Question 1

Pinay Corporation has the following portfolio of financial instruments as of

December 31, 2018. All securities are acquired at the beginning of 2018.
Security Denomination/Face Value Acquisition Costs
Alpha Shares 100,000 shares P 5,250,000
Beta Shares 40,000 shares 2,350,000
10% Delta Bonds, 3 years P 2,000,000 par 1,951,126
Additional Notes:
a. Alpha shares were acquired and were designated as financial assets at
fair value through profit or loss. The shares were acquired at P 52.50 per
share, inclusive of a P 2.50 per share transaction cost. Half of Alpha shares
were sold at P 58 per share on July 1, 2019.
b. Beta shares were designated as financial assets at fair value through
other comprehensive income/losses. The shares were acquired at P 60 per
share, inclusive of a P 1.25 per share transaction cost. 15,000 of these
shares were sold on August 1, 2019 at P 59 per share.
c. The Delta Bonds were acquired when the prevailing interest rate was
11%. Interests are collectible every December 31. Half of the Delta bonds
were sold on June 30, 2019 at P 1.1Million.
d. Additional information on the securities are as follows:
Security Fair Value, December 31, Fair Value, December 31,
2018 2019
Alpha Shares P 55 per share P 62 per share
Beta Shares P 57.50 per share P 64 per share
10% Delta Bonds, 3 9% yield, P 2,035,182 12% yield, ?
years
Assuming that the company’s business model has no objective of holding
debt securities to collect contractual cash flows, what is the realized gain or
loss on sale of Delta bonds in 2019?
Select one or more:
P 82,409
P 32,409
P 113,067
P 63,067
Question 2
Given the list of securities and other assets that may qualify as investment.
Equity Securities of another company where no control nor P
significant influence exists. The company elected to report gains 100,000
and losses in the profit and loss
Equity Securities of another company where no control nor 150,000
significant influence exists. The company elected to report gains
and losses in the other comprehensive income/loss
20% Equity securities of another company quoted in an active 500,000
market
51% Equity securities of another company quoted in an active 1,400,0
market 00
Equity securities of the company quoted in an active market 500,000
reacquired with the intention of reissuance in the latter period for
short term profit
Debt security of another company quoted in an active market. 100,000
Business model of the company has an objective to hold debt
securities for short term profits
Debt security of another company quoted in an active market. 500,000
Business model of the company has an objective of collecting
contractual cash flows from the bonds which are primarily in the
form of interest and principal
Real Property held for sale in the normal course of business 500,000
Real Property held for speculation purposes 700,000
Real Property held as a current factory site 1,000,0
00
Real Property of a manufacturing business being leased out to 900,000
another party under operating lease
Land held for undetermined future purpose 800,000
Land held to be used as a future plant site 400,000
Real Estate being developed as an investment property 300,000

How much from the list above is to be considered as financial asset at fair
value through profits or loss?
Select one or more:
P0
 P 500,000
P 100,000
P 200,000

Question 3
Jeepney Company owned a Jeepney fleet which has the following properties,
all acquired on January 1, 2020:
COST SALVAGE LIFE IN YEARS
Building P 6,100,000 P 100,000 20
Machinery 2,550,000 50,000 5
Equipment 1,030,000 30,000 10

What is the depreciation expense in 2025 assuming that the machinery was
retired and P 40,000 was collected from the disposal?
Select one or more:
P 663,000
P 600,000
P 950,000
P 900,000

Question 4
Benshoppe Inc. had the following portfolio of financial assets as of December
31, 2014. All the financial assets were acquired in 2014:
Financial Assets Cost
Aye Corporation stock, 20,000 shares P 590,000
Bee Inc. Stocks, 40,000 shares 1,100,000
Cee Co 10%, P2M bonds 1,973,000
Dee Corp. Stocks, 50,000 shares 2,400,000

Additional Notes:
a. Aye Corporation shares were acquired with the intention of generating
short term profits from the shares’ price fluctuation. The company paid P
29.50 per share, which included the P .50 per share broker’s fees and
commissions. The shares were acquired on February 20, 2014. A P 2 per
share cash dividends were received on March 30. These dividends were
declared by Aye Corporation. On January 20, 2014 to stockholders as of
record date March 1, 2014.
b. The company paid P 27.50 per shares, including P 0.50 per share
broker’s fee on the acquisition of Bee, Inc. on March 1, 2014. These shares
were acquired for trading purposes. A P 3 per share dividend were received
from the said shares on May 3, 2014. These dividends were declared on April
1 to stockholders’ as of record date April 20.
c. Cee Co. bonds which pay semiannual interest every June 30 and
December 31, were acquired on October 1, 2014 at P 1,973,000, when the
prevailing intertest rate on similar instruments was 12%. The bonds shall
mature on December 31, 2016. The company has a business model of
holding debt securities for short term profits.
d. Dee Corporation stocks were acquired P 48 per share, inclusive of a P 3
per share broker’s fees and commission s on June 30, 2014. Dee Corporation
has a total of P 200,000 shares outstanding on the same date. The company
received P 5 dividends per share from Dee Corporation on December 20,
2014.
e. The following were deemed relevant at year end, and no entries had
been made yet by the company to reflect any of the following information:
Aye Bee, Cee Dee
Corporation Incorporation Corporation Corporation
Net Income, P 1,200,000 P 1,500,000 P 2,000,000 P 2,240,000
2014
Fair Value P 35/share P 25/ share 11% P 51/share

Assuming the company’s business model regarding debt securities has an

objective of collecting contractual cash flows, how much in total should be
presented in the income statement in relation to the investments?
Select one or more:

P 507,690
b. P 525,750
P 537,690
P 461,948
Question 5
Given the list of securities and other assets that may qualify as investment.
Equity Securities of another company where no control nor P
significant influence exists. The company elected to report gains 100,000
and losses in the profit and loss
Equity Securities of another company where no control nor 150,000
significant influence exists. The company elected to report gains
and losses in the other comprehensive income/loss
20% Equity securities of another company quoted in an active 500,000
market
51% Equity securities of another company quoted in an active 1,400,0
market 00
Equity securities of the company quoted in an active market 500,000
reacquired with the intention of reissuance in the latter period for
short term profit
Debt security of another company quoted in an active market. 100,000
Business model of the company has an objective to hold debt
securities for short term profits
Debt security of another company quoted in an active market. 500,000
Business model of the company has an objective of collecting
contractual cash flows from the bonds which are primarily in the
form of interest and principal
Real Property held for sale in the normal course of business 500,000
Real Property held for speculation purposes 700,000
Real Property held as a current factory site 1,000,0
00
Real Property of a manufacturing business being leased out to 900,000
another party under operating lease
Land held for undetermined future purpose 800,000
Land held to be used as a future plant site 400,000
Real Estate being developed as an investment property 300,000

How much from the list above is to be categorized as investment in

subsidiary?
Select one or more:
P 1,400,000
P 1,200,000
P0
P 1,000,000
Question 6
Light Company bought a machine for ₱300,000 on January 1, 2018. The
machine's useful life is 10 years and it is estimated to have a zero residual
value and is depreciated using the straight-line method. The revalued
amount of the machine is as follows:
December 31 Fair values of
the machine
2018 ₱ 360,000
2019 335,000
2020 320,000
The enacted tax rate was 30% for each year
The amount of depreciation expense to be recognized in 2019 is
Select one or more:
40,000
36,000
32,500
42,500

Question 7
Entity A acquires inventories and incurs the following costs:
Purchase price, gross of trade discount 100,000
Trade discount 20,000
Non-refundable purchase tax, not included in the purchase price 5,000
above
Freight-in (Transportation costs) 15,000
Commission to broker 2,000
Advertisement costs 10,000

How much is the cost of the inventories purchased?

