 8.990) Expense Paisae & ¢ oo i, 10. A Investing: AX, juiston of PPE (150,000) SaRof PPR, =-40.000 (110,000) Operating: Depreciation 40.000 Neteash exon “E7000 11. 460,000 ~250,000 x 30% = 45.000 A Bo a B is. D Book value of Notes payable: Principal 2,000,000 Accrued interest ~ 180.000 12,180,000 Less: Hook value of machine: Cont 3,900,000 Leak: Accused! dprectation 2.210.000 1,690,009 Gain on derecognitlon of financial Habitity P_490,000 16 B ‘Accumulated losses ¥35.000000 7, Reduction of inventory 3.sona0 7 Writ-down inthe value of intangible assets 6'300,000 Wltedovn inthe value of plant asses 000, Unrecorded ibis 3.000.009 - Total df 53,000,000 Less: Balance of share premium 30,000,000 Reduction the value of share capital 23,000,000” me 18D Date Int Eamed Int Income Amor. Book Value av0108 ° ° ° 5,386,300 125108 00,000 269315 30,085 5385,615 wo Inerewe In ie va es tina point of scot de pce change 100 (05.250 —15,000) 125,000 10(PS.350 Ps400}, 500 1O(PSE00. 1 SuO) wd Toval Pro wd. Increase in fir valu les estimated point of sale cost due to phynical change! 100 (25,000 5.250) 75,000 10 (P6,000~P5.350) 4,300 10 (P4,000 - P3600) 4000 10 x03,500 : 35.000 Total ELns00 aA 22. D 360,000 - 50,000 — ,000 + 8 years 23, 832,000- 18,800 7 : 25, A 1,010,000 (2011) ~ 995,000 (2012) 26. B IAS 40 par. 35 requires changes in fir value to be recognize in profit and loss, while par, 36 requis apreciation under the cow moll 10 be mieanured recoxiling (0 AN 16, 8 4 and and buds lease shod be seyarated ino ts two components: the land component which wil ssa be classed us wn yperati lease: ad the buds compomerd which In this case extends to the on of the building's estimated useful life and should be lassified as a finance tease. The annual rarial a Benen thet eases proportion tv the rola fr Wales uf the tw leasehold Interest 208 (2.8 million ~ P6.0 million) as is % of P?.3 million) sf the rental is. ‘aliributable to the land, so P160,000 28. Under 1AS1? par 20, assets held under fhunce leases are capltalved atthe fle value on, lower, thé 82 resent vale othe minimum lease payments: PRACTICAL ACCOUNTING 4 - FINAL PRE-BOARD EXAM, (April 10, 2011)29. 3 M. a8. 36. 38. 40, al 2, c £ This ts fn teuve, becuse the leave term the sume ux the ateet's usaf Ife, The Lease lability for 6 Aihance lease js the fair value of the lease tem a the start ofthe lease, reduced by lease paymants mcve.and increased by fiance charges at a constant perlodic rate, Le. the Interest rate implicit In the lease: See 14817 poras 20 anil.°5, With lease payments being made In advance, the ende2012 calculation ts (P490,000 = P7000) : € The Ines to he recognised are the excess nf opening actuariol losses over the greater of 10%6 of opening plan asses and 10% of opening plan lebiltes this excess being divided by the average working liver af partteipatinys vmploy JAS19 paras 92 and 93. The amount to be recognised is (P120,000 less. (Ht * P900,000)/20 years PL,S00. A The correct answer (s that the plan assets und unreceymised actuarlal lows are deducted from the plan lability, See ASTY para $4. c The defined benefit latility is the P40 million defined benefit obligation plus the P8 million actuarial gains lexs the P6 million pest service cost not recognised less the P10 milion plan assets = P32- million, See 1ASI9 pare SA. c See 14S10 para 22(d, This ta nonvadjusting