SALE AND LEASEBACK

1. On January 1, 2013, Hooks Oil Company sold equipment with a carrying amount
of P1,000,000 and a remaining useful life of 10 years to Maco Drilling for
P1,500,000. Hooks immediately leased the equipment back under a 10-year
finance lease with a present value of P1,500,000 and will depreciate the
equipment using the straight line method. Hooks made the first annual lease
payment of P244,120 on December 31, 2013. The implicit interest rate in the
lease is 10%. In Hook’s December 31, 2013 statement of financial position, what
amount should be reported as unearned gain on equipment sale?
a. 500,000 b. 450,000 c. 255,880 d. 0

2. On December 31, 2013, Albocasser Company purchased a tractor from Cheliff

Company. Simultaneous with the sale, Cheliff leased back the tractor for 12 years
for use in the new farm that it is developing. The sale price of the tractor was
P7,800,000, while the carrying amount in the books of Cheliff on the date of the
sale was P5,850,000. Cheliff’s engineers have estimated that the remaining
economic life of the tractor is 15 years. Cheliff is a wholly-owned subsidiary of a
US entity. It is required to follow US generally accepted accounting principles in
the reporting package for consolidation. What is the amount that Cheliff should
report as deferred gain from the sale of the tractor on December 31, 2013?
a. 1,950,000 b. 1,820,000 c. 1,787,500 d. 0

3. On January 1, 2013, Baker Company sold equipment to an affiliated entity for

P5,700,000. The equipment had a carrying amount of P4,500,000 and a
remaining life of five years. On the same date, the entity leased back the
equipment at P1,350,000 per year payable in advance for a five-year period. The
lessor’s implicit interest rate in the lease is 10%. The entity used the double
declining balance method of depreciation. What is the unearned income on the
sale and leaseback on December 31, 2013?
a. 1,200,000 b. 960,000 c. 720,000 d. 0

4. On January 1, 2013, Accord Company sold a building with a carrying amount of

P4,200,000 to another entity for P4,050,000. The entity immediately entered into
a leasing agreement wherein it would lease the building back for an annual
 payment of P640,000. The term of the lease is 10 years, the expected remaining
useful life of the building. The first annual lease payment is to be made
immediately, and future payments will be made on January 1 of each succeeding
year. The lessor’s implicit interest rate is 12%. What amount of loss on sale and
leaseback should be recognized for 2013?
a. 150,000 b. 135,000 c. 15,000 d. 0

(For questions 5 & 6) Sensible Company sold an item of plant and

machinery on January 1, 2013 for P2,500,000 which is equal to fair value. The
carrying amount of the asset was P2,000,000. The entity leased the item back on
that date for remaining useful life of 5 years. Lease payments are P700,000 on
January 1 each year.

5. What is the gain on disposal to be recognized for 2013?

a. 500,000 b. 100,000 c. 250,000 d. 0

6. What is the total finance charge over the lease term?

a. 1,500,000 b. 1,000,000 c. 500,000 d. 0

(For questions 7 & 8) In an attempt to alleviate liquidity problems, Banco

Company entered into an agreement on January 1, 2013 to sell the processing
plant to another entity for P3,500,000 which is the fair value of the plant. At the
date of sale, the plant had a carrying amount of P2,750,000. The entity
immediately leased the processing plant back from the buyer. The terms were:
Annual payment in arrears, commencing
December 31, 2013 700,000
Reimbursement to the lessor for maintenance cost
Included in the annual payment 35,000
Lease term 6 years
Economic life of plant 8 years

7. What is the deferred gain on the sale and leaseback on December 31, 2013?
a. 750,000 b. 625,000 c. 656,250 d. 0

8. What is the total finance charge over the lease term?

a. 1,240,000 b. 1,820,000 c. 700,000 d. 490,000

9. On January 1, 2013, Halo Company sold a computer system to Lark Company

for P2,550,000 and immediately leased the computer system back. The
 computer was carried on Halo’s books at an amount of P2,250,000. The term of
the noncancelable lease is 10 years and title will transfer to Halo at the end of the
lease term. The lease agreement required equal rental payments of P415,000 at
the end of each year. The incremental borrowing rate for Halo is 12% but Halo is
aware that Lark set the annual rental to ensure a rate of return of 10%. The
computer has a fair value of P2,550,000 on January 1, 2013 and an estimated
economic life of 12 years. Halo paid executor cost of P45,000 for the current
year. Which of the following would be recorded by Halo on December 31, 2013?
a. Debit leased computer P2,550,000
b. Credit deferred gain P300,000
c. Debit deferred gain P25,000
d. Debit deferred gain P30,000

10. On December 31, 2013, Bain Company sold a machine with 12-year useful life
to another entity and simultaneously leased it back for one year.

Sale price 360,000

Carrying amount 330,000
Present value of reasonable lease rentals
(P3,000 for 12 months @ 12%) 34,100
What revenue from the sale should be reported in 2013?
a. 34,100 b. 30,000 c. 4,100 d. 0

11. On December 31, 2013, Mae Company sold an equipment with useful life of 10
years and simultaneously leased back the equipment for 2 years.

Sale price 7,500,000

Carrying amount 5,000,000
Fair value of the equipment on the date of sale 6,000,000

What amount of gain should be reported in 2013?

a. 2,500,000 b. 1,500,000 c. 1,000,000 d. 1,750,000

12. On December 31, 2013, Thunder Company sold land with a cost of P1,500,000
to Victoria Company for P2,300,000 when the land’s fair value was P2,150,000.
Thunder Company immediately entered into a cancellable lease agreement to
use the land for two years at an annual rental of P20,000. What amount of profit
should Thunder record on the sale of land for 2013?
a. 150,000 b. 800,000 c. 650,000 d. 725,000
 13. On June 30,2013, Lee Company sold an equipment for P5,500,000. The
equipment had a carrying amount of P5,000,000 and a remaining life of 10 years.
That same day, the entity leased back the equipment at P15,000 per month for 2
years with no option to renew the lease or repurchase the equipment. The
present value of the lease payments using the appropriate interest rate was
P318,650 on June 30, 2013. What is the rent expense for the year ended
December 31, 2013?
a. 110,000 b. 90,000 c. 50,000 d. 40,000

