1.

Hope Company has the following information for its five business segments:

Segment Intersegment Revenue Segment Assets Revenue to external

customers
A P20,000,000 P2,000,000 P25,000,000
B 5,000,000 500,000 5,000,000
C 2,800,000 1,000,000 3,500,000
D 1,200,000 200,000 1,500,000
E 1,000,000 250,000 1,000,000

How much is the minimum amount that should be reported by the reportable segments?

A. 22,500,000
B. 27,000,000
C. 49,500,000
D. 6,600,000
2. Pinkman Corp. has estimated that total depreciation expense for the year ending December 31, 2018
will amount to P300,000 and that 2018 year-end bonuses to employees will total P600,000. In
Pinkman’s interim income statement for the six months ended June 30, 2018, what is the total
amount of expense relating to these two items that should be reported?

A. 0
B. 900,000
C. 150,000
D. 450,000

3. Silent Company has three lines of business, each of which was determined to be reportable
segment. Silent Company sales aggregated P15,000,000 in 2018 of which segment #1 contributed
40%. Traceable costs were P3,500,000 for September to November out of a total of P10,000,000 for
the company as a whole. For internal reporting, Silent allocates common costs of P3,000,000 based
on the ratio of a segment’s income before common costs. In its 2018 financial statements, how much
should Silent report as operating profit for segment no. 1?

A. 750,000
B. 1,000,000
C. 1,500,000
D. 2,000,000

4. Pecson Company’s P950,000 net income for the quarter ended September 30, 2018 included the
following after tax items:
 A P600,000 expropriation gain, realized on April 30, 2018, was allocated equally to the
second, third and fourth quarters of 2018.
 A P160,000 cumulative-effect loss resulting from a change in inventory valuation method
was recognized on August 1, 2018.
In addition, Pecson paid P480,000 on February 1, 2018, for 2018 calendar-year property taxes. Of this
amount, P120,000 was allocated to the third quarter of 2018. For the quarter ended September 30,
2018, what amount should be reported as net income?

A. 910,000
B. 1,030,000
C. 1,110,000
D. 1,150,000

5. Vallo Company has estimated that total depreciation expense for the year ended December 31, 2018
will amount to P600,000 and that 2018 year-end bonuses to employees will total P1,200,000. In
Vallo’s interim income statement for the six months ended June 30, 2018, what total amount of
expenses relating to these two items should be reported?

A. 1,800,000
B. 300,000
C. 900,000
D. 0

6. Which of the following cannot be allocated over the interim periods benefited?

A. Inventory writedown
B. Insurance premium
C. Property tax
D. Depreciation

7. An entity shall report information about an operating segment when

A. Its segment revenue (excluding internal sales) is more than 10% of the combined revenue
(excluding internal sales) of all operating segments.
B. Its segment revenue (including internal sales) is more than 10% of the combined revenue
(including internal sales) of all operating segments.
C. Its segment revenue (excluding internal sales) is 10% or more of the combined revenue
(excluding internal sales) of all operating segments.
D. Its segment revenue (including internal sales) is 10% or more of the combined revenue (including
internal sales) of all operating segments.