Select one or more:

122,000
102,000
97,000
100,000

Question 8
The Mighty Corporation has the following changes in terms of its Property,
Plant and Equipment:
a. Machine A was purchased for P 30,000 on January 1, 2018. It had an
estimated residual value of P 5,000 and an estimated service life of 10 years.
It has been depreciated under double declining balance method for 2 years.
Now in the third year, Mighty decided to change it to the straight line
method.
b. Machine B was purchased for P 50,000 on January 1, 2015. Straight line
depreciation was the basis of recording depreciation for five years which
accumulates for P 25,000. Residual value of P 5,000 remains the same but
the service life is now estimated to two years longer than the original
estimate.
c. Machine C purchased for P 20,000 on January 1, 2019. Double declining
balance method has been recorded for a year. The estimated residual value
of P 2,000 and its service life is five years. The depreciation recorded
includes the estimated residual value.
What is the correct depreciation expense for each machinery for the year
2020?
A B C D
Machine A P 2,400 P 1,775 P 1,725 P 1,400
Machine B 4,167 3,333 2,167 1,333
Machine C 8,000 4,800 4,000 2,400

Select one or more:

A
C
B
D

Question 9
Goosey Inc. uses hand tool in its manufacturing activities. On January 1,
2020, there are 800 of such tools on hand at a cost of P 40 each. Acquisition
and retirement in the years 2020 and 2021 are:
Acquisition and Cost Retirement and Value of tools at year
Proceeds end
2020 400 @ P 60 300 @ P 10 P 40,000
2021 900 @ P 80 700 @ P 14 35,000

What is the depreciation expense in 2020 and 2021, respectively, using the
replacement method?
Select one or more:
P 18,000; P 46,200
P 15,000; P 46,200
P 15,000; P 56,000
P 18,000; P 56,000

Question 10
Yesterday, you wrote a ₱2M check and gave it to a supplier as payment for
the goods you have purchased. Today, you received your bank statement.
You noticed that the ₱2M check is not reflected in the statement. What
should you do?
Select one or more:
Call the supplier and demand him or her to go to the bank and present the
check for payment.
Treat the ₱2M check as outstanding check in your bank reconciliation for
today.
Call your friends and celebrate, telling them that you just saved ₱2M.
Post the incident on your Facebook page and wait for likes.

Question 11
Pinay Corporation has the following portfolio of financial instruments as of
December 31, 2018. All securities are acquired at the beginning of 2018.
Security Denomination/Face Value Acquisition Costs
Alpha Shares 100,000 shares P 5,250,000
Beta Shares 40,000 shares 2,350,000
 10% Delta Bonds, 3 years P 2,000,000 par 1,951,126
Additional Notes:
a. Alpha shares were acquired and were designated as financial assets at
fair value through profit or loss. The shares were acquired at P 52.50 per
share, inclusive of a P 2.50 per share transaction cost. Half of Alpha shares
were sold at P 58 per share on July 1, 2019.
b. Beta shares were designated as financial assets at fair value through
other comprehensive income/losses. The shares were acquired at P 60 per
share, inclusive of a P 1.25 per share transaction cost. 15,000 of these
shares were sold on August 1, 2019 at P 59 per share.
c. The Delta Bonds were acquired when the prevailing interest rate was
11%. Interests are collectible every December 31. Half of the Delta bonds
were sold on June 30, 2019 at P 1.1Million.
d. Additional information on the securities are as follows:
Security Fair Value, December 31, Fair Value, December 31,
2018 2019
Alpha Shares P 55 per share P 62 per share
Beta Shares P 57.50 per share P 64 per share
10% Delta Bonds, 3 9% yield, P 2,035,182 12% yield, ?
years
Assuming that the company’s business model has an objective of holding
debt securities to collect contractual cash flows, what is the realized gain or
loss on sale of Delta bonds in 2019?
Select one or more:
63,067
P 113,067
P 82,409
P 32,409

Question 12
Jeepney Company owned a Jeepney fleet which has the following properties,
all acquired on January 1, 2020:
COST SALVAGE LIFE IN YEARS
Building P 6,100,000 P 100,000 20
Machinery 2,550,000 50,000 5
Equipment 1,030,000 30,000 10

What is the composite life?

Select one or more:
10.56 years
11 years
10.76 years
10.90 years

Question 13
On June 30, 2022, Simon Company discounted a customer's ₱180,000, 6
month, 10 percent note receivable dated April 30, 2022. A discount rate of
12 percent was charged by the bank. Simon's proceeds from this discounted
note would be
Select one or more:
₱169,200
₱181,440
₱ 185,220
₱172,800

Question 14
Pinay Corporation has the following portfolio of financial instruments as of
December 31, 2018. All securities are acquired at the beginning of 2018.
Security Denomination/Face Value Acquisition Costs
Alpha Shares 100,000 shares P 5,250,000
Beta Shares 40,000 shares 2,350,000
10% Delta Bonds, 3 years P 2,000,000 par 1,951,126
Additional Notes:
a. Alpha shares were acquired and were designated as financial assets at
fair value through profit or loss. The shares were acquired at P 52.50 per
share, inclusive of a P 2.50 per share transaction cost. Half of Alpha shares
were sold at P 58 per share on July 1, 2019.
b. Beta shares were designated as financial assets at fair value through
other comprehensive income/losses. The shares were acquired at P 60 per
share, inclusive of a P 1.25 per share transaction cost. 15,000 of these
shares were sold on August 1, 2019 at P 59 per share.
c. The Delta Bonds were acquired when the prevailing interest rate was
11%. Interests are collectible every December 31. Half of the Delta bonds
were sold on June 30, 2019 at P 1.1Million.
d. Additional information on the securities are as follows:
Security Fair Value, December 31, Fair Value, December 31,
2018 2019
Alpha Shares P 55 per share P 62 per share
Beta Shares P 57.50 per share P 64 per share
10% Delta Bonds, 3 9% yield, P 2,035,182 12% yield, ?
years
What is the realized gain or loss on Beta shares in 2019 under PAS 39,
Financial Instruments?
Select one or more:
P 22,500
P 15,000
P0
P 75,000

Question 15
Benshoppe Inc. had the following portfolio of financial assets as of December
31, 2014. All the financial assets were acquired in 2014:
Financial Assets Cost
Aye Corporation stock, 20,000 shares P 590,000
Bee Inc. Stocks, 40,000 shares 1,100,000
Cee Co 10%, P2M bonds 1,973,000
Dee Corp. Stocks, 50,000 shares 2,400,000