14. On June 30, 2013, Pam Company sold equipment for P3,500,000. The
equipment had a carrying amount of P3,150,000 and a remaining useful life of 10
years. That same day, the entity leased back the equipment at P35,000 per
month for 5 years with no option to renew the lease or repurchase the
equipment. What amount should be reported as rent expense for 2013?
a. 420,000 b. 210,000 c. 175,000 d. 140,000

15. On January 1, 2013, Tripoli Company sold a machine for P3,000,000. The fair
value on the date of sale was P3,500,000. The machine had a carrying amount
of P4,000,000 and remaining life of 10 years. The entity immediately leased back
the machine at an annual rental of P60,000 for four years. It was determined that
the annual rental is sufficiently lowercompared to the market rent of a similar
asset. What total amount should be recognized in profit or loss for 2013?
a. 1,060,000 b. 310,000 c. 185,000 d. 60,000

DIRECT FINANCING LEASE – LESSOR

(For questions 16 & 17) Camia Company is in the business of leasing new
sophisticated equipment. As a lessor, the entity expects 12% return. At the end of
the lease term, the equipment will revert to Camia Company. On January 1,
2013, an equipment is leased to another entity under a direct financing lease.

Cost of equipment to Camia 5,500,000

Residual value – unguaranteed 400,000
Annual rental payable in advance 959,500
Useful life and lease term 8 years
Implicit interest rate 12%
First lease payment January 1, 2013
16. What is the unearned interest income on January 1, 2013?
a. 2,576,000 b. 2,176,000 c. 1,776,000 d. 1,616,500

17. What is the interest income for 2013?

a. 322,000 b. 544,860 c. 660,000 d. 496,860

18. On January 1, 2013, Nueva Company, acting as a lessor, leased an equipment

for ten years at an annual rental of P1,200,000 payable by Caster Company, the
lessee, at the beginning of each year under a direct financing lease. The
equipment had a cost of P8,400,000 with an estimated life of 12 years and no
residual value. The implicit rate is 9%. What amount of interest income should be
reported in 2013?
a. 500,000 b. 648,000 c. 756,000 d. 360,000

(For questions 19 & 20) On January 1, 2013, Glade Company leased a

computer equipment to Blass Company under a direct financing lease. The
equipment has no residual value at the end of the lease and the lease does not
contain bargain price option. The entity wishes to earn 8% interest on a 5-year
lease of equipment with a cost of P3,234,000. The present value of an annuity
due of 1 at 8% for 5 years is 4.312.

19. What is the total interest revenue that Glade will earn over the lease term?
a. 1,293,600 b. 1,394,500 c. 516,000 d. 750,000

20. What is the interest revenue to be reported by Glade for 2013?

a. 258,720 b. 198,720 c. 103,200 d. 646,800

21. Cassandra Company acquired a specialized packaging machine for P3,000,000

cash and leased it for a period of six years, after which the machine is to be
returned to Cassandra Company. The unguaranteed residual value of the
machine is P200,000. The lease terms are arranged so that a return of 12%
earned by Cassandra. The PV of 1 at 12% for six periods is .51, and the PV of an
annuity in advance of 1 at 12% for six periods is 4.60. What is the annual lease
payment payable in advance required to yield the desired return?
a. 630,000 b. 652,174 c. 608, 695 d. 732,000
22. Magnum Company had an asset costing P5,239,000. The asset is leased on
January 1, 2013 to another entity. Five annual lease payments are due each
January 1 beginning January 1, 2013. The lessee guaranteed the P2,000,000
residual value of the asset as of the end of the lease term on December 31,
2017. The implicit interest rate is 8%. The PV of 1 at 8% for 5 periods is .68, and
the PV of an annuity of 1 in advance at 8% for 5 periods is 4.31. What is the
annual lease payment?
a. 1,215,545 b. 1,531,090 c. 900,000 d. 751,500

23. Irene Company decided to enter the leasing business. The entity acquired a
specialized packaging machine for a period of six years, after which title to the
machine is transferred to the lessee. The six annual lease payments are due
each January 1 and the first payment was made on January 1, 2013. The
residual value of the machine is P200,000. The lease terms are arranged so that
a return of 12% is earned by Irene Company. The present value of 1 at 12% for
six periods is 0.51, and the present value of an annuity in advance of 1 at 12%
for six periods is 4.60. What is the annual lease rental payable in advance
required to yield the desired return?
a. 500,000 b. 477,826 c. 383,333 d. 460,000

24. Lyle Company entered into a finance lease on January 1, 2013. A third party
guaranteed the residual value of the asset under the lease estimated to be
P120,000 on January 1, 2018, the end of the lease term. Annual lease payments
are P100,000 due each December 31, beginning December 31, 2013. The last
payment is due December 31, 2017. Both the lessor and lessee used 10% as the
interest rate. The remaining useful life of the asset was six years at the
commencement of the lease.

The PV of 1 at 10% for 5 periods is .62, and the PV of an ordinary annuity of 1 at

10% for 5 periods is 3.79. What is the lease receivable of the lessor and lease
liability of the lessee at the commencement of the lease?
Lease receivable Lease liability
a. 453,400 453,400
b. 379,000 379,000
c. 453,400 379,000
 d. 379,000 453,400

25. On December 31, 2013, Benz Company, a lessor, sold machinery that it had
been leasing under a direct financing lease. On January 1, 2013 after receipt of
the lease payment for the year, the following account balances were associated
with the lease:

Gross lease receivable 5,850,000

Unearned interest income 1,000,000
Present value of lease receivable 4,850,000

The interest rate implicit in the lease is 10%. On December 31, 2013, Benz
Company sold the leased machinery to the lessee for P3,250,000 cash. What is
the loss on sale of machinery that should be recognized on December 31, 2013?
a. 2,085,000 b. 1,600,000 c. 2,600,000 d. 2,015,000

SALES TYPE LEASE – LESSOR

26. Howe Company leased equipment to Kew Company on January 1, 2013, for an
eight-year period expiring December 31, 2020. Equal payments under the lease
are P500,000 and are due on January 1 of each year. The first payment was
made on January 1, 2013. The selling price of the equipment is P2,900,000. The
lease is appropriately accounted for as a sales-type lease. The present value of
the lease payments at an implicit interest rate of 12% is P2,780,000. What
amount of gross profit on sales should be reported for 2013?
a. 900,000 b. 780,000 c. 240,000 d. 333,600