event after the end of the reporting perlod and thus the proft before taxation ts unchanged from the drift financial statements. i F ed CP400,000— 10¥4(2, 10,0000) ga € 1,100,000 - 440,000 2 : C D oe The protonged decline below cost and the financial difficulty of the issuer are objective evidence of Impairment, See IASI9 paras $9 andl 61. The lass previously recojntzed in other comprehensive Income (P40) should be recognised in profit or lass, together wlth the current year ss (P40) c There isa legal oblizatian to allocate profis to the bonus pun. An allocation should be made at the halfway stage (fi is expected that the required annual profit will be earned and there I a way of caleulating the amount of the allocation reliably. Ic is expected thar proft will be more than P30 million, The business is ‘obviously seasonal, but revere und cuss can onty be deferred (umouthed) at the interim stage {f they would be deferred at the end of the yeur, So the allocation is 3% ofthe PD million interim profs, A Exploratory dellon: is an example of espeniture that cun be related ta the finding of specif. minarel rescurces (IERSO para 9% lnfiustructure costs: should ru be’ recognived ax infrawrrwotwre:aeaety Buta. property, plant and equipment im accordance with IAS, Development axpenditres should nok ba Pecogized: in exploration ascets (HRS para 10). en ¢ Trenchlag and sampling expenditure isan example of iatunglble assets. The deprectation ralading to a tangible asset used to develop an intangible axset ly prevented as an Intangible axeut. However, the remabning carrying amount ofthe tangible asset i sill clessfied as a tangible asset (IFRSS para 16) a c oe ‘The correct anvwer Is: reduce Inventories by P150,000, reduce retained earnings by P$50,000; Ses. 22, The reduction in inventories isthe parent company’s interest % x profit on inventory earned by Retained earnings should be reduced hy the same amount. :ReSA PRACTICAL ACCOUNTING PROBLEMS IT Solutions to Final Pre~Board-21"* Batch ‘Units |” “Uhimate ~ | Total Ui | “Addiional | NRV7 Hyp, | %oTIC TS Produced | MVperunit | Mat Val, | Proc. Gost | Mark Val. | Ind. MY Palo T2400. | P3500 P 60,000. P 24,000] P3600 | 45/40 50.00 £60,000" 36,000 24.900 45/60 nanan | eaooo | eaaiooe a 2. (A) = tradirional / conventional mathed: 3 (H) © ADM rent Ina: 154,006 / (5 4 15 mattLale mova) » P2,$00 per: AW na he ut ve 40/009 / (200 Dhl + 200 DLA) = P1265 por null x 200 OLA P25,000/25 units of Wall Mirror = P1,000 per unit storlals move of wall mirrors = 12,500 / units produce » PS00 nde Us roclpeneal method, simultaneous equations are’ develsper! (a de Ww total costa of each service department, taking inte gccounté they int at Hott ollie ‘wrvicw’ doy urunante providihy sueviee te Sothae’ depec omits intunance, the cost in PU, 700 plus 108 of the utilities coat ayplivd Go A and 108 10 Th, The 26% Fhat has already beet Uie, 408 ot ehga same Joparimect In 2ortocted La the ast of almttaneous equating: : Hi oe is — ives [Heten 7] linadjusted capital P59, 6251- Tad (deduct): adjustments: =e onbiful Sccounta (3 of A/R)_ oF) _Undeuptatomane of depruclation ‘Adjusted capliat 6. [OLR By Wen Tea evae) (assets 4 *366,000 | yreai0, 000 Tabi law ee co Pap Usil rit), uae Lo boo Wola: 1220, 000 » 120, 000" = 366, 000 4 Now: 140, (10% « P50, 000 + P20,000, intangibles + P120,000 nw Rowe, capital: 40,000 = (792,000 x 408) = P43,200 Po thburcut pad iyested oSat vit ph eta igiven) ¥P54,000 + P29,000 + P240,000 = P323, 007 *#P54,000 + P35,000 + P240, 300 m.P329,000 i 8.) Dig (rate value 2. «B) Direct materials inventory, June 1, 2012... Auk: Punehas Oireck materials avallable for use...... Direct materials Inventory, June 30, 2012.. Dinoet maar lala mig eee ercee ences byeect Labor (4,900 house x PB/NOUED ve. Applied factory unread (9,900 hours x ¥2.S/hour)...... Manufactuizing cost... Add: Work-in-process, Jur 41,2012 Total work placed Ln process... ess: Work-in-progess, dune 30, 2012... Goat of queda manufactured,16. 13, uM. 1, 16. a Avurayo capltads : ue X P100,000 x § = P600, 000 P160,000% 6 = 960,000 P1,560,000 7 12 » P130,000 Yr (same with buginning capital). smweee 180,000 2: P225,000 x 9 = P2,025,000 es 155,000 x I= 465,000 P2,490,000 / 12 = .202,800 4 baB?, 800 Ar Untereste Fable nwne 7 108 £ Interests on avecage capitals. Ei @), x LLL 15; 900 06 Thstalinene Sp len hogo: Collect lone ‘fv 2010 Tast Accounts Receivable, Uecembet at) 2010” : [Multiplied by: GP Rate (Deferred Grown progli, December 31, 207 w 2 Tnetalinent daiwa Sraereeeeeceeere Less: Collections In 2010 Collections in 201i inal Accounts Receivable, December gl) SOUT Multiplied by? GP Rate [Deierreu"t ous” protit;becenber 31, 96IT Deferred {toss Profit, December 31, 2011 for 2010).Sales, : 201) Sales Total renee ae (2) Appraised valuecmn. Less: Unrecovered cost: Unpaid balance - 20i0, has : Dafarrad qroan profit = 2010 [P, 000% 16C 1400) nen Gain On Lep0ss0851 AM. tennmmnnnnnnn in ordals: P400,000 / 100,000 P 3.00 thors PIM, 0007 2,000 = 2s Overhead: PLO, vou / U4,000 = Li2d Gost. por equivalent unit rer a: Unite tranitacred 0,600 Wola coal Ur anisroy te "vase! 004 FIFO/Averago Cutting Department Retval ~~ [ar e06 re —Lasg.cng} ‘Agcourited For! “Rea waiP, beg, FTF =e “a, Fond ae aoe TOUT IP end 20, 000-[ “1008 agc009 () enter to Ho, 1 tor turther con Wock-in-peocess, ‘ending: Matorinisz 20,090) x P2.00 = P60,000 Vane: 12,000'x ¥2-00. "= 244000 © herheate 4,050 2 13a acang yu, uaywe 18. 1. 20 al a. 28. 2, a) @) Unit cost from preceding department: £496, 000/00,000.. e Cost per equivalent unit in the current departmen Waterials: P118,500 7 79, 000... 1.50 Labor: P203,500 775,400 crn é Ovortiead: B75,020 7 66,200. Belo 51304 cos: per eaiivalont unit. Fao He URLES CPUNALOE FAs een 66,00 Yolal costs Leanstocted €6 ELLehed OCU mnie Hage.a0g O/Average ~ Smoothing Department 1s oe WH | one] Receives 7h 500 rl : | ‘Kecounted For: etual iP, ay, Fe Be: = Ry Rand 60,000 | sna g,000 i “AbnoeNal To 2a [aoe ono | (A) refer to No. 17 tor further computation. m artory Overhead / Expense Cost feom precidiny department: (1 Cost this department Ma.orials:'1,000 x PL. S0.eancsarom La'or: 1,000 X P2.70.umu Ove-fiead: 1,000 x°P1.10.. 20 x 2,000, a : Factory Overhead / Expen Cost fuim preceding depattiment: 6.20 x 18, 000..ncuum, Cost this departmen Sh Janae Matorlela:” 16,000 x PL-5Qncsemuen 927,000: dabor: 14, 400'x P2.70 Overhead: 7,200 x Psi ¢ - P500,000 ~ (490,000 - P4000) = P104,000 © = 2,000 x (13.00 ~ P).00y ~, b4,000 (wy Nuinber of unika = (53, 400/16.00 = 2,400 {aH ~ (2,100 x 25] x P2,60 = P2,080 U7 AH ~ 5,000 () = (24.00 x AQ) = (2,107 -* P40) + POO AQ = 2 225 (a) ~ use T-accomts if possible. Inatallaant a/R, 12/34/2004: (F100, 000 / 408 Leow: Installment