Professional Documents
Culture Documents
1 Presented below are changes in all accounts balances of Marvelous Company during the current year, except for retained
On January 1, 2020 Happy Company received a four year P2,500,000.00 loan with interest payment occuring at the end
1 The
on December
interest for31, 2023.
2020 is prevailing market rate of 10% on January 1, 2020 and the market interest rate every January 1 re
year.
In The underlying
conjuction with the fixed
loan,interest rate
the entity is 10%.
entered into a "receive variable, pay fixed" interest rate swap agreement as cash flow
made on December 31 of each year.
The market rate is 8% on January 1, 2021 and 6% on January 1, 2022. Round off present value factor to two decimal pla
a
b
c
d
On January 1, 2020 Joy Company borrowed P3,000,000 from a bank at variable rate for 4 years. Interest will be paid ann
2 principal is due on December 31, 2023.
Under the agreement, the market rate interest every January 1 resets the variable rate for that period and the amount of i
In conjuction with the loan, the entity entered into a "receive variable, pay fixed" interest rate swap agreement as cash flow
The market rates of interest are 6% on January 1, 2020, 8% on January 1, 2021 and 7% on January 1, 2022. Round to tw
a
b
c
d
e
On January 1, 2020 Merry Company received a 5 year variable interest rate loan P3,000,000 with interest payment at the
3 repaid on December 31, 2024.
The interest 1,
On January rate for 2020
2020 MerryisCompany
8% and the rate in
entered each
into suceeding
a "receive year is
variable payequal
pay to market
fixed" interest
interest raterate
swaponagreement
January 1 of each
with fina
made ate the end of each year,
The interest rate swap agreement is designated as cash flow hedge.
On January 1, 2021, the market rate of interest is 9%. The present value of ordinary annuity of 1 at 9% for four periods is
On January 1, 2022, the market rate of interest is 12%. The present value of ordinary annuity of 1 at 12% for four periods
a
b
c
d
Sugar Company operate a five-star hotel. The entity makes very detailed long term planning. On October 1, 2020 the enti
4 purchase 4,000 kilos of Australian lobster
LobsterononJanuary
January1,1,2022.
2022 at a price of P2,400,000.00. The price of the Australian lob
2020.
ThisDecember
On forward contract
31, 2020was
thedesignated as aofcash
price of a kilo flow hedge.
Australian lobster was P750.00. On December 31, 2021 and January 1, 2022
P550.00
The appropriate discount rate throughout this period is 10%. The Present Value of 1 at 10% for one period is 0.91
a
b
c
Presented below are changes in all accounts balances of Marvelous Company during the current year, except for retained earnings
Cash
Accounts Receivable
Inventory
Investments
Accounts Payable
Bonds Payable
Ordinary shares
Share premium
There wre no other entry for Retained earnings except for net income and a dividend declaration of P19,000 which was paid du
Compute
Net Income for the year
On January 1, 2020 Happy Company received a four year P2,500,000.00 loan with interest payment occuring at the end each year a
on December
The interest for31, 2023.
2020 is prevailing market rate of 10% on January 1, 2020 and the market interest rate every January 1 resets the var
year.
In The underlying
conjuction with the fixed
loan,interest rate
the entity is 10%.
entered into a "receive variable, pay fixed" interest rate swap agreement as cash flow hedge. Th
made on December 31 of each year.
The market rate is 8% on January 1, 2021 and 6% on January 1, 2022. Round off present value factor to two decimal places.
Compute
The notional value of the forward contract
The derivative asset or liabilty on December 31, 2020
The derivative asset or liabilty on December 31, 2021
Accounts Receivable
Accounts Payable
In 2020, accounts written off amounted to P60,000. Sales returned amounted to P125,000, of which amount of P25,000 was pa
Cash receipts of customers after P250,000 discounts totaled P4,000,000
Purchase returns amounted to P200,000.00 of which an amount of P50,000 was received from suppliers.