27. Liza Company is a car dealer. On January 1, 2013, the entity entered into a
finance lease with a customer under which the customer would pay P200,000 on
January 1 each year for 5 years, commencing in 2013. The cost of the car is
P600,000 and the cash selling price was P750,000. The entity paid legal fees of
P20,000 to a law firm in connection with the arrangement of the lease. What
amount of the gross profit on sale should be recognized for 2013?
a. 150,000 b. 130,000 c. 20,000 d. 0
 (For questions 28-30) Vanderbilt Company is a dealer in machinery. On
January 1, 2013, machinery was leased to another entity with the following
provisions:
Annual rental payable at the end of each year 3,000,000
Lease term and useful life of machinery 5 years
Cost of machinery 8,000,000
Residual value – unguaranteed 1,000,000
Implicit interest rate 12%
PV of an ordinary annuity of 1 for 5 periods at 12% 3.60
PV of 1 for 5 periods at 12% 0.57

At the end of the lease term on December 31, 2017, the machinery will revert
to Vanderbilt. Vanderbilt incurred initial direct cost of P300,000 in finalizing the
lease agreement.

28. What is the unearned interest income on January 1, 2013?

a. 4,630,000 b. 4,200,000 c. 5,200,000 d. 3,630,000

29. What amount should be reported as gross profit on sale in 2013?

a. 7,700,000 b. 3,070,000 c. 2,500,000 d. 3,370,000

30. What is the interest income for 2013?

a. 1,364,400 b. 1,296,000 c. 1,800,000 d. 926,000

(For questions 31-33) Reagan Company used leases as a method of selling

products. In 2013, the entity completed construction of a passenger ferry. On
January 1, 2013, the ferry was leased to the Super Ferry Line on a contract
specifying that ownership of the ferry will transfer to the lessee at the end of
the lease period. Annual lease payments do not include executor costs.

Other terms of the agreement are as follows:

Original cost of the ferry 8,000,000

Fair value of ferry at lease date 12,555,000
Lease payments payable in advance 1,500,000
Estimated residual value 2,000,000
Implicit interest rate 12%
Date of first lease payment January 1, 2013
Lease term 20 years
Present value of an annuity due of 1 at 10% for 20 periods 8.37
Present value of 1 at 12% for 20 periods 0.10
31. What is the unearned interest income on January 1, 2013?
a. 17,445,000 c. 19,445,000
b. 19,245,000 d. 22,000,000

32. What is the gross profit on sale for 2013?

a. 6,555,000 b. 4,555,000 c. 4,755,000 d. 4,355,000

33. What is the interest income for 2013?

a. 1,506,600 b. 1,524,600 c. 1,326,600 d. 1,350,600

(For questions 34-36) Marianas Company adopted the policy of leasing as

the primary method of selling ots products. The entity’s main product is a small
helicopter that is very popular among politicians and entity managers. Marianas
Company constructed such a helicopter fo Jade Company at a cost of
P8,500,000.
Financing the construction was at a 14% rate. The terms of the lease provided
for annual advance payments of P2,500,000 to be paid over 10 years with the
ownership transferring to the lessee at the end of the lease period. It is
estimated that the helicopter will have a residual value of P1,600,000 at that
date.
The lease payments began January 1, 2013. Marianas Company incurred initial
direct cost of P500,000 in financing the lease agreement with Jade. The sale
price of the helicopter is P14,875,000. The present value of an annuity due of 1
at 14% for 10 periods is 5.95.

34. What is the gross profit on sale that should be recognized by Marianas
Company?
a. 5,875,000 b. 6,375,000 c. 4,275,000 d. 4,775,000

35. What is the unearned interest income on January 1, 2013?

a. 10,125,000 b. 11,725,000 c. 9,625,000 d. 8,525,000

(For questions 36 & 37) Easter Company leased equipment to Faye Company
on January 1, 2013. The lease is for an eight-year period expiring December 31,
2020. The first eight annual payments of P900,000 was made on January 1,
2013. The entity had purchased the equipment on December 29, 2012 for
 P4,800,000. The lease is appropriately accounted for as a sales type lease. The
present value on January 1, 2013 of all rent payments over the lease term
discounted at a 10% interest rate was P5,280,000.

36. What is the gross profit on sale for 2013?

a. 1,920,000 b. 2,400,000 c. 480,000 d. 240,000
37. What amount of interest revenue should be recorded in 2014?
a. 490,000 b. 480,000 c. 438,000 d. 240,000

(For questions 38 & 39) Hazel Company leased machinery to Anne Company
on July 1, 2013 for a ten-year period expiring June 30, 2023. Equal annual
payments under the lease are P750,000 and are due on July 1 of each year. The
first payment was made on July 1, 2013. The implicit rate of interest is 9%. The
cash selling price of the machinery is P5,250,000 and the carrying amount is
P4,650,000. The lease is appropriately recorded as a sales type lease.

38. What is the gross profit on sale for 2013?

a. 600,000 b. 300,000 c. 472,500 d. 0

39. What amount of interest revenue should be recorded for 2013?

a. 175,500 b. 236,250 c. 405,000 d. 202,500

FINANCE LEASE – LESSEE

40. Elysee Company leased a machine with a fair value of P1,650,000 for a period of
5 years under a finance lease. The initial direct costs included in negotiating the
lease amounted to P12,500. The present value of the minimum lease payments
discounted at the rate implicit in the lease is P1,584,000. At what amount should
the machine be recognized initially in Elysee’s financial statement?
a. 1,650,000 b. 1, 596,500 c. 1,662,500 d. 1,584,000

41. Mindoro Company leased a land and building for 20 years, the useful life of the
building, with effect from January 1, 2013. At that date, the fair value of the
leasehold interest was P7,500,000 and of which P6,000,000 was attributable to
the building. Annual rentals of P800,000 are payable in advance on January 1.
What amount should be recognized as an operating lease expense for 2013?
a. 800,000 b. 640,000 c. 160,000 d. 0
42. Casanova Company leased a warehouse with adjoining land for a period of 15
years. The fair values of the leasehold interests in the land and the warehouse
are P5,000,000 and P2,500,000 respectively. The land has an indefinite
economic life whereas the warehouse has a useful life of 15 years. Title to the
land is not expected to pass at the end of the lease. At what amount should the
asset in relation to finance lease be recognized in the financial statements of the
lessee?
a. 7,500,000 b. 5,000,000 c. 2,500,000 d. 0

43. Neal Company entered into a nine-year finance lease on a warehouse on

December 31, 2013. Lease payment of P520,000 which includes real estate
taxes and other executory cost of P20,000, are due annually, beginning on
December 31, 2014 and every December 31 thereafter. The interest rate implicit
in the lease is 9%. The rounded present value of an ordinary annuity of 1 for nine
years at 9% is 5.6. What amount should be reported as lease liability on
December 31, 2013?
a. 2,800,000 b. 2,912,000 c. 4,500,000 d. 4,680,000

44. Robbin Company leased a machine from Ready Leasing Company. The lease
qualifies as a finance lease and requires 10 annual payments of P100,000
beginning immediately. The lease specifies an interest rate of 12% and a
purchase option of P100,000 at the end of the tenth year, even though the
machine’s estimated value on that date is P200,000.