A/K, 12/31/2010 (given) Decrease in Installment A/R un : LOSA: DBLAUTES or sarn Collections in 20 22 GP FACE nnemnenors ~ : sete oat baer grou profit on inatallment salen }9 2010. «cr 2 Fair value after recond}tkining costa and casts ta ae: ose: RecutRlLt bon Lig “GOBER! ww i Costs to sell jalwes bettie rand m val wots Unnecoweredt ¢ Unpatd, BaLaNCt nena henry pie - 200n: 2,090 x 408" GH = 2010012 PH, O00 ADEE seen Vngecoveved eos i : Net loan, au: PUOU/ be, JU 40% panes p2,400 7 P6,000 = 40% a Books of M uv 2009 P 6,090 400 M, capttal Joumal entry for entiemant shouldbe eee earl 900 «. 750_| 1,650. 900 i: meas wu at 32 a3. x Boo.cs of N Books of O wv N. capital W capital 900_| 1,650 750 "750 900 » | 1,650 750 eae i: 1,650 Completed untte/units produced Irid Work-ba-pioe Thales hws , ending (300 x 40) : Work-Lnepracess, beginning { 1,250 x #00) Equivalent production for dune, FIFO... Or, altarnat Lvely: Aatual In pereeis, begs, 1,280 Larted, PoP (2,790 © 4,350) 1,500 In proce end $00 ‘ aaa 2,208 Cost per equivakent units: PB 264, 000/2,000 BS Ae isl pl ied byt Mor kelneprogeam end Lin fase: Cost of In-process, ending . RAO Under PLEO method, ‘pompleted units, ost Of ending Lnventory should came from tho, i.e. from the 2,000 units, (A) © ratar to No. 2) Loe birthar compat atton. cast of Finished goods, ending P132 x 700 “paged ow Meties A and # must exch cocognize an Impalement lous of 95/000, ates see lee ‘ule “year ended Doconber 31, 901! (1. ey P300,000 coat “le9e, P6520: Fevaverahle aionnt)« Pe } Re On becenber 31, 2011 entity A must coport its fnvestaent dn entity 2 (a Jointly Controlled entity) at 265,000 (see Section 27 Inpaienent of Assets). a (@) - 308 x P100,000 loss incurred by entity 2 for the year ended December 31, 2011 = P30,000 2) Cost of Lnvestitentonnsecn Leas: Share of joint venture’s Josey. Carrying. anonat hoFoce hepai man Kecoverable anvunl, Inpatenent. Loa. (a) Gout of tavests - 7 .P 300,000 hess: Shace of Joint 30,000 eryion et Accumulated WO hetoee Lipalemant wai vmont 1 anieaunt emnnnmnB 270, 000 eB 000") eevee yao w Fide fn determining profit or less for the year ended 31 December ‘20X1 entities. jist each recogaiar an expense of P25, 000) Fate value on shtana ry Ly: 2014 same sven, 3907 300) 39: Falr value un Ducomber Jl, 20 ernnnwonenng BTS, 000 pense/loss ‘due co decrease in fatr valu " bk b2 0005 ) z ‘in December Ji, 20ff entLties A and Hemet each report thedn, investment sin-eneity f(a jointly controlled entity) at its fair value of P275,000 (noted juniike wien 2 a getty Crcoverable amount whan using the cost model (see section 27 Tapatraont of Avames); comes fo soll are not deducted from adr value’ Wen eing the fair value model. ne «) ‘AMOUNT PAL drwn rn Less! Book value of bom’, interests. Bonus to Dom. shcesaitas ve peep edyand » 1{P4oR, 000 ~ P360,000) x 258} = P95, 000 + P15, 000 = €)18,.000 Ise! 277,000 + (P48, 000 x 25K) = 109,000 Rey: PLAd,a0d + {P48,000 x 508) = P2D4, 000 a 121,000. ¢ vm2}8,000 6.000: therefore, the capital palances of the remaining partners are ad, olLo¥a “Ines PNY, O00 ~ (P6000 x 25/75} memars B87, 000: Ray: P204, 000 = (6/000, x 0/7!) nnn 200,000 : L -of OL Work-Ln-process, «nding (a0 1-190 10 1 1,000 + SU,G00 125, Ab0D P 19,880 Less: Direct Labor: ‘Job 456.. 