I .Lh' t4!

n,
ReSA, Review School Inc.
Auditing Froblem
i
IRENEO,/ESPENILL'\
Quizzer 6 Solution Guide

85. Arc. B.
Fair Valre on Rectass date (6/3Oi14) 3,600,000
Carrying ValuVDeprEia!on Cosr (6i 30 / 74) 3_250,000
Rwal{ation Srrplss (OCI) ofr A.clas 35o.(xx)
86. AN. D.
FMV, Inv€tmert property. L?l3L/i4
CV (FMV uFDn rectas on 6BA/2OL4)
UnrealiEd holding lGj - p&L

P@rr
67. Ans. C.
Pres€nt value of the irEtallment palments at 12yo effctive mte:
Downpayament 1,000,000
Balance (|)4,000,mo/4yrE)*3.0 3 73a9) 3,037,349
Option money rBlated to prcperty acquired 3t4,779
Propety taxe6 in arrears as of Janrsry l,211^2
fniti.l @fi rrf thG plop.rty
08. Am. tr.;49. A,t. B.
Cost (Jan. 1, 2012) 4,500,000
Acom depr, Oec. ir, Zors 1+.5N./?5ys;*2ro.
DeprEciated eost
_ 360.000
4,140,000
Rccrvoatlc amfllrt,/.Flir marict valuG 4,10().(xx)
ImpaiEmem los 4{LfiXr
9(l. AiE. A.;91. Atrc. C.
R€coverable amount t2 / 3L/ 13 4,100,000
Depr 20r.4: P4. 1Ml?3y6ars r (178-261)
Carrying value, bdor6 itnpairment recoyer-y .-3,921,739
Carryirg valuc hrd thec baa no impafumt:
(P45v,*22/2s)
ImpairrEnt E@E y- p&L
92. AB. A,
PPE to IP
ff a prcperty is traBferrsl fron PPE tc, Lo, ard the FMV rcthod is usd to value Ip, any decm* on the rclBification
* dab sl4ll be
loss in rtg prcfit or tos. Anv ircre*
F?gniaTl
inthe
lnpairmffit
OCI as Rwaluatian SurplLt.s, ,.bllowing pAS 16, ppE.,
in the value, ho|ever,' on ttre rectsificalon a"i itii iLi'ir"a
Fl4V, 72/31./14 upon rLttass to Ip 4,300,000
Carrying value (D,epr- Costr p4.5t',1'2?/25) 3.960_000
Ravaluation surplG - OCI 34t).(XX)
93. Ans, O.
IP to PPE
If a popert/ is o'at,gf,enEd fnnt il tc PPE, ard tlE FMV nEhtd is usd b value Ip, any d*rease orrrcre,irs in tte nlre of Xe
prcpefty o.a l,lc tm6fer date sttai: be rccognjz$) tn the prctit or los-
Fl l,l2/31/14 uponrtrlasstopp[ 4,300,
4,300,000
Carrying €lue (FMV 12131/131
Gain on the tracfar - P&L

94. Ans. B.
Annual premium, 2014: (p8,Ooo+r zrno) 96.000
Lss: IncreGe in CSVfor 2014: (p?5,200*1/3) (8,400)
Uifeireunmesxp,,r*,2ol4 fJj-T7Effi-l
95.4re. D.
Annual prcmium, 2015: (P8,000ri2mo) 96,000
Less: Increffie in CSV for 2015 (ij.r(1,000-p25,200) (4,800)
Drvidend frcm CSV (B.OO0I
Lifeinsurancee)ees{+ 2o1s f---J-3-l--l
96. An6. C.
Annual p,emium, 2016: (P8,000t12,no) 96,000
Ls: Increae in CSVfor 2016 (p.i.t,6Co P3O,OOO) (9,600)
Dividod frcm CSV (9_600)
Ljife itrcamnee:qasc, 2016 |_--rAffi-l
97. Ans. D.
IGumrce Frmium up to date of (lath (p8,000*lomo) 80,000
Less: Increme in CSV up tc date .)i death (p50,400-p39,600)*10/12 (9;OOO)
Dividend frcm CSV in 2017 (11.200)
Lileir.urancecxpas,2otz f-E@
9a. AE- A.
Ufe insuEnce policy 4,0OO,OOO
CV of CSV as of October 3i, 201/'
CS\/, Oec. 31, 2016 .39,600
Incrcase up to C}ct. 31, 201 / 9,000 4g.600
cain on ,ite in*rrrane lrclky s.*tlemeii---E!i6d-l
Obseru2 that sirce lhe insrence ttem.ium are pavable nontnty, Eiusumec that after death on Octobr 31, 2017, rc additional
;nsunrce premium had been paid.

'i

8 of B