Present value of an annuity due (in advance)

of 1 at 12% for 10 periods 6.328
Present value of 1 at 12% for 10 periods 0.322

What amount should be recorded as lease liability at the beginning of the lease
term?
a. 621,600 b. 648,600 c. 665,000 d. 697,200
45. Helen Company is a lessee under a finance lease. The asset is recorded at
P4,500,000 and has an economic life of 8 years. The lease term is 5 years. The
asset is expected to have a fair value of P500,000 at the end of 8 years. The
lease agreement provides for the transfer of tile of the asset to the lessee at the
 end of the lease term. What amount of depreciation expense should be recorded
for the first year of the lessee?
a. 900,000 b. 800,000 c. 600,000 d. 500,000

46. Miracle Company leased machinery with useful life of 10 years for 10 years on
January 1, 2013. At that date, the fair value of the machinery was P4,900,000.
Annual rentals of P700,000 are payable in advance on January 1 and the interest
rate implicit in the lease is 9%. What is the total lease liability (principal and
interest) which should be recognized on December 31, 2013?
a. 4,578,000 b. 4,641,000 700,000 d. 0

47. On January 1, 2013, Harrow Company as lessee signed a five-year

noncancelable equipment lease with annual payments of P1,000,000 beginning
December 31, 2013. The entity treated this transaction as a finance lease. The
five lease payments have a present value of P3,790,000 at January 1, 2013
based on interest of 10%. What amount should be reported as interest expense
for the year ended December 31, 2013?
a. 379,000 b. 279,000 c. 242,000 d. 0

48. Yemen Company leased an equipment for 6 years from another entity on
January 1, 2013. The entity recorded the asset at P4,800,000 which included
bargain purchase option of P100,000. The equipment had an eight-year useful
life. On January 1, 2019, the entity did not exercise the bargain purchase option.
What is the loss on finance lease to be recognized in 2019?
a. 1,325,000 b. 1,425,000 c. 200,000 d. 0

OPERATING LEASE

49. On December 1, 2013, Tell Company leased office space for five years at a
monthly rental of P600,000. On the same date, the entity paid the lessor the
following amounts:

Bonus to obtain lease 300,000

First month’s rent 600,000
Last month’s rent 600,000
Security deposit refundable at lease expiration 800,000
Installation of new walls and offices 3,600,000
 What total amount of the expenses relating to utilization of the office space
should be reported for 2013?
a. 1,400,000 b. 1,200,000 c. 665,000 d. 600,000

50. On July 1, 2013, Kemp Company leased office space for five years at P150,000
a month. On that date, the entity paid the lessor the following amounts:

Rent security deposit 350,000

First month’s rent 150,000
Last month’s rent 150,000
Non-refundable reimbursement to lessor for
Modifications to the leased premises 900,000
1,550,000
The entity made timely rental payments from August 1 through December 1,
2013. What portion of payments to the lessor should be deferred on December
31, 2013?
a. 1,400,000 b. 1,310,000 c. 1,250,000 d. 500,000

51. On January 1, 2013, Park Company signed a 10-year operating lease for office
space at P960,000 per year. The lease included a provision for additional rent of
5% of annual company sales in excess of P5,000,000. The sales for the year
ended December 31, 2013 totalled P6,000,000. Upon execution of the lease, the
entity paid P240,000 as a bonus for the lease. What is the rent expense for the
year ended December 31, 2013?
a. 984,000 b. 1,010,000 c. 1,034,000 d. 1,250,000

52. As an inducement to enter a lease, Aris Company, a lessor, granted Hompson

Company, a lessee, nine months of free rent under a five year operating lease.
The lease was effective on July 1, 2013and provided for monthly rental of
P1000,000 to begin April 1, 2014. In the income statement for the year ended
June 30,2014, what amount should be reported as rent expense?
a. 1,020,000 b. 900,000 c. 300,000 d. 255,000

53. Jana Company leased a building for 20 years with effect from January 1, 2013.
The useful life of the building is 40 years. As part of the negotiations for the
lease, the lessor granted Jana a rent-free period. Annual rentals of P1,600,000
 are payable in advance on January 1, commencing in 2015. What amount of
rent expense should be recognized for the year ended December 31, 2013?
a. 1,600,000 b. 1,520,000 c. 1,440,000 d. 0

54. On October 1, 2013, Dean Company leased office space at a monthly rental of
P300,000 for 10 years expiring September 30,2023. As an inducement for Dean
to enter into the lease, the ;essor permitted Dean to occupy the premises rent-
free from October 1 to December 31, 2013. For the year ended December 31,
2013, what amount should be reported as rent expense?
a. 900,000 b. 292,500 c. 877,500 d. 0

55. On July 1, 2013, Walton Company leased office premises for a three-year period
at an annual rental of P360,000 payable on July 1 each year. The first rent
payment was made July 1, 2013. Additional on July 1, 2013, the entire paid
P240,000 as a lease bonus to obtain a three year lease instead of the lessor’s
usual term of six years. On December 31, 2013, what amount should be reported
as prepaid rent?

a. 180,000 b. 220,000 c. 240,000 d. 380,000

56. As an incentive to enter a four-year operating lease for a warehouse, Dunhill

Company received an upfront cash of P60,000 upon signing an agreement on
January 1,2013. The annual rental is P1,115,000. What amount should be
recognized as lease expense for 2013?
a. 1,115,000 b. 1,100,000 c. 1,055,000 d. 0