Cash payments to trade cerditors amounted to P2,500,000 after discounts of P100,000.00
Under accrual basis, compute
Gross sales
Net Sales
Gross Purchases
Net Purchases
year, except for retained earnings
Increase Cash
(Decrease) Accounts Receivable
₱79,000.00 Inventory
45,000.00 Investments
127,000.00 Accounts Payable
(47,000.00) Bonds Payable
(51,000.00) Ordinary shares
82,000.00 Share premium
125,000.00 Balance (A=L+OE)
13,000.00
increase in Retained Earnings
ation of P19,000 which was paid during the year. Dividends Declared
Net Income
₱54,000.00
Ending
Dividends Declared
Balance
ent occuring at the end each year and the principal to be repaid
rate every January 1 resets the variable rate of interest for that
agreement as cash flow hedge. The interest rate swap will be 12.31.2020
cash
actor to two decimal places. Loans payable
State asset or
liability Interest Expense
129,000.00 liability Cash
183,000.00 liability
150,000.00 @10%
@8%
PVF
Interest Rate Liability
@10%
@6%
PVF
Interest Rate Liability
nterest will be paid annually to the bank on December 31 and the
@6% Fixed
iod and the amount of interest to be paid on December 31. @8% Variable
agreement as cash flow hedge. Difference
ary 1, 2022. Round to two decimals the PVF PV factor
State asset or
liability
154,800.00 asset @6% Fixed
78,600.00 liability @7% Variable
180,000.00 Difference
240,000.00 PV factor
210,000.00
interest payment at the end of each year and the principal to be
e onagreement
wap January 1 of each
with year. institution. The swap payments are
financial
@8%
t 9% for four periods is 3.24 @9%
at 12% for four periods is 2.40
PVF
State receivable
or payable Receivable
97,200.00 Receivable
288,000.00 Receivable
240,000.00
270,000.00
October 1, 2020 the entity determined that it would need to
ice of the Australian lobster was P600 per kilo on October 1,
e period is 0.91
State asset or
liability
2,400,000.00
546,000.00 Asset
200,000.00 Liability
2019 2020
600,000.00 675,000.00
750,000.00 925,000.00
Gross Sales
Sales returns
Sales Discounts
Net sales
Gross Purchases
Purchase returns
Purchase Discounts
Net sales
Assets Liabilities Equity
₱79,000.00
45,000.00
127,000.00
(47,000.00)
(51,000.00)
82,000.00
₱125,000.00
13,000.00
₱204,000.00 ₱31,000.00 ₱138,000.00
35,000.00
(19,000.00)
₱16,000.00
Retained Earnings
₱35,000.00 0.00 beginning balance
19,000.00 54,000.00 Net Income
₱54,000.00 ₱54,000.00
₱2,500,000.00
₱2,500,000.00
250,000.00
250,000.00
₱250,000.00
200,000.00
₱50,000.00
2.58 0.93
₱129,000.00 0.86
0.79
₱250,000.00
150,000.00
₱100,000.00 0.94
1.83 0.89
₱183,000.00
₱180,000.00
240,000.00
₱60,000.00 0.93
2.58 0.86
₱154,800.00 0.79
₱180,000.00
210,000.00
₱30,000.00 0.93
2.62 0.87
₱78,600.00 0.82
Accounts Receivable
₱600,000.00 ₱675,000.00 Ending Sales Returns
4,485,000.00 60,000.00 Accounts written off Accounts Receivable
100,000.00 Sales return Cash
4,000,000.00 Cash receipts
250,000.00 Sales Discount Cash
₱5,085,000.00 ₱5,085,000.00 Sales Discounts
0.00 Accounts Receivable
Accounts Payable
₱925,000.00 ₱750,000.00 Beginning Cash
150,000.00 2,925,000.00 Purchases Accounts payable
100,000.00
2,500,000.00 Purchase returns
₱3,675,000.00 ₱3,675,000.00
0.00
Accounts Payable
Purchase discounts
Cash
₱4,485,000.00
125,000.00
250,000.00
₱4,110,000.00
₱2,925,000.00
200,000.00
100,000.00
₱2,625,000.00
125,000.00
Accounts Receivable 100,000.00
25,000.00
4,000,000.00
250,000.00
Accounts Receivable 4,250,000.00
50,000.00
150,000.00
2,600,000.00
Purchase discounts 100,000.00
2,500,000.00