Additional Notes:
a. Aye Corporation shares were acquired with the intention of generating
short term profits from the shares’ price fluctuation. The company paid P
29.50 per share, which included the P .50 per share broker’s fees and
commissions. The shares were acquired on February 20, 2014. A P 2 per
share cash dividends were received on March 30. These dividends were
declared by Aye Corporation. On January 20, 2014 to stockholders as of
record date March 1, 2014.
b. The company paid P 27.50 per shares, including P 0.50 per share
broker’s fee on the acquisition of Bee, Inc. on March 1, 2014. These shares
were acquired for trading purposes. A P 3 per share dividend were received
from the said shares on May 3, 2014. These dividends were declared on April
1 to stockholders’ as of record date April 20.
c. Cee Co. bonds which pay semiannual interest every June 30 and
December 31, were acquired on October 1, 2014 at P 1,973,000, when the
prevailing intertest rate on similar instruments was 12%. The bonds shall
mature on December 31, 2016. The company has a business model of
holding debt securities for short term profits.
d. Dee Corporation stocks were acquired P 48 per share, inclusive of a P 3
per share broker’s fees and commission s on June 30, 2014. Dee Corporation
has a total of P 200,000 shares outstanding on the same date. The company
received P 5 dividends per share from Dee Corporation on December 20,
2014.
e. The following were deemed relevant at year end, and no entries had
been made yet by the company to reflect any of the following information:
Aye Bee, Cee Dee
Corporation Incorporation Corporation Corporation
Net Income, P 1,200,000 P 1,500,000 P 2,000,000 P 2,240,000
2014
Fair Value P 35/share P 25/ share 11% P 51/share
What is the unrealized holding gains/loss to be reported in the 2014
statement of comprehensive income?
Select one or more:
P 1,948
P 122,750
P 51,948
P 121,948

Question 16
On January 1, 2021, ABC Co. received a 3-year, noninterest bearing note of
₱133,100 in exchange for land with carrying amount of ₱100,000. The note is
due on December 31, 2023. The effective interest rate is 10%. How much is
the carrying amount of the note on December 31, 2022?
Select one or more:
121,000
110,000
100,000
133,100

Question 17
Enter Sandman Co. purchased manufacturing equipment from Sad But True
Co. on January 1, 2018 at a total cost of ₱9,000,000. Enter Sandman uses the
straight-line method of depreciation and estimates that the equipment has a
useful life of 10 years. On July 1, 2018 and July 1, 2019 Enter Sandman
performed major regular inspections on the equipment costing ₱380,000 and
₱425,000, respectively. The costs of inspection satisfied the recognition
criteria for capitalization. How much is the carrying amount of the
equipment on December 31, 2019?
Select one or more:
7,529,412
7,875,000
7,920,000
7,600,000

Question 18
Given the list of securities and other assets that may qualify as investment.
Equity Securities of another company where no control nor P
significant influence exists. The company elected to report gains 100,000
and losses in the profit and loss
Equity Securities of another company where no control nor 150,000
significant influence exists. The company elected to report gains
and losses in the other comprehensive income/loss
20% Equity securities of another company quoted in an active 500,000
market
51% Equity securities of another company quoted in an active 1,400,0
market 00
Equity securities of the company quoted in an active market 500,000
reacquired with the intention of reissuance in the latter period for
short term profit
Debt security of another company quoted in an active market. 100,000
Business model of the company has an objective to hold debt
securities for short term profits
Debt security of another company quoted in an active market. 500,000
Business model of the company has an objective of collecting
contractual cash flows from the bonds which are primarily in the
form of interest and principal
Real Property held for sale in the normal course of business 500,000
Real Property held for speculation purposes 700,000
Real Property held as a current factory site 1,000,0
00
Real Property of a manufacturing business being leased out to 900,000
another party under operating lease
Land held for undetermined future purpose 800,000
Land held to be used as a future plant site 400,000
Real Estate being developed as an investment property 300,000

How much from the list above is to be categorized as investment at

amortized cost?
Select one or more:
P 600,000
P 500,000
P0
P 750,000

Question 19
Goosey Inc. uses hand tool in its manufacturing activities. On January 1,
2020, there are 800 of such tools on hand at a cost of P 40 each. Acquisition
and retirement in the years 2020 and 2021 are:
Acquisition and Cost Retirement and Value of tools at year
Proceeds end
2020 400 @ P 60 300 @ P 10 P 40,000
2021 900 @ P 80 700 @ P 14 35,000

What is the depreciation expense in 2020 and 2021, respectively, using the
retirement method?
Select one or more:
P 12,000; P 22,200
P 9,000; P 18,200
P 9,000; P 22,200
P 12,000; P 32,000

Question 20
Goosey Inc. uses hand tool in its manufacturing activities. On January 1,
2020, there are 800 of such tools on hand at a cost of P 40 each. Acquisition
and retirement in the years 2020 and 2021 are:
Acquisition and Cost Retirement and Value of tools at year
Proceeds end
2020 400 @ P 60 300 @ P 10 P 40,000
2021 900 @ P 80 700 @ P 14 35,000

What is the depreciation expense in 2020 and 2021, respectively, using

inventory method?
Select one or more:
P16,000; P 67,200
P 13,000; P 50,000
P 16,000; P 50,000
P 13,000; P 67,200

Question 21
Pinay Corporation has the following portfolio of financial instruments as of
December 31, 2018. All securities are acquired at the beginning of 2018.
Security Denomination/Face Value Acquisition Costs
Alpha Shares 100,000 shares P 5,250,000
Beta Shares 40,000 shares 2,350,000
10% Delta Bonds, 3 years P 2,000,000 par 1,951,126
Additional Notes:
a. Alpha shares were acquired and were designated as financial assets at
fair value through profit or loss. The shares were acquired at P 52.50 per
share, inclusive of a P 2.50 per share transaction cost. Half of Alpha shares
were sold at P 58 per share on July 1, 2019.
b. Beta shares were designated as financial assets at fair value through
other comprehensive income/losses. The shares were acquired at P 60 per
share, inclusive of a P 1.25 per share transaction cost. 15,000 of these
shares were sold on August 1, 2019 at P 59 per share.
c. The Delta Bonds were acquired when the prevailing interest rate was
11%. Interests are collectible every December 31. Half of the Delta bonds
were sold on June 30, 2019 at P 1.1Million.
d. Additional information on the securities are as follows:
Security Fair Value, December 31, Fair Value, December 31,
2018 2019
Alpha Shares P 55 per share P 62 per share
Beta Shares P 57.50 per share P 64 per share
10% Delta Bonds, 3 9% yield, P 2,035,182 12% yield, ?
years

What is the realized gain or loss on Beta shares in 2019 under PFRS 9,
Financial Instruments?
Under PFRS 9, Recycling of OCI to P/L is not allowed. If the problem is silent,
we use this
Select one or more:

P 75,000
P 15,000
P 22,500
P0

Question 22
Pinay Corporation has the following portfolio of financial instruments as of
December 31, 2018. All securities are acquired at the beginning of 2018.
Security Denomination/Face Value Acquisition Costs
Alpha Shares 100,000 shares P 5,250,000
Beta Shares 40,000 shares 2,350,000
10% Delta Bonds, 3 years P 2,000,000 par 1,951,126
Additional Notes:
a. Alpha shares were acquired and were designated as financial assets at
fair value through profit or loss. The shares were acquired at P 52.50 per
share, inclusive of a P 2.50 per share transaction cost. Half of Alpha shares
were sold at P 58 per share on July 1, 2019.
b. Beta shares were designated as financial assets at fair value through
other comprehensive income/losses. The shares were acquired at P 60 per
share, inclusive of a P 1.25 per share transaction cost. 15,000 of these
shares were sold on August 1, 2019 at P 59 per share.
c. The Delta Bonds were acquired when the prevailing interest rate was
11%. Interests are collectible every December 31. Half of the Delta bonds
were sold on June 30, 2019 at P 1.1Million.
d. Additional information on the securities are as follows:
Security Fair Value, December 31, Fair Value, December 31,
2018 2019
Alpha Shares P 55 per share P 62 per share
Beta Shares P 57.50 per share P 64 per share
10% Delta Bonds, 3 9% yield, P 2,035,182 12% yield, ?
years
Assuming that the company’s business model has no objective of holding
debt securities to collect contractual cash flows, what is the total carrying
value of investments that shall be presented as financial asset fair value
through profit or loss (trading securities)?
Select one or more:
P 4,700,000
P 3,100,000
P 5,064,285
P 4,082,143

Question 23
The credit total of a trial balance exceeds the debit total by P350. In
investigating the cause of the difference, the following errors were
determined: a credit to accounts receivable of P550 was not posted; a P5,000
debit to be made to the Purchases account was debited to Accounts payable
instead; a P3,000 credit to be made to the Sales account was credited to the
Accounts receivable account instead; the Interest payable account balance of
P4,500 was included in the trial balance as P5,400. The correct balance of
the trial balance is
Select one or more:
9,250
7,540
7,450
8,550

Question 24
Light Company bought a machine for ₱300,000 on January 1, 2018. The
machine's useful life is 10 years and it is estimated to have a zero residual
value and is depreciated using the straight-line method. The revalued
amount of the machine is as follows:
December 31 Fair values of the machine
2018 ₱ 360,000
2019 335,000
2020 320,000
The enacted tax rate was 30% for each year.
The revaluation surplus in the equity section of Light Company's December
31, 2020 statement of financial position is
Select one or more:
110,000
109,500
123,443
77,000
Question 25
The following were taken from the records of SML Co. as of December 31,
2021:
Checks drawn but not yet issued to payees ₱120,000
Customers’ checks dated January 15, 2022 35,000
Customers’ checks dated Dec. 31, 2021 40,000
SML’s check dated Jan. 15, 2022 already mailed to payee 16,000
Cash on hand 130,000
Employees’ checks representing unclaimed salaries, held by the 14,000
treasurer
Petty cash fund (fully replenished) 20,000
 How much of the items listed above will be included in SML’s Dec. 31, 2021
cash?
Select one or more:
280,000
260,000
320,000
340,000

Question 26
Jeepney Company owned a Jeepney fleet which has the following properties,
all acquired on January 1, 2020:
COST SALVAGE LIFE IN YEARS
Building P 6,100,000 P 100,000 20
Machinery 2,550,000 50,000 5
Equipment 1,030,000 30,000 10

What is the depreciation expense in 2020?

Select one or more:
P 900,00
P 950,000
P 1,000,000
P 884,000

Question 27
The Property, Plant and Equipment account of Coconut Corporation
disclosed the following data as of December 31, 2020.
Machine Original Acquisition Useful Salvage Dep. Method
ry Cost Date Life Value
A P 700,000 2014 10 years P 62,000 SYD
B 1,020,000 2015 15,000 60,000 Working Hours
hours
C 1,600,000 2016 15 years 100,000 Straight Line
 D 1,600,000 2018 10 years 100,000 Double Declining
The following is a summary of 2020 transactions:
A. On May 5, Machinery A was sold for P 260,000 cash and the sale was
recorded by the bookkeeper as debit to Cash and Credit to machinery
accounts for the proceeds.
B. On December 31, 2020, it was ascertained that Machinery B has been
used for a cumulative 13,100 hours, 2,100 of which was utilized in 2020.
Starting 2020, however, the management revised the estimate of the total
useful life from 15,000 hours to 18,000 hours with a revised salvage value of
P 36,000.
C. On December 31, 2020, before computing for depreciation expense on
Machinery C, the management decided that the remaining useful life is 10
years from January 1, 2020.
D. On December 31, 2020, it was discovered that the plant asset purchased
in 2019 has been charged to repairs expense in 2019. The asset cost P
440,000 and had a useful life of 10 years with no salvage value.
Management has decided to use double declining balance method for this
asset and was referred to as Machinery F.
What is the adjusted gain on sale of Machinery A?
Select one or more:
P 82,000
P 93,600
P 58,000
P 87,640

Question 28
The Property, Plant and Equipment account of Coconut Corporation
disclosed the following data as of December 31, 2020.
Machine Original Acquisition Useful Salvage Dep. Method
ry Cost Date Life Value
A P 700,000 2014 10 years P 62,000 SYD
B 1,020,000 2015 15,000 60,000 Working Hours
hours
C 1,600,000 2016 15 years 100,000 Straight Line
D 1,600,000 2018 10 years 100,000 Double Declining
The following is a summary of 2020 transactions:
A. On May 5, Machinery A was sold for P 260,000 cash and the sale was
recorded by the bookkeeper as debit to Cash and Credit to machinery
accounts for the proceeds.
B. On December 31, 2020, it was ascertained that Machinery B has been
used for a cumulative 13,100 hours, 2,100 of which was utilized in 2020.
Starting 2020, however, the management revised the estimate of the total
useful life from 15,000 hours to 18,000 hours with a revised salvage value of
P 36,000.
C. On December 31, 2020, before computing for depreciation expense on
Machinery C, the management decided that the remaining useful life is 10
years from January 1, 2020.
D. On December 31, 2020, it was discovered that the plant asset purchased
in 2019 has been charged to repairs expense in 2019. The asset cost P
440,000 and had a useful life of 10 years with no salvage value.
Management has decided to use double declining balance method for this
asset and was referred to as Machinery F.
What is the carrying value of the remaining machineries as of December 31,
2020?
Select one or more:
P 3,044,000
P 2,436,000
P 2,788,000
P 2,544,800