57. As an incentive to enter a noncancelable operating lease for office premises for
10 years, Valley Company as lessor has offered the lessee a rent-free period of 2
years. Annual rental payment under the lease commencing in the third year is
P500,000. What amount of lease income should be recognized by Valley
Company in the first year?
a. 400,000 b. 500,000 c. 450,000 d. 0

58. Wall Company leased office premises to Fox Company for a five-year term
beginning January 1, 2013. Under the terms of the operating lease, rent for the
first year is P800,000 and rent for years 2 through 5 is P1,250,000 per annum.
 However, as an inducement to enter the lease, Wall granted Fox the first six
months of the lease-free rent. What amount should Wall report as a rental
income for 2013?
a. 1,200,000 b. 1,160,000 c. 1,080,000 d. 800,000

59. Conn Company owns an office building and normally charges tenants P3,000 per
square meter per year for office space. Because the occupancy rate is low, Conn
agreed to lease 100 square meters to Hanson Company at P1,200 per square
meter for the first year of a three-year operating lease. Rent for remaining years
will be at the P3,000 rate. Hanson moved into the building on January 1, 2013,
and paid the first year’s rent in advance. What amount of rental revenue should
Conn report from Hanson in the income statement for the year ended September
30, 2013?
a. 90,000 b. 120,000 c. 180,000 d. 240,000

60. On July 1, 2013, Gee Company leased a delivery truck from Marr Company
under a 3-year operating lease. Total rent for the term of the lease will be
P360,000, payable as follows:

12 months at P5,000 = P 60,000

12 months at P7,500 = 90,000
12 months at P17,500 = 210,000

All payments were made when due. On June 30,2015, what amount should be
reported as accrued rent receivable?
a. 210,000 b. 120,000 c. 90,000 d. 0

61. Abe Company, lessor, leased an equipment under an operating lease. The lease
term is 5 years and the lease payments are made in advance on January 1 of
each year as shown in the following schedule:
January 1, 2013 1,000,000
January 1, 2014 1,000,000
January 1, 2015 1,400,000
January 1, 2016 1,700,000
January 1, 2017 1,900,000

On December 31, 2014, what amount should be recognized as rent receivable?

a. 1,400,000 b. 800,000 c. 400,000 d. 0

62. On January 1, 2013, Abba Company leased a building to Bee Company under a
four-year operating lease. The monthly rental for 2013, 2014, 2015, and 2016 is
P100,000, P150,000, P200,000 and P250,000, respectively. Rentals are payable
at the end of each month. All rental payments within the year were made when
due. On December 31, 2014, what amount should be reported as rent
receivable?
a. 1,000,000 b. 1,200,000 c. 600,00 d. 900,000

63. On January 1, 2013, Wren Company leased a building to Brill under an operating
lease for ten years at P500,000 per year, payable the first day of each lease year.
Wren paid P150,000 to a real estate broker as a finder fee. The building is
depreciated P120,000 per year. For 2013, Wren incurred insurance and property
tax expense totalling P90,000. What is the total rent income for 2013?
a. 275,000 b. 290,000 c. 350,000 d. 365,000

64. Rapp Company leased a new machine to Lake Company on January 1, 2013.
The lease expires on January 1,2018. The annual rental is P900,000.
Additionally, on January 1, 2013, Lake paid P500,000 to Rapp as a lease bonus
and P250,000 as a security deposit to be refunded upon expiration of the lease.
What amount of rental revenue should be reported for 2013?
a. 1,400,000 b. 1,2500,000 c. 1,000,000 d. 900,000

65. Jade Company purchased a new machine for P4,800,000 on January 1, 2013
and leased it to East the same day. The machine has an estimated 12-year life
and will be depreciated P400,000 per year. The lease is for a three-year period
expiring January 1, 2016, at an annual rental of P850,000. Additionally, East paid
P300,000 to jade as a lease bonus to obtain a three-year lease. Jade incurred
insurance expense of P80,000 for the leased machine during 2013. What is the
operating profit on the leased asset for 2013?
a. 670,000 b. 550,000 c. 470,000 d. 370,000

66. Myriad Company purchased a tractor on January 1, 2013 at a cost of

P1,600,000 for the purpose of leasing it. The tractor is estimated to have a useful
life of 5 years with residual value of P100,000. Depreciation is on a straight line
basis. On April 1, 2013, Myriad entered into a lease contract for the lease of the
 tractor for a term of 2 years up to March 31, 2015. The lease fee is P50,000
monthly and the lessee paid P600,000, the lease fee for one year. Myriad paid
P120,000 commission associated with negotiating the lease, P15,000 minor
repairs, and P10,000 transportation of the tractor to the lessee during 2013. What
amount of net rent revenue should be reported for 2013?
a. 160,000 b. 235,000 c. 80,000 d. 85,000

67. On January 1, 2013, Glen Company Leased a building to Dix Company for a ten-
year term at an annual rental of P500,000. At inception of the lease, Glen
received P2,000,000 covering the first two years’ rent of P1,000,000 and a
security deposit of P1,000,000. This deposit will not be returned to Dix upon
expiration of the lease but will be applied to payment of rent for the last two years
of the lease. What portion of the P2,000,000 should be reported as current and
noncurrent liability in Glen’s December 31, 2013 statement of financial position?
Current liability Noncurrent liability
a. 0 2,000,000
b. 500,000 1,000,000
c. 1,000,000 1,000,000
d. 1,000,000 500,000

(For questions 68 & 69) On January 1, 2013, Simplex Company leased a

machine to another entity for a four-year period. The annual rentals will be paid
by the lessee beginning December 31, 2013. The lease agreement called for a
10% increase in annual rental per annum. The rental due on December 31, 2016
was P133,100.