3,000 ee Jon 789; ¥ 3,200 6,200 : E Applied fart wry “ovachaads : : “ Jott 4562 13,000 X75 ¥mnn ¥ 2,250 yee Job 785, ao 2,400 "6,200, biract material. ee eden 4 29," (I) NCI measured ot lls share ot nel assets (Partial Goodwal) Fair value of Subsidiary: Consideration transterred. jo... secre eyes aeneP- 100 Fron, Loss: Fok vc un of Ktantiiabie assets milion) _4B milion) Goodwill (partis : (2) NCI1s measure al its fa voive full Goocwil) Falr value of Subsidiary: Consideration transtorrod.. of For volve of NCI [|P100 milion - P24 milion » P76 lion / 80% = P98 millon) PIS milion x 20%. Fair value of Subsidiary... Less: Falr valve of idenilble assels and ilabttes of Oak Goodwil (ul). Uneer PERS 3 por 32, goodwil ik measured at ihe consideration franderred pls the nor-conteling injees! (however mecaurec less net assets equi. The nen-contraling nferes may be measured | 1s shave of net asso oF Hs fal valve, per PFR $3 par, 19. Note: Fair valve is assumed lo be The some with the ~anying/book valve, Euaz milion e 40. Fair value of Subsidiary - Swan Consideration transferred. verenestneeaeeP 1 420,000 Less: Fair value of ideniificble asses and liabilities of Swan trom xPi.2 milion). 840,000 Goodwil (partial. i EB B0,000 Gooduil is Caried os on oss in he Consofctoled statement of financial poston, Fair value of Subsidiary - Homer Consideration transferred. i 300,000: Loss For value of danifiobie cerels ond tains of Homer (658 x P640,000) nna AL6.0O Gain on bargain purchases. BLUGOOL 3 Gain on a beugetin porchare Noles: epte share o! the identifiable ne! aisei’al the 1, Moon measutes non-controliing intereats al the relevant ‘acquisition dete; therefore parl.al goodwill Is in effect. 2, Far value Is asximed fo Be Ihe "ame withthe carrying/bodk valve, ) Sora Linterests*= Salavies [saiance (a0) a 108 " “in exceas uF F100, 000 = lor (un 2 ion (esa, oon + 6) (e110,000 - P100,000) x 108 2 pa, ago =" 108 = bet Pa, an pa, 000 a2 : True Branch Net Income P156,000 Less: Branch Net Income reported (by the i Xs Branch) ‘Overvaluation of Cost of goods sold Cost of goods.sold fram home office at billed Loss: price: Inventory, December P 70,000 ‘Shipments.from home office . Cost of goods from, home office available for _P420,000 iy sale A400 Les: Inventory, Decernber 31 Cost of goods sold from hame office, at cost Billed Price: (P336,000/P240,000)Allowance toc uvervaluation after adjustment 84,000 x 40/140 . MM. «h : i ¥ Tora Interests ae ta etl tna Ti iy [197 80), i .. [Baymont to partners : Can Ser, Lin tng Add: Pre cemda Leom race vableda ral Tmerchandi.a aaa Lana: Payson of accounts payable. Paynont Co partner dione 45.) % 2000: v24,00U = YH = 024,000-coLlecttons x 39% 9,360. 2009: P300,000 - PHO,000 ~ P10,000 defaults = 230,000 x 424 96,600 2010: panosce0 = 170,000 ~ e960 detauita = f158/000 x 4b _gBLBN0 ettiend'gfese protte on snstalimane sales {92010 sscseesen BREED 46, (8) : Net ragale valua of repossessed merchandise P 4, s # Geen! UnESLUREe COAL T Unpa kd ba Laneievessoma : Yesa: OCP - 200: P10, 100 bor ‘ pip, 000 5,000 12%. 