Question 29
The Queen Manufacturing Company began operating July 1, 2020, the date
they completed all factory facilities in place, but the company was
incorporated at the beginning of the year. The Land and Building Account at
the end of the first year showed the following items:
DATE PARTICULARS AMOUN
T
January 3 Acquisition of Land and Building 1,108,00
0
January 15 Property Taxes paid on the real property 20,000
February 5 Option Payments 20,000
February Cost of Removal of the old building 22,000
28
March 1 Partial payment on new construction to induce the start 700,000
 of construction
March 1 Legal fees paid 15,000
March 1 Insurance Premium paid for I year 24,000
June 1 Second Payment on new construction 600,000
June 30 General Expenses 60,000
July 1 Final Payment of New Construction 200,000
July 1 Construction Gain 500,000
TOTAL 3,269,0
00
December Depreciation at 1% of the balance (32,690)
31
Carrying Value 3,236,31
0

The following notes are relevant to consider:

a. To acquire the land and building, the company paid P 108,000 cash and
10,000 shares of its 10% preference shares with par value of P 100 per share
and with a current selling price of P 120 per share.
b. The property taxes paid was for two year, 2019 and 2020.
c. P 15,000 from the total option payments were for the property acquired
while the balance were for the other real properties not acquired.
d. Legal fees covered the following: Cost of Incorporation, P 9,500;
Examination of the title covering purchase of land, P 4,000; Legal work in
connection with the construction contract, P 1,500.
e. General expenses covered the salaries for the period January 1 to June
30 of the following:
President P 20,000
Plant Superintendent while supervising the construction 12,000
Office Staff 28,000
f. The gain on construction is the difference between the total cost of
construction and the fair value of the asset upon completion.
g. The estimated life of the building is 25 years.
The depreciation expense on the building for the year 2020 is
Select one or more:
P 30,910
P 30,870
P 30,270
P 30,340

Question 30
On October 1, 2021, the warehouse of ABC Co. and all inventories contained
therein were damaged by flood. Off-site back up of data base shows the
following information:
Inventory, Jan. 1 14,500
Accounts payable, Jan. 1 6,000
Accounts payable, Sept. 30 3,000
Payments to suppliers 50,000
Freight-in 5,000
Purchase returns and discounts 2,500
Sales from Jan. to Sept. 75,000
Sales returns 5,000
Sales discounts 2,000

Gross profit rate based on sales 20%

Additional information:
Goods in transit as of October 1, 2021 amounted to ₱2,000, cost of goods out
on consignment is ₱1,200, and materials damaged by flood can be sold at a
salvage value of ₱500.
How much is the inventory loss due to the flood?
Select one or more:
8,200
6,800
7,800
7,200

Question 31
At 30 September 2020, Z Ltd had a provision for doubtful debts of P37,000.
During the year ended 30 September 2021 the company wrote off debts
totaling P18,000, and at the end of the year it is decided that the provision
for doubtful debts should be P20,000. What should be included in the income
statement for bad and doubtful debts?
Select one or more:
3,000
38,000
1,000
35,000

Question 32
The Property, Plant and Equipment account of Coconut Corporation
disclosed the following data as of December 31, 2020.
Machine Original Acquisition Useful Salvage Dep. Method
ry Cost Date Life Value
A P 700,000 2014 10 years P 62,000 SYD
B 1,020,000 2015 15,000 60,000 Working Hours
hours
C 1,600,000 2016 15 years 100,000 Straight Line
D 1,600,000 2018 10 years 100,000 Double Declining
The following is a summary of 2020 transactions:
A. On May 5, Machinery A was sold for P 260,000 cash and the sale was
recorded by the bookkeeper as debit to Cash and Credit to machinery
accounts for the proceeds.
B. On December 31, 2020, it was ascertained that Machinery B has been
used for a cumulative 13,100 hours, 2,100 of which was utilized in 2020.
Starting 2020, however, the management revised the estimate of the total
useful life from 15,000 hours to 18,000 hours with a revised salvage value of
P 36,000.
C. On December 31, 2020, before computing for depreciation expense on
Machinery C, the management decided that the remaining useful life is 10
years from January 1, 2020.
D. On December 31, 2020, it was discovered that the plant asset purchased
in 2019 has been charged to repairs expense in 2019. The asset cost P
440,000 and had a useful life of 10 years with no salvage value.
Management has decided to use double declining balance method for this
asset and was referred to as Machinery F.
What is the depreciation expense on Machinery C for 2020?
Select one or more:
P 171,430
P 120,000
P 130,000
P 54,550

Question 33
The Queen Manufacturing Company began operating July 1, 2020, the date
they completed all factory facilities in place, but the company was
incorporated at the beginning of the year. The Land and Building Account at
the end of the first year showed the following items:
DATE PARTICULARS AMOUN
T
January 3 Acquisition of Land and Building 1,108,00
0
January 15 Property Taxes paid on the real property 20,000
February 5 Option Payments 20,000
February Cost of Removal of the old building 22,000
28
March 1 Partial payment on new construction to induce the start 700,000
of construction
March 1 Legal fees paid 15,000
March 1 Insurance Premium paid for I year 24,000
June 1 Second Payment on new construction 600,000
June 30 General Expenses 60,000
July 1 Final Payment of New Construction 200,000
July 1 Construction Gain 500,000
TOTAL 3,269,0
00
December Depreciation at 1% of the balance (32,690)
31
Carrying Value 3,236,31
0

The following notes are relevant to consider:

a. To acquire the land and building, the company paid P 108,000 cash and
10,000 shares of its 10% preference shares with par value of P 100 per share
and with a current selling price of P 120 per share.
b. The property taxes paid was for two year, 2019 and 2020.
c. P 15,000 from the total option payments were for the property acquired
while the balance were for the other real properties not acquired.
d. Legal fees covered the following: Cost of Incorporation, P 9,500;
Examination of the title covering purchase of land, P 4,000; Legal work in
connection with the construction contract, P 1,500.
e. General expenses covered the salaries for the period January 1 to June
30 of the following:
President P 20,000
Plant Superintendent while supervising the construction 12,000
Office Staff 28,000
f. The gain on construction is the difference between the total cost of
construction and the fair value of the asset upon completion.
g. The estimated life of the building is 25 years.
The adjusted ending balance of the Land is
Select one or more:
P 1,350,000
P 1,364,000
P 1,359,000
P 1,337,000

Question 34
Given the list of securities and other assets that may qualify as investment.
Equity Securities of another company where no control nor P
significant influence exists. The company elected to report gains 100,000
and losses in the profit and loss
Equity Securities of another company where no control nor 150,000
significant influence exists. The company elected to report gains
and losses in the other comprehensive income/loss
20% Equity securities of another company quoted in an active 500,000
market
51% Equity securities of another company quoted in an active 1,400,0
market 00
Equity securities of the company quoted in an active market 500,000
reacquired with the intention of reissuance in the latter period for
short term profit
Debt security of another company quoted in an active market. 100,000
Business model of the company has an objective to hold debt
securities for short term profits
Debt security of another company quoted in an active market. 500,000
Business model of the company has an objective of collecting
contractual cash flows from the bonds which are primarily in the
form of interest and principal
Real Property held for sale in the normal course of business 500,000
Real Property held for speculation purposes 700,000
Real Property held as a current factory site 1,000,0
00
Real Property of a manufacturing business being leased out to 900,000
another party under operating lease
Land held for undetermined future purpose 800,000
Land held to be used as a future plant site 400,000
Real Estate being developed as an investment property 300,000