68. What is the rental payment due on December 31, 2014?

a. 100,000 b. 121,000 c. 110,000 d. 90,909

69. What is the rental income for the year ended December 31, 2013?
a. 100,000 b. 116,025 c. 105,477 d. 110,000
70. Hutch Company leased equipment to Elder Company on July 1, 2013 for a one-
year period expiring June 30, 2014 for P60,000 a month. On July 1, 2014, Hutch
leased this piece of equipment to Toil Company for a three-year period expiring
June 30, 2017 for P75,000 a month. The original cost of the equipment was
P4,800,000. The equipment which has been continually on lease since July 1,
2009 is being depreciated on a straight line basis over an eight year period with
 no residual value. Both the lease to Elder and the lease to Toil are appropriately
recorded as operating lease. What is the amount of net rental income that would
be reported by Hutch Company for the year ended December 31, 2014?
a. 210,000 b. 450,000 c. 810,000 d. 360,000

71. Barnel Company owns and manages apartment complex. On signing a lease,
each tenant must pay the first and last months’ rent and a P50,000 refundable
security deposit. The security deposits are rarely refunded in total, because
cleaning costs of P15,000 per apartment are almost always deducted. About
30% of the time, the tenants are also charged for the damages to the apartment
which typically cost P10,000 to repair. If a one-year lease is signed on a P90,000
per month apartment, what amount should be reported as refundable security
deposit?
a. 140,000 b. 50,000 c. 35,000 d. 32,000

COMPOUND FINANCIAL INSTRUMENT

72. On December 31, 2013, Fort Company issued 5,000 of 8%, 10-year, P1,000 face
value bonds with detachable share warrants at 110. Each bond carried a
detachable warrant for 10 ordinary shares of Fort Company at a specified option
price of P25 per share. The par value of the ordinary share is P20. Immediately
after issuance, the market value of the bonds without the warrants was
P5,400,000 and the market value of the warrants was P600,000. On December
31, 2013, what is the carrying amount of the bonds payable?
a. 5,000,000 b. 4,950,000 c. 4,900,000 d. 5,400,000

73. On December 31, 2013, Moses Company issued P5,000,000 face value, 5-year
bonds at 109. Each P1,000 bond was issued with 50 detachable share warrants,
each of which entitled the bondholder to purchase one ordinary share of P5 par
value at P25. Immediately after issuance, the market value of each warrant is P5.
The stated interest rate on the bonds is 11% payable annually every December
31. However, the prevailing market rate of interest for similar bonds without
warrants is 12%. The present value of 1 at 12% for 5 periods is 0.57 and the
present value of an ordinary annuity of 1 at 12% for 5 periods is 3.60. On
 December 31, 2013, what amount should be recorded as discount or premium on
bonds payable?
a. 170,000 discount c. 450,000 discount
b. 450,000 premium d. 800,000 discount

74. Moriones Company issued P5,000,000 face value 12% convertible bonds at 110
on January 1, 2013, maturing on January 1, 2018 and paying interest
semiannually on January 1 and July 1. It is estimated that the bonds would sell
only at 103 without the conversion feature. Each P1,000 bond is convertible into
10 ordinary shares with P100 par value. What is the increase in shareholders’
equity arising from the issuance of the convertible bonds on January 1, 2013?
a. 350,000 b. 500,000 c. 150,000 d. 0

75. Susan Company issued 5,000 convertible bonds on January 1, 2013. The bonds
have a three-year term and are issued at 110 with a face value of P1,000 per
bond. Interest is payable annually in arrears at a nominal 6% interest rate. Each
bond is convertible at any time up to maturity into 100 ordinary shares with par
value of P5. When the bonds are issued, the prevailing market interest rate for
similar debt instrument without conversion option is 9%. The present value of 1 at
9% for 3 periods is .77 and the present value of an ordinary annuity of 1 at 9% for
3 periods is 2.53. What is the equity component of the issuance of the convertible
bonds on January 1, 2013?
a. 1,150,000 b. 1,650,000 c. 891,000 d. 391,000

76. Spare Company had outstanding share capital with a par value of P50,000 and a
12% convertible bond payable in the face amount of P10,000,000. Interest
payment dates of the bond issues are June 30 and December 31. The
conversion clause in the bond indenture, entitled the bondholders to receive 40
shares of P20 par value in exchange for each P1,000 bond. On June 30, 2013,
the holders of P5,000,000 face value bonds exercised the conversion privilege.
The market price of the bonds on that date was P1,100 per bond and the market
price of the share was P30. The total unamortized bond discount at the date of
the conversion was P500,000. The share premium from conversion privilege has
 a balance of P2,000,000 on June 30, 2013. What amount of share premium
should be recognized by reason of the conversion of bonds payable into share
capital?
a. 2,000,000 b. 2,750,000 c. 3,000,000 d. 1,750,000

77. On December 31, 2013, Green Company issued 2,000 convertible bonds with a
nominal interest rate of 7% at P2,000 each. Each bond can be converted into 5
new equity shares or redeemed for cash, at the option of the holder, in 5 years’
time. The fair value at that date of similar bonds without the convertibility option
was estimated P1,500 each. What is the amount recognized in equity in respect
of the issuance of convertible bonds on December 31, 2013?
a. 4,000,000 b. 3,000,000 c. 1,000,000 d. 0

78. Clay Company had P600,000 convertible 8% bonds payable outstanding on June
30, 2013. Each P1,000 bond was convertible into 10 ordinary shares of P50 par
value. On July 1, 2013, the interest was paid to bondholders, and the bonds were
converted into ordinary shares, which had a fair value of P75 per share. The
unamortized premium on these bonds was P12,000 at the date of conversion. No
equity component was recognized when the bonds were originally issued. What
is the increase in the share capital and share premium, respectively, as a result
of the bond conversion?
a. 300,000 and 312,000
b. 306,000 and 306,000
c. 450,000 and 162,000
d. 600,000 and 12,000

79. On December 31, 2013, Cey Company had outstanding 10%, P1,000,000 face
amount convertible bonds payable maturing on December 31, 2016. Interest is
payable on June 30 and December 31. Each P1,000 bond is convertible into 50
shares of P10 par value. On December 31, 2013, the unamortized premium on
bonds payable was P60,000. On December 31, 2013, 400 bonds were converted
when Cey’s share had a market price of P24. The entity incurred P4,000 in
connection with the conversion. No equity component was recognized when the
bonds were originally issued. What is the share premium from the issuance of
shares as a result of the bond conversion on December 31, 2013?
 a. 176,000 b. 220,000 c. 276,000 d. 280,000

80. Young Company issued 5,000 convertible bonds at the beginning of the current
year. The bonds had a four-year term with a stated rate of interest of 6%, and
were issued at par with a face value of P1,000 per bond. Interest is payable
annually on December 31. Each bond is convertible into 50 ordinary shares with
a par value of P10. The market rate of interest on similar nonconvertible bond is
9%. At the issuance date, the amount of P485,000 was credited to share
premium from conversion privilege. The bonds were not converted and
instead, the entity paid off the convertible bondholders as maturity. What
amount should be recorded as gain or loss on the full payment of the convertible
bonds at maturity?
a. 2,500,000 gain b. 485,000 loss c. 485,000 gain d. 0