4,200 9: 5,000 ADR Unrecoered goat ot bain (lost) a Net loss... : 47. zee “Office Books (Branch Curcent- : br, balanoa) = cr. balance) Tadjustad balance Auld (coche) ae jut an intransit™ HO-A/R collected by DE. —Tsupplies returned fur In ranurling Bes Nt Cash sent to branch to General, Fxpense by HO | ALT, 420.) Ter 25, 000 Loo Eee Air, (B) refer to He. 47 for computation, nearest answer. Answer should ba 79,920, 49) (DL = reter by PAS 27 yar. 20-22 Carly's trade receivables, cia 1,040,000 Tily’stnuba bart livin ss ose ef, 000 Tole... iz ebsnbsten 1,285,000 L Less: intercompany receivi.ble (due from Halley). q seeavannve 30,000. F Infor company Haccivable {ae OM Coty) vse Consolidated rade receivables, i DU. (A) ~ toler to PAS 27 par. 26 : This is the perent Compony’s share of the post ocquislion retcined eamings of the-subsidl delermined by deducting (i) the parent company’s shore of the retained eomnings of the the data of acquisition tram {i} the parent company’s shore of the retained eomings of th cl the end of the current reporting perlod, pe Pulley'sratained earnings, date of acquistion.... Less: Puley's reicined gomings, end of the current ruporling per X: Controling interest Bony : Pulley's retained earings iciuded in the consol‘ated financial postion. st. @) Upsiream sales; Sellh.g price of nan-cUtEM BSUi seo Less: Book/conying value, date of sale... | Galo an intercompany $68. sw Incidentally, the eliminating entry [cssuming books are already closed} would be os taliows Relained earings ~ Parent (65% x PA0,000) se . 26,000 ee Nan-conhialing Interest (35% ¥ P40,000) 0.0 NGA CUIAAT ISM oo «PAS 27 pors: 32-21 require the profit on intragroup assels fo be eliminated in ful Onl.16 8 Gf ine profits of the subsidiary are taken to group retained earnings. ' 6his because the subsidiary sold Ie asset fo the parent, This gain is not realized from a group perspective per TAS 27 par. 2) aid must be wemoved in ful. lis then allocated weiween the alee ett ant mea of retained eamings [group share of the gain) andl the non. controling interest aD) a erat BF. i fan Seaman] + [roars intuered each year 1 78,750 Aude Goat lncurrel in _pelor yout setrerrisn = Goats inciirres to date z “eae + Tals fet imared coat 16 Goaplare fi Yotal estimated costs Bat imated Groaa Prot it (Jose) Trae, 58 HulCiply Dy. ¥ ot -complacion (15,000 TH, TSO) 7 900, 0001 T0 ae | Recognized Gross Profit (Loss) to date ua 35,000 i a Prof lt _{hoas) In prior year =O Tecogaiaed Grows Feofit (Loss) in curcel ; Hee Bea 50 ‘PIs, 000-7 10, 41677 or, alternatively: Cant parl PE Lc ae GPA (1%, 040701, 750) Bal inatert Groat Broth $4. te) Upstigam sales: Sling palew OF non CUn6RE AOL Lass Book/camryhig value, deta OF sae... seme Gain on intercormpaniy s0l0..... o sasseaneresesses1 eA QI: Incidentally, the eliminating entry {assuming books ore already closed) would be as follows." Retained earnings - Porent {75% x Pa0,000)....... 30,000 Non-controlling interest (25% x 40,000). Non-current asset... aH rasaseeenenee 40,000, ee PAS 27 pars, 20-21 require the profit Gn intragroup assets to be elininaté: full, Only the group share of the profits of the subsidiary are taken. to group” retained earnings. i This is becoupe the ‘subsidiary sold che asset to the parent. This gain ds .Ade seatiaed Fron n grou perspective per PAS2? par. 21 and must be.ronovad in fil, it {a the allocated hetwaer the sharoholdecs of the subsidiary, dn ‘hei torn::of |: ‘etatned earnings (group share of the gain) and the non-controlling interest... “a (BY 4 nt Lowistzoan alent Selling price of non-current asset lessee ess: Book/canying volUe, dale OF SO1@ se. Gain on intercompany sole... o Incieontely, the eliminating enty {assuming books are aeady closed) Keluthd ours ~Pestnt (100% x P20). rosso sesso 30D ae Non-cusrent Os8el fa 200 N21 require the profit on intragroup assats to be eliminated itn Gigre of the profits @f ee subsidiary ara. baxen£ig tat 27 4 fulte onty ths ut tetalned eariliua. This Is bocause the pavent sold the aasct to the subsidiaty. Teallzed fron a group pacspective per .PAS27 par. 21 and must be. zene) This profit would originally have been recognized 6: thare isn impact an the non-controlling interest, audit “ . 