AUD-SHE

The shareholders’ equity section of the QRC Corporation’s statement of financial position as of
December 31, 2011 is presented below:

QRC Corp had 65,000 ordinary shares as December 31, 2010.

Determine the amounts to be shown in the comparative financial statements.

1. Dividends paid to ordinary shareholders in 2012
a. P652,690 c. P652,960 b. P692,560 d. P656,960
2. Retained earnings as of December 31, 2012
a. P1,880,800 c. P1,892,000 b. P1,884,800 d. P1,888,000
3. Total equity as of December 31, 2012
a. P4,175,200 c. P4,182,400 b. P4,171,200 d. P4,157,200
4. Basic earnings per share for 2011
a. P17.12 c. P 8.56 b. P 8.21 d. P18.49
5. Basic earnings per share for 2012
a. P7.40 c. P5.86 b. P7.34 d. P5.81
Aud-LIAB
On December 31, 2018, A Company signed a four year noncancelable lease for the right of use
of a new machine, requiring P150k annual payments beginning December 31, 2018. The
machine has a useful life of 10 years with no salvage value. The rate implicit on the lease is 12%.
A has a bargain purchase option of P30k and it is reasonably certain that the company will
exercise the option.
1. the amount to be capitalized as right of use asset on Dec. 31, 2018
2. depreciation expense in 2019
3. amount ot be shown as current liability and non current liability in December 31, 2019

PROB 2

PROB 3
You are reviewing the notes payable and interest expense accounts of Cole Manufacturing Co.
as of December 31, 2007 and noted that the company regularly borrows from the bank in order
to finance working capital. The following schedule shows loans with 12% interest rate, with
interest payable at maturity. All loans are repaid at its scheduled maturity date and interest
expense is 7recorded when the loans are repaid.

The client recorded interest expense of P150,000 for 2007. Compute for the correct amount of
interest expense that should be reported in the 2007 income statement.
a. P204,000 b. P212,000 c. P222,000 d. P214,000