81. On January 1, 2013, Arlene Company issued convertible bonds with a face value
of P5,000,000 for P6,000,000. The bonds are convertible into 50,000 shares with
P100 par value. The bonds have a 5-year life with 10% stated interest rate
payable annually every December 31. The fair value of the convertible bonds
without conversion option is computed at P5,399,300 on January 1, 2013. On
December 31, 2015, the convertible bonds were not converted but fully paid for
P5,550,000. On such date, the fair value of the bonds without conversion
privilege is P5,400,000 and the carrying amount is P5,178,000. What is the loss
on the extinguishment of the convertible bonds on December 31, 2015?
a. 221,700 b. 371,700 c. 150,000 d. 0

BONDS PAYABLE

82. Glen Company had the following long-term debt:

Sinking fund bonds, maturing in instalments 2,200,000

Industrial revenue bonds 1,800,000
Subordinated bonds, maturing on a single date 3,000,000

What is the total amount of the serial bonds?

a. 3,000,000 b. 4,000,000 c. 4,800,000 d. 7,000,000
83. Blue Company reported the following long-term debt on December 31, 2013:

9% registered debentures, callable in 2014, due in 2015 3,500,000

11% callable trust bonds, convertible into ordinary shares
beginning 2014, due in 2015 3,000,000
10% subordinated debentures (P500,000 maturing
annually beginning in 2014) 1,500,000

What is the total amount of term bonds?

a. 3,000,000 b. 3,500,000 c. 5,000,000 d. 6,500,000
84. On April 1, 2013, Greg Company issued at 99 plus accrued interest, 2,000 of 8%
1,000 face value bonds. The bonds are dated January 1, 2013, mature on
January 1, 2023, and pay interest on January 1 and July 1. The entity paid bond
issue cost of P70,000. From the bond issuance, what is the net cash received?
a. 2,020,000 b. 1,980,000 c. 1,950,000 d. 1,910,000

85. On March 1, 2013, Cain Company issued at 103 plus accrued interest 4,000 of
9%, P1,000 face value bonds. The bonds are dated January 1, 2013 and mature
on January 1, 2023. Interest is payable semiannually on January 1 and July 1.
The entity paid bond issue cost of P200,000. What is the net cash received from
the bond issuance?
a. 4,320,000 b. 4,180,000 c. 4,120,000 d. 3,980,000

86. During the current year, Eddy Company incurred the following costs in
connection with the issuance of the bonds:

Promotion cost 200,000

Printing and engraving 150,000
Legal fees 800,000
Fees paid to independent accountants for registration 100,000
Commissions paid to underwriter 1,500,000

What amount should be reported as bond issue costs to be amortized over the
term of the bonds?
a. 2,550,000 b. 2,750,000 c. 1,500,000 d. 1,050,000

87. On November 1, 2013, Mason Company issued P8,000,000 of 10-year, 8% term

bonds dated October 1., 2013. The bonds were sold to yield 10% with total
proceeds of P7,000,000 plus accrued interest. Interest is paid every April 1 and
 October 1. What amount should be reported for accrued interest payable on
December 31, 2013?
a. 175,000 b. 160,000 c. 116,667 d. 106,667

88. On January 1, 2013, Beau Company issued P3,000,000 maturity value, 12%
bonds for P3,000,000 cash. The bonds are dated December 31, 2012 and
mature on December 31, 2022. Interest is payable semiannually on June 30 and
December 31. What amount of accrued interest payable should be reported on
September 30, 2013?
a. 270,000 b. 240,000 c. 180,000 d. 90,000

89. On June 30, 2013, Huff Company issued at 99, 5,000 of 8%, P1,000 face value
bonds. The bonds were issued through an underwriter to whom the entity paid
bond issue cost of P425,000. On June 30,2013, what amount should be reported
as bond liability?
a. 4,525,000 b. 4,950,000 c. 4,000,000 d. 4,575,000

90. On July 1, 2013, Carr Company issued at 104, 5,000 of 10% P1,000 face value
bonds. The bonds were issued through an underwriter to whom the entity paid
bond issue cost of P125,000. On July 1, 2013, what amount should be reported
as bond liability?
a. 4,875,000 b. 5,075,000 c. 5,200,000 d. 5,325,000

91. On January 1, 2013, Borg Company issued 4,000 of 8% P2,000 face value
bonds at 97 plus accrued interest. The bonds are dated October 1, 2012 and
mature on October 1, 2022. Interest is payable semiannually on April 1 and
October 1. Accrued interest for the period October 1, 2012 to January 1, 2013
amounted to P160,000. On January 1, 2013, what is the carrying amount of the
bonds payable?
a. 7,840,000 b. 7,766,000 c. 7,606,000 d. 7,760,000

92. Aye Company is authorized to issue P5,000,000 of 6%, 10-year bonds dated July
1, 2013 with interest payments on June 30 and December 31. When the bonds
are issued on November 1, 2013, the entity received cash of P5,150,000
including accrued interest. What is the discount or premium from the issuance of
the bond payable?
 a. 150,000 bond premium c. 150,000 bond discount
b. 50,000 bond premium d. No bond premium and discount

93. On July 1, 2013, Tara Company issued 4,000 of 8%, 1,000 face value bonds
payable for P3,504,000. The bonds were issued to yield 10%. The bonds are
dated July 1, 2013 and mature on July 1, 2023. Interest is payable semiannually
on January 1 and July 1. Using the effective interest method, what amount of
the bond discount should be amortized for six months ended December 31,
2013?
a. 30,400 b. 24,800 c. 19,840 d. 15,200

94. On January 1, 2013, Marsh Company issued 10% bonds payable in the face
amount of P6,000,000. The bonds mature on January 1, 2023. The bonds were
issued for P5,316,000 to yield 12%, resulting in the bond discount of P684,000.
The entity used the effective interest method of amortizing bond discount.
Interest is payable January 1 and July 1. For the six months ended June
30,2012, what amount should be reported as bond interest expense?
a. 300,000 b. 318,960 c. 334,200 d. 341,040