59.) 7 Fair, value sporent but & Annual depreciation expense: Roe!’ dey. eclatlon,{PBO0,000 ~ PO)/B yecss. Muldon’s depreciation: P460,006 /S. Dectease..nnne ieee tastiaiat Nel conying/book valve, 12/31/2013: . Roel's book valve: ("800.000 ~ (P800,000/8 yours « § ¥OCHS) Muldon's book valve [note]: [P-160,000 ~ (P460,000/5 x 3 yeors)] Pett assays sevnernoncne evs ustments unded PFS 3 par. 36 not reflected in the book mont bp adjusted for purpaaes of consolidation.ie (8) : since conateuctien falls -dnta two unting peciods, stage of complet (on calculations must be. performed to allocate contract revenue betwoon tha two jocounting periods (18, 2OT1 and 2012}, The revenue and costs for 2031 is as follows : eye coo ‘din peior yours [Profit a fe Pho ravenwe amet east for 2017 is : ‘ [_. 2012. its eivred we year | Te 80 500 Fri 250 | fdeit Eas B00 Peior Year | Current Year| To date pons) (zona) P2, 000. PL 333 [0 Por) Tel 4504 [iisvenue(P2) Expenses/Costs (actual costs) 250, 800 Parent Net Tneoe from oun operations: 1 (PGU, VOU US0P, DOD) unenam ness PADD, 000 3 = (240,000 ~ P300, 000)... - 60,000 & 40,000 Amortization of allocated @xC@9S*nenwe-( 8,400} | 5,600 RabG00 Contseliing/ . wot Parent’s NE on 4 + Allocated excess that was pndexvaduad on the date cf ay ago: Ea ‘yrademark: P60,000 /.20 yeara at s vatent: P40, 000 / 5 years cy, albarnal ively: . 7 outed rovangon (2900, 000,+ £400, 000). Less: Combined expenses (PS00,000 + P300,000) Con ir ad Not Tpcome, Jona Aor! bration of allecated @xcena, Consol tated Net Income. 59, (€) ~ refer cs No. 58 for computation of NicT-CHT, 60. (©) Date of purchase: 3 million baht / 2 bakt per peso nF 1) § milton’ cae ce Sheet, dalet J aihiion baht / 2.5 habe per peserem, BO MAdieM: ae Exchange Loss. a renner MELSON - 61. (0) Consideration Transit O Pred asm teent Fale vabne of nak Asmara acquirer GoGKH LL sn annem Sivided by; CURRENT RATE on’ the balance sheot for Tnrponiet of tranglation uidex the Current Rate Method. Goodwill in the Conaols oz. ye Ariccated Excess arising from consolidation. AMivielod bys CONN RATE, the balance seat for Miypeses of translation under rhe Current ate Methods = oo caVlosared Excwan lover under valuation) gon b3. CE) ~ 20 mid tion x 240.4/60.4 © 90 midline GIL (C) ~ No forward contract, thérefore, only the ee adh Pobolt = b.0002 lors «10 wi}1ion foretan ale transaction: 1 currencies * P2,000 Logs)55.) Sale Transact ion/Hedge Item ~ refer to Wo. 10 above 2,000.0 loss Nod sing Instrument /Porward Contract IP.034 = P0032 gain x 19 mU1ilon foreign currencie: = 2,000 gain x .99N6) =, Net decrease in net sncome 66. (c) nofepot onetime satus Ith "PLB rer at ass pea? hb out Option expense/ loz. 67, (D) ~ The part inventory will bo recogrizad at the spot rate ai the date. or furehase (€C100,000 x v.23 = P23,000), if the firm commitment account will, be charged to profit, and loss account (or adjustment in