DISCUSSION PROBLEMS

1. Interim financial report means a financial report
containing
a. A complete set of financial statements for an
interim period.
b. A set of condensed financial statements for an
interim period.
c. Either a or b.
d. Neither a nor b.
2. PAS 34 Interim Financial Reporting specifies
a. The content of an interim financial report that is
described as conforming to PFRS.
b. The entities required to publish interim financial
report
5. The terms and conditions of employment with The
Pleasing Company include entitlement to share in the
staff bonus system, under which 5% of the profits for the
year before charging the bonus are allocated to the bonus
pool, provided the annual profits exceed P50 million. The
profits (before accrual of any bonus) for the first half of
2019 amount to P40 million and the latest estimate of
the profits (before accrual of any bonus) for the year as a
whole is P60 million.
How much should be recognized in profit or loss in
respect of the staff bonus for the half year to 30 June
2019, according to PAS34 Interim financial reporting?
a. Nil c. P2.0 million
b. P3.0 million d. P1.5 million

c. The frequency of interim financial reporting.

d. How soon after the end of an interim period should
the entity publish interim financial report. 6 Joseph Corp. had the following transactions during the
3. The Maddy Company is preparing interim financial quarter ended March 31, 2019:
statements for the six months to 30 June 2O16 in Loss from typhoon damage P210,000
accordance with the minimum requirements of PAS34. Payment of fire insurance premium
Its accounting year ends on 31 December each Y•ar. for calendar year 2019 300,000
Which of the following comparative statement is pt
appropriate? What amount should be included in Joseph's income
a. Statement of financial position at 30 June 2015 statement for the quarter ended March 31, 2019?
b. Statement of profit or loss and other Typhoon Loss Insurance Expense
comprehensive income for the half year to 30, a. P210,000 P300,000
June 2015 b. P210,000 P 75,000
c. Statement of changes in equity for the half year c. P 52,500 P 75,000
to 30 June 2015 d. P 0 P300,000
d. Statement of cash flows for the half year to 30
June 2015 7. On January 5, 2019, Red Co. paid P60,O00 for
insurance on its buildings for the calendar year
L ECTURE NOTES: 2016. In the first week of April 2019, the company
made unanticipated major repairs to its equipment
Date and Period Covered - Second Ouarter at a cost of P240,000. These repairs benefited
FS Current year (CY) Prior year (PY) operations for the remainder of 2019. How should
SFP 6.30.CY 12.31.PY these expenses be reflected in Red Co’s quarterly
SCI 3 months ended 6.30.CY 3 months ended 6.30.PY income statements?
6 months ended 6.30.CY 6 months ended 6.30.PY
SCE 6 months ended 6.30.CY 6 months ended 6.30.PY
SCF 6 months ended 6.30.CY 6 months ended 6.30.PY
Mar. 31 Jun. 30 Sep. 30 Dec. 31
a. P15,000 P95,000 P95,000 P95,000
4. An entity operates in the travel industry and incurs cost b. 60,000 240,000
unevenly through the financial year. Advertising costs of c. 75,000 75,000 75,000 75,000
d. 1S,000 255,000 15,o00 s,000
P2 million were incurred on March 1, 2019, and staff
bonuses are paid at year-end based on sales. Staff
bonuses are expected to be around P20 million for 8. Occidental Company’s P10,000,000 net income for the
the year; of that sum, P3 million would relate to the quarter ended September 30, 2019, included the
period ending March 31, 2019. What costs should be following aRer-tax items
included in the entity’s quarterly financial report to
March 31, 2019? • A P1,200,000 gain realized on April 30, 2019 was
a. Advertising costs P2 million; staff bonuses PS allocated equally to the second, third and fourth
million quarters of 2019.
b. Advertising costs P0.5 million; staff bonuses P5 • A P3,000,OOO cumulative loss resulting from a
million change in inventory valuation method was
c. Advertising costs P2 million; staff bonuses P3 recognized on August 2, 2019.
million In addition, Occidental paid P600,000 on February 1,
d. Advertising costs PO.5 million; staff bonuses P3 2019, for 2019 calendar-year property tax. Of this
million amount, P150,000 was allocated to the third quarter of
2019. For the quarter ended September 30, 2019,
Occidental should report net income of
a. P12,600,000 c. P11,800,000
b. P12,750,000 d. P 9,600,000