How much from the list above is to be considered as financial asset at fair
value though OCI?
Select one or more:
P 150,000
P 180,000
P 350,000
P 200,000
Question 35
Jeepney Company owned a Jeepney fleet which has the following properties,
all acquired on January 1, 2020:
COST SALVAGE LIFE IN YEARS
Building P 6,100,000 P 100,000 20
Machinery 2,550,000 50,000 5
Equipment 1,030,000 30,000 10
What is the composite rate of depreciation?
Select one or more:
9.48%
9.47%
9.50%
9.30%

Question 36
Benshoppe Inc. had the following portfolio of financial assets as of December
31, 2014. All the financial assets were acquired in 2014:
Financial Assets Cost
Aye Corporation stock, 20,000 shares P 590,000
Bee Inc. Stocks, 40,000 shares 1,100,000
Cee Co 10%, P2M bonds 1,973,000
Dee Corp. Stocks, 50,000 shares 2,400,000

Additional Notes:
a. Aye Corporation shares were acquired with the intention of generating
short term profits from the shares’ price fluctuation. The company paid P
29.50 per share, which included the P .50 per share broker’s fees and
commissions. The shares were acquired on February 20, 2014. A P 2 per
share cash dividends were received on March 30. These dividends were
declared by Aye Corporation. On January 20, 2014 to stockholders as of
record date March 1, 2014.
b. The company paid P 27.50 per shares, including P 0.50 per share
broker’s fee on the acquisition of Bee, Inc. on March 1, 2014. These shares
were acquired for trading purposes. A P 3 per share dividend were received
from the said shares on May 3, 2014. These dividends were declared on April
1 to stockholders’ as of record date April 20.
c. Cee Co. bonds which pay semiannual interest every June 30 and
December 31, were acquired on October 1, 2014 at P 1,973,000, when the
prevailing intertest rate on similar instruments was 12%. The bonds shall
mature on December 31, 2016. The company has a business model of
holding debt securities for short term profits.
d. Dee Corporation stocks were acquired P 48 per share, inclusive of a P 3
per share broker’s fees and commission s on June 30, 2014. Dee Corporation
has a total of P 200,000 shares outstanding on the same date. The company
received P 5 dividends per share from Dee Corporation on December 20,
2014.
e. The following were deemed relevant at year end, and no entries had
been made yet by the company to reflect any of the following information:
Aye Bee, Cee Dee
Corporation Incorporation Corporation Corporation
Net Income, P 1,200,000 P 1,500,000 P 2,000,000 P 2,240,000
2014
Fair Value P 35/share P 25/ share 11% P 51/share
What is the total amount that should be recognized in the income statement
in relation the investment?
Select one or more:

P 571,948
P 541,948
P 542,750
P 261,948

Question 37
Given the list of securities and other assets that may qualify as investment.
Equity Securities of another company where no control nor P
significant influence exists. The company elected to report gains 100,000
and losses in the profit and loss
Equity Securities of another company where no control nor 150,000
significant influence exists. The company elected to report gains
and losses in the other comprehensive income/loss
20% Equity securities of another company quoted in an active 500,000
market
51% Equity securities of another company quoted in an active 1,400,0
market 00
Equity securities of the company quoted in an active market 500,000
reacquired with the intention of reissuance in the latter period for
short term profit
Debt security of another company quoted in an active market. 100,000
Business model of the company has an objective to hold debt
securities for short term profits
Debt security of another company quoted in an active market. 500,000
Business model of the company has an objective of collecting
contractual cash flows from the bonds which are primarily in the
form of interest and principal
Real Property held for sale in the normal course of business 500,000
Real Property held for speculation purposes 700,000
Real Property held as a current factory site 1,000,0
00
Real Property of a manufacturing business being leased out to 900,000
another party under operating lease
Land held for undetermined future purpose 800,000
Land held to be used as a future plant site 400,000
Real Estate being developed as an investment property 300,000
How much from the list above is to be categorized as investment in
associate?
Select one or more:
P 700,000
P0
P 500,000
P 600,000

Question 38
Entity A is preparing its March 31, 2021 bank reconciliation. The following
information was determined:

 The cash balance per books is ₱280,000 while the cash balance per
bank statement is ₱320,000.
 Credit memo – ₱20,000
 Debit memo – ₱15,000
 Deposits in transit – ₱75,000
 Outstanding checks – ₱25,000
 The disbursements per books are overstated by ₱45,000.
 The bank debits are understated by ₱40,000.

How much is the adjusted balance of cash?

Select one or more:
370,000
330,000
275,000
380,000

Question 39
Benshoppe Inc. had the following portfolio of financial assets as of December
31, 2014. All the financial assets were acquired in 2014:
Financial Assets Cost
Aye Corporation stock, 20,000 shares P 590,000
Bee Inc. Stocks, 40,000 shares 1,100,000
Cee Co 10%, P2M bonds 1,973,000
Dee Corp. Stocks, 50,000 shares 2,400,000

Additional Notes:
a. Aye Corporation shares were acquired with the intention of generating
short term profits from the shares’ price fluctuation. The company paid P
29.50 per share, which included the P .50 per share broker’s fees and
commissions. The shares were acquired on February 20, 2014. A P 2 per
share cash dividends were received on March 30. These dividends were
declared by Aye Corporation. On January 20, 2014 to stockholders as of
record date March 1, 2014.
b. The company paid P 27.50 per shares, including P 0.50 per share
broker’s fee on the acquisition of Bee, Inc. on March 1, 2014. These shares
were acquired for trading purposes. A P 3 per share dividend were received
from the said shares on May 3, 2014. These dividends were declared on April
1 to stockholders’ as of record date April 20.
c. Cee Co. bonds which pay semiannual interest every June 30 and
December 31, were acquired on October 1, 2014 at P 1,973,000, when the
prevailing intertest rate on similar instruments was 12%. The bonds shall
mature on December 31, 2016. The company has a business model of
holding debt securities for short term profits.
d. Dee Corporation stocks were acquired P 48 per share, inclusive of a P 3
per share broker’s fees and commission s on June 30, 2014. Dee Corporation
has a total of P 200,000 shares outstanding on the same date. The company
received P 5 dividends per share from Dee Corporation on December 20,
2014.
e. The following were deemed relevant at year end, and no entries had
been made yet by the company to reflect any of the following information:
Aye Bee, Cee Dee
 Corporation Incorporation Corporation Corporation
Net Income, P 1,200,000 P 1,500,000 P 2,000,000 P 2,240,000
2014
Fair Value P 35/share P 25/ share 11% P 51/share