net {ncome account). =~" “6, {C) > The pieso'value Of the ECU receivable nas decreased from P110,000 at December M1, 20°0 Le P95,000 a February 15, 2011, This dectease of F15,000 should, ve reparted asd Foreign exchange los 3h 20) 1 i 64, (0) The meechanline purchase results iu a foreign axchange loss of P#,000,. the Mifference etweow the PRET pine pond eipuivalent at tha date of purchase. and at dates of antl. lemenk sv Fneeaie fi Uh pose equivalont oF the note’s petheipal results in # foresan onchanyye Vns ot 120, 000 She total foreign exchange loss La PZE,UU0 {L6,000 + 720,000). ? 10, (0) ~ the fenlaard cont cack must ba reported op the December 31, 2010 dalanceiahiver hi LlabitiCy. tort han locked-in Lo purchase foreign gurgencies at Fodddre epee foreign cuctoncy bt could have locked-in ko purchase foreign currenci jor foreign currency if Lt had waited until December 31 to enter into the te ined Contract, the Ko.waed comteact mat be reported at ita fair value diacountéd | for two months at 124 ((P.042 ~ P.037) x 1,000,000 = 5,000 x ,9803 = P4, 902.8 Te my ee [Contract Price dd: Change Order/varsation T 200 Guntract_ Pris Goats Inguceed ysel your” To Add; Costs incurred in priog years 7,305 ta aga, date a wa “Add: Botinated costo to complete Tire Total estimated costa 7,050. Ta inated gros proflf(isasl____, 290, muitiplied by: tof doipletton™ Gross profit (ina) to date Togs! ivan peottt Wa pelo year. foay pres |), Uona)_ eaeil year SIT 73, 0007F8, 000 = 37,508 LST PT, AOS 70N0, 140 = 708 Toss: Expenses /Coues Proflt 72. atu tuenierad to-date initaTive protite to date | [onst jon_in progress to date Tess: Progress billings to date Grosa_anount das from (to) the customer _ “EZNTE: PY, HOOT 1S, 600+ PH, TOO” » 185,000 P 23,000 5 180,000 : oud avaclable fo, aake 213, 00 OBE vipnent/Saves to Branch, 4 av cast (P11, 000/108) Lan, 000 : 1 or genidst ava Table For WO sale : 113,000 yeas: Inventory, 12/31/10 y, 000 63,000 Gren petit F 72,000 hoso Kxpunene 2,000 < San y1120,400 + 5,000, in transit *49925,400 x 10/110 6 + AB 7 nouns charged to patients Tess contéactuad adjustments, , 76. (D)= bo iated goods ang getyises are not recorded unless they would. nive otherwing een purchased and are of @ skilled nature, ES MR CD or 17. (D) 7 : foe of PACS ag ful accrual mithod is used co recognized the dndesa ie, fee of P100,000 analyze ae follows,’ : Revenue Analysis for 11 Services Teriod of, Refund [Colloctibstity —— ‘Status Substant tal pertornanue operations by the franchiens si substantial performance hae unites 45 Tonanaatal perFormange. of ald. ablignesaney/ i voluntarily, has occurted before that time, Party eee Cundliy che datttal frahchinn tee and collectinilié Chere val Lae TahIeH Cliey depend on the protitanLitey at eee iy your at © Thoratorae egutae NG “reMUle of opecationa in che fieae yous ia peovivabie, : conse gilt gitttial fxnnchise fee af pi00,000" (Peo boa, P80; 000). 4 : sree sored a8 xevanue, and & continuing franchise fee ‘of ‘se 00¢ a, “should be also be recognized ae revenue ~ continuing franchieey; 5.3: ree roe cer (lle eacned Feanchiee fee amounted co P105,000 (F b5, 000 continuing). vs 5 : 78. tc) oneurred, Ae fun 320,000 79, (B) = refer to No. 78 80, (B) 2 OL. (G)_- -tP45,000 + 1260, 000" Pas ‘000) “x abe) = P57, 00% 7 vn) Shen Blass Mant [ daTancag = 60, t bi Cae. re eceeae | 308 = = 0, 200 [ a Oot