Professional Documents
Culture Documents
200,000
b. 175,000 d. 300,000
1. The following pertains to an operating sale and leaseback of equipment by Harbor Co. on
December 31,2005:
What amount of deferred loss should Harbor report at December 31, 2005?
a. 0 c. 100,000
b. 37,334 d. 200,000
2. The Puncher Co. launched a sales promotional campaign on June 30, 2006. For every ten
empty packs returned to Puncher, customers will receive an attractive food container. The
company estimates that only 30% of the packs reaching the market will be redeemed.
Additional information are as follows:
Units Amount
Sales of food packs 3,000,000 P9,000,000
Food containers purchased 60,000 180,000
Prizes distributed to customers 37,000
At the end of the year, Puncher recognized a liability equal to the estimated cost of potential
prizes outstanding.
What is the amount of this estimated liability?
a. 69,000 c. 159,000
b. 90,000 d. 180,000
3. Green Company has 2,000,000 shares of ordinary shares outstanding on December 31,
2005. An additional 100,000 shares are issued on April 1, 2006 and 240,000 more on
September 1. On October 1, Green issued P3,000,000 of 9% convertible bonds. Each bond is
convertible into 40 shares of ordinary shares. At the time of issue of the convertible bonds,
the market rate of the bonds without conversion option is equal to its nominal rate. No
bonds have been converted.
The number of shares to be issued in computing basic earnings per share and diluted earnings per
share on December 31, 2006 would be:
4. Tarzana Company reported total purchases of P3,200,000 in its accrual basis financial
statement on December 31,2006. Additional information revealed the following:
What is the amount of purchases under the cash basis on December 31,2006?
a. 2,850,000 c. 4,100,000
b. 3,550,000 d. 4,450,000