What is the carrying value of investment that should be presented as current

assets?
Select one or more:
P 3,664,948
P 2,765,250
P 3,665,750
P 3,543,000

Question 40
Pinay Corporation has the following portfolio of financial instruments as of
December 31, 2018. All securities are acquired at the beginning of 2018.
Security Denomination/Face Value Acquisition Costs
Alpha Shares 100,000 shares P 5,250,000
Beta Shares 40,000 shares 2,350,000
10% Delta Bonds, 3 years P 2,000,000 par 1,951,126
Additional Notes:
a. Alpha shares were acquired and were designated as financial assets at
fair value through profit or loss. The shares were acquired at P 52.50 per
share, inclusive of a P 2.50 per share transaction cost. Half of Alpha shares
were sold at P 58 per share on July 1, 2019.
b. Beta shares were designated as financial assets at fair value through
other comprehensive income/losses. The shares were acquired at P 60 per
share, inclusive of a P 1.25 per share transaction cost. 15,000 of these
shares were sold on August 1, 2019 at P 59 per share.
c. The Delta Bonds were acquired when the prevailing interest rate was
11%. Interests are collectible every December 31. Half of the Delta bonds
were sold on June 30, 2019 at P 1.1Million.
d. Additional information on the securities are as follows:
Security Fair Value, December 31, Fair Value, December 31,
2018 2019
 Alpha Shares P 55 per share P 62 per share
Beta Shares P 57.50 per share P 64 per share
10% Delta Bonds, 3 9% yield, P 2,035,182 12% yield, ?
years

What is the realized gain or loss on sale of Alpha shares in 2019?

Select one or more:
P 400,000
P 150,000
P 275,000
P 200,000

Question 41
The Property, Plant and Equipment account of Coconut Corporation
disclosed the following data as of December 31, 2020.
Machine Original Acquisition Useful Salvage Dep. Method
ry Cost Date Life Value
A P 700,000 2014 10 years P 62,000 SYD
B 1,020,000 2015 15,000 60,000 Working Hours
hours
C 1,600,000 2016 15 years 100,000 Straight Line
D 1,600,000 2018 10 years 100,000 Double Declining
The following is a summary of 2020 transactions:
A. On May 5, Machinery A was sold for P 260,000 cash and the sale was
recorded by the bookkeeper as debit to Cash and Credit to machinery
accounts for the proceeds.
B. On December 31, 2020, it was ascertained that Machinery B has been
used for a cumulative 13,100 hours, 2,100 of which was utilized in 2020.
Starting 2020, however, the management revised the estimate of the total
useful life from 15,000 hours to 18,000 hours with a revised salvage value of
P 36,000.
C. On December 31, 2020, before computing for depreciation expense on
Machinery C, the management decided that the remaining useful life is 10
years from January 1, 2020.
D. On December 31, 2020, it was discovered that the plant asset purchased
in 2019 has been charged to repairs expense in 2019. The asset cost P
440,000 and had a useful life of 10 years with no salvage value.
Management has decided to use double declining balance method for this
asset and was referred to as Machinery F.
What is the depreciation expense on Machinery B for 2020?
Select one or more:
P 84,000
P 134,400
P 142,800
P 100,400

Question 42
On January 1, 2021 Buckle Co. purchased a machine that had a list price of
₱46,320. Buckle Co. paid cash of ₱18,000 and executed a one-year non-
interest-bearing note for the balance. The going rate of interest was 18%.
The machine has a 6-year life and no residual value. Depreciation expense
on the SYD basis at the end of 2021 is:
Select one or more:
13,324
14,690
8,092
12,000

Question 43
The accountant for Baccah Inc. established a petty cash fund of ₱1,400.
During September, the fund was depleted by the following disbursements:

Shipping ₱74
expense ................................... 0
Travel 240
expense .........................................
.
Postage 230
expense .........................................
Miscellaneous 170
supplies ..................................
In addition to receipts for the above items, the petty cash box contained ₱8
in coins and an IOU of ₱8 from the secretary handling the fund. The company
uses a cash over and short expense account, as needed. The company
decided to decrease the petty cash fund to ₱1,000.
How much is the cash (shortage) or overage?
Select one or more:
4
12
(12)
(4)

Question 44
Pinay Corporation has the following portfolio of financial instruments as of
December 31, 2018. All securities are acquired at the beginning of 2018.
Security Denomination/Face Value Acquisition Costs
Alpha Shares 100,000 shares P 5,250,000
Beta Shares 40,000 shares 2,350,000
10% Delta Bonds, 3 years P 2,000,000 par 1,951,126
Additional Notes:
a. Alpha shares were acquired and were designated as financial assets at
fair value through profit or loss. The shares were acquired at P 52.50 per
share, inclusive of a P 2.50 per share transaction cost. Half of Alpha shares
were sold at P 58 per share on July 1, 2019.
b. Beta shares were designated as financial assets at fair value through
other comprehensive income/losses. The shares were acquired at P 60 per
share, inclusive of a P 1.25 per share transaction cost. 15,000 of these
shares were sold on August 1, 2019 at P 59 per share.
c. The Delta Bonds were acquired when the prevailing interest rate was
11%. Interests are collectible every December 31. Half of the Delta bonds
were sold on June 30, 2019 at P 1.1Million.
d. Additional information on the securities are as follows:
Security Fair Value, December 31, Fair Value, December 31,
2018 2019
Alpha Shares P 55 per share P 62 per share
Beta Shares P 57.50 per share P 64 per share
 10% Delta Bonds, 3 9% yield, P 2,035,182 12% yield, ?
years
Assuming that the company’s business model has an objective of holding
debt securities to collect contractual cash flows, what is the total carrying
value of investments that shall be presented as financial asset fair value
through profit or loss (trading securities)?
Select one or more:
P 4,082,143
P 3,100,000
P 4,700,000
P 5,064,285

Question 45
Light Company bought a machine for ₱300,000 on January 1, 2018. The
machine's useful life is 10 years and it is estimated to have a zero residual
value and is depreciated using the straight-line method. The revalued
amount of the machine is as follows:
December 31 Fair values of the machine
2018 ₱ 360,000
2019 335,000
2020 320,000
The enacted tax rate was 30% for each year
The amount of revaluation surplus transferred to retained earnings in 2019 is
Select one or more:
7,000
4,333
6,667
10,000

Question 46
Given the list of securities and other assets that may qualify as investment.
Equity Securities of another company where no control nor P 100,000
significant influence exists. The company elected to report gains
and losses in the profit and loss
Equity Securities of another company where no control nor 150,000
significant influence exists. The company elected to report gains
and losses in the other comprehensive income/loss
20% Equity securities of another company quoted in an active 500,000
market
51% Equity securities of another company quoted in an active 1,400,000
market
Equity securities of the company quoted in an active market 500,000
reacquired with the intention of reissuance in the latter period for
short term profit
Debt security of another company quoted in an active market. 100,000
Business model of the company has an objective to hold debt
securities for short term profits
Debt security of another company quoted in an active market. 500,000
Business model of the company has an objective of collecting
contractual cash flows from the bonds which are primarily in the
form of interest and principal
Real Property held for sale in the normal course of business 500,000
Real Property held for speculation purposes 700,000
Real Property held as a current factory site 1,000,000
Real Property of a manufacturing business being leased out to 900,000
another party under operating lease
Land held for undetermined future purpose 800,000
Land held to be used as a future plant site 400,000
Real Estate being developed as an investment property 300,000
How much from the list above is to be categorized as investment property?
Select one or more:
P 3,100,000
P 2,800,000
P 2,400,000
P 2,700,000

Question 47
Light Company bought a machine for ₱300,000 on January 1, 2018. The
machine's useful life is 10 years and it is estimated to have a zero residual
value and is depreciated using the straight-line method. The revalued
amount of the machine is as follows:
 December 31 Fair values of the machine
2018 ₱ 360,000
2019 335,000
2020 320,000
The enacted tax rate was 30% for each year
The revaluation surplus in the equity section of Light Company’s December
31, 2018 statement of financial position is
Select one or more:
63,000
90,000
60,000
39,000

Question 48
Benshoppe Inc. had the following portfolio of financial assets as of December
31, 2014. All the financial assets were acquired in 2014:
Financial Assets Cost
Aye Corporation stock, 20,000 shares P 590,000
Bee Inc. Stocks, 40,000 shares 1,100,000
Cee Co 10%, P2M bonds 1,973,000
Dee Corp. Stocks, 50,000 shares 2,400,000

Additional Notes:
a. Aye Corporation shares were acquired with the intention of generating
short term profits from the shares’ price fluctuation. The company paid P
29.50 per share, which included the P .50 per share broker’s fees and
commissions. The shares were acquired on February 20, 2014. A P 2 per
share cash dividends were received on March 30. These dividends were
declared by Aye Corporation. On January 20, 2014 to stockholders as of
record date March 1, 2014.
b. The company paid P 27.50 per shares, including P 0.50 per share
broker’s fee on the acquisition of Bee, Inc. on March 1, 2014. These shares
were acquired for trading purposes. A P 3 per share dividend were received
from the said shares on May 3, 2014. These dividends were declared on April
1 to stockholders’ as of record date April 20.
c. Cee Co. bonds which pay semiannual interest every June 30 and
December 31, were acquired on October 1, 2014 at P 1,973,000, when the
prevailing intertest rate on similar instruments was 12%. The bonds shall
mature on December 31, 2016. The company has a business model of
holding debt securities for short term profits.
d. Dee Corporation stocks were acquired P 48 per share, inclusive of a P 3
per share broker’s fees and commission s on June 30, 2014. Dee Corporation
has a total of P 200,000 shares outstanding on the same date. The company
received P 5 dividends per share from Dee Corporation on December 20,
2014.
e. The following were deemed relevant at year end, and no entries had
been made yet by the company to reflect any of the following information:
Aye Bee, Cee Dee
Corporation Incorporation Corporation Corporation
Net Income, P 1,200,000 P 1,500,000 P 2,000,000 P 2,240,000
2014
Fair Value P 35/share P 25/ share 11% P 51/share

What is the carrying value of investment that should be presented as non-

current assets?
Select one or more:
P 2,280,000
P 2,150,000
P 2,550,000
P 2,430,000

Question 49
The Queen Manufacturing Company began operating July 1, 2020, the date
they completed all factory facilities in place, but the company was
incorporated at the beginning of the year. The Land and Building Account at
the end of the first year showed the following items:
DATE PARTICULARS AMOUN
T
January 3 Acquisition of Land and Building 1,108,00
0
January 15 Property Taxes paid on the real property 20,000
February 5 Option Payments 20,000
February Cost of Removal of the old building 22,000
28
March 1 Partial payment on new construction to induce the start 700,000
of construction
March 1 Legal fees paid 15,000
March 1 Insurance Premium paid for I year 24,000
June 1 Second Payment on new construction 600,000
June 30 General Expenses 60,000
July 1 Final Payment of New Construction 200,000
July 1 Construction Gain 500,000
TOTAL 3,269,0
00
December Depreciation at 1% of the balance (32,690)
31
Carrying Value 3,236,31
0

The following notes are relevant to consider:

a. To acquire the land and building, the company paid P 108,000 cash and
10,000 shares of its 10% preference shares with par value of P 100 per share
and with a current selling price of P 120 per share.
b. The property taxes paid was for two year, 2019 and 2020.
c. P 15,000 from the total option payments were for the property acquired
while the balance were for the other real properties not acquired.
d. Legal fees covered the following: Cost of Incorporation, P 9,500;
Examination of the title covering purchase of land, P 4,000; Legal work in
connection with the construction contract, P 1,500.
e. General expenses covered the salaries for the period January 1 to June
30 of the following:
President P 20,000
Plant Superintendent while supervising the construction 12,000
Office Staff 28,000
f. The gain on construction is the difference between the total cost of
construction and the fair value of the asset upon completion.
g. The estimated life of the building is 25 years.
The adjusted ending balance of the building is
Select one or more:
P 1,500,500
b. P 1,521,500
P 1,543,500
P 1,545,500

Question 50
Benshoppe Inc. had the following portfolio of financial assets as of December
31, 2014. All the financial assets were acquired in 2014:
Financial Assets Cost
Aye Corporation stock, 20,000 shares P 590,000
Bee Inc. Stocks, 40,000 shares 1,100,000
Cee Co 10%, P2M bonds 1,973,000
Dee Corp. Stocks, 50,000 shares 2,400,000

Additional Notes:
a. Aye Corporation shares were acquired with the intention of generating
short term profits from the shares’ price fluctuation. The company paid P
29.50 per share, which included the P .50 per share broker’s fees and
commissions. The shares were acquired on February 20, 2014. A P 2 per
share cash dividends were received on March 30. These dividends were
declared by Aye Corporation. On January 20, 2014 to stockholders as of
record date March 1, 2014.
b. The company paid P 27.50 per shares, including P 0.50 per share
broker’s fee on the acquisition of Bee, Inc. on March 1, 2014. These shares
were acquired for trading purposes. A P 3 per share dividend were received
from the said shares on May 3, 2014. These dividends were declared on April
1 to stockholders’ as of record date April 20.
c. Cee Co. bonds which pay semiannual interest every June 30 and
December 31, were acquired on October 1, 2014 at P 1,973,000, when the
prevailing intertest rate on similar instruments was 12%. The bonds shall
mature on December 31, 2016. The company has a business model of
holding debt securities for short term profits.
d. Dee Corporation stocks were acquired P 48 per share, inclusive of a P 3
per share broker’s fees and commission s on June 30, 2014. Dee Corporation
has a total of P 200,000 shares outstanding on the same date. The company
received P 5 dividends per share from Dee Corporation on December 20,
2014.
e. The following were deemed relevant at year end, and no entries had
been made yet by the company to reflect any of the following information:
Aye Bee, Cee Dee
Corporation Incorporation Corporation Corporation
Net Income, P 1,200,000 P 1,500,000 P 2,000,000 P 2,240,000
2014
Fair Value P 35/share P 25/ share 11% P 51/share

Assuming the company’s business model regarding debt securities has an

objective of collecting contractual cash flows, what is the carrying value of
investment that should be presented as non-current?
Select one or more:
d. P 4,360,690
P 4,362,390
c. P 4,395,750
P 4,394,948