95. On January 1, 2013, West Company issued 9% bonds in the face amount of
P5,000,000, which mature on January 1, 2023. The bonds were issued for
P4,695,000 to yield 10%. Interest is payable annually on December 31. The
entity used the interest method of amortizing bond discount. On December
31,2013, what is the carrying amount of the bonds payable?
a. 4,695,000 b. 4.714,500 c. 4,704,750 d. 5,000,000

96. On December 31,2013, Marie Company reported bonds payable of P7,360,000

and accrued interest payable of P200,000. The bonds are retired on January 1,
2014 for P8,160,000 excluding accrued interest. What amount should be
reported as gain or loss on extinguishment of bonds payable?
a. 800,000 gain c. 600,000 gain
b. 800,000 loss d. 600,000 loss

97. White Company issued P2,000,000 face value of 10-year bonds on January 1.
The bonds pay interest on January 1 and July 1 and had a stated rate of 10%. If
the market rate of interest is 8%, what is the issue price of the bonds?
a. 2,262,000 b. 2,113,000 c. 2,159,000 d. 2,279,000
 (For questions 98-101) On January 1, 2013, Ezekiel Company received
P1,077,200 for P1,000 face amount 12% bonds. The bonds were sold to yield
10%. Interest is payable semiannually every January 1 and July 1. The entity
has elected the fair value option for valuing financial liabilities. On
December 31, 2013, the fair value of the bonds is determined to be P1,064,600.

98. What is the carrying amount of the bonds payable on January 1, 2013?
a. 1,000,000 b. 1,077,200 c. 500,000 d. 538,600

99. What is the interest expense for 2013?

a. 120,000 b. 100,000 c. 107,720 d. 129,264

100. What is the gain or loss from change in the fair value of the bonds for
2013?
a. 64,600 gain b. 64,600 loss c. 12,600 gain d. 12,600 loss

101. What is the carrying amount of the bonds payable on December 31,
2013?
a. 1,064,600 b. 1,077,200 c. 1,000,000 d. 1,064,920

NOTE PAYABLE

102. On December1, 2013, Pine Company issued a note payable to National

Bank in the amount of P1,800,000, bearing an interest at 12%, and payable in
three equal annual principal payments of P600,000. On this date, the bank’s
prime rate was 11%. The first interest and principal payment was made on
September 1, 2014. On December 31, 2014, what amount should be reported as
accrued interest payable?
a. 44, 000 b.48, 000 c.66, 000 d.72, 000

103. Mann Company reported on June 30, 2013 a 10% note payable in the
amount of P3,600,000. The note is dated October 1, 2012 and is payable in three
equal annual payments of P1,200,000 plus interest. The first interest and
principal payment was made on October 1, 2013. On June 30, 2014, what
amount should be reported as accrued interest payable?
a. 270,000 b. 180,000 c. 90,000 d. 60,000
104. On December 31, 2013, Roth Company issued a P1,000,000 face value
note payable to Wake Company in exchange for services rendered to Roth. The
note, made at usual trade terms, is due in nine months and bears interest,
payable at maturity, at the annual rate of 3%. The market interest rate is 8%. The
compound interest factor of 1 due in 9 months at 8% is .944. at what amount
should the note payable be reported on December 31, 2013?
a. 1,030,000b. 1,000,000 c. 965,20 0 d. 944,000

105. Loob Company had the following loans at 12% interest payable at
maturity. Loob repaid each loan on schedule maturity date.

Date Amount Maturity date Term

11/1/2012 500,000 10/31/2013 1 year
2/1/2013 1,500,000 7/31/2013 6 months
5/1/2013 800,000 1/31/2014 9 months

The entity recorded interest expense when the loan is repaid. As a result, interest
expense of P150,000 was recorded in 2013. If no correction is made, by what
amount would 2013 interest expense be understated?

a. 54,000 b. 62,000 c. 64,000 d. 72,000

106. Joshua Company bought a new machine on January 1, 2013 and agreed
to pay in equal annual instalment of P600,000 at the end of each of the next five
years. The prevailing interest rate is 12%. The present value of an ordinary
annuity of 1 at 12% for five periods is 3.60. The present value of 1 at 12%for five
periods is 0.567. What is the interest expense on the note payable for 2013?
a. 259,200 b. 187,200 c. 360,000 d. 457,200

107. On December 31, 2013, Boston Company purchased a machine from

Helix Company in exchange for a noninterest bearing note requiring eight
payments of P200,000. The first payment was made on December 31, 2013 and
the others are due annually on December 31. At date of issuance, the prevailing
rate of interest for this type of note was 11%. The PV of an ordinary annuity of 1
 at 11% for 8 periods is 5.146, and the PV of an annuity of 1 in advance at 11% for
8 periods is 5.712. On December 31, 2013, what is the carrying amount of the
note payable?
a. 1,142,400b. 1,029,200 c.1,046,000 942,400

108. On January 1, 2013, Pares Company borrowed P3,600,000 from a major

customer evidenced by a noninterest bearing note due in 3 years. The entity
agreed to supply the customer’s inventory needs for the loan period at lower than
market price. At the 12% imputed interest rate for this type of loan, the present
value of the note is P2,550,000 on January 1, 2013. What amount of interest
expense should be reported in 2013?
a. 432,000 b. 350,000 c. 306,000 d. 0

109. On January 1, 2013, Wisconsin Company loaned P1,780,000 cash to

Stone Company. The promissory note made by Stone for P2,000,000 did not
bear explicit interest and was due on December 31,2014. No other rights or
privileges were exchanged. The prevailing interest rate for a loan of this type was
6%. The present value of 1 for 2 periods at 6% is .89. What amount should be
recognized as interest expense for 2013?
a. 106,800 b. 110,000 c. 120,000 d. 0

110. On March 1, 2013, Fine Company borrowed P1,000,000 and signed a 2-

year note bearing interest at 12% per annum compounded annually. Interest is
payable in full at maturity on February 28, 2015. What amount should be
reported as accrued interest payable on December 31, 2014?
a. 100,000 b. 120,000 c. 232,000 d. 240,000

111. On July 1, 2013, Cody Company obtained a P2,000,000, 180-day bank

loan at an annual rate of 12%. The loan agreement requires Cody to maintain a
P400,000 compensating balance in its checking account. Cody would otherwise
maintain a balance of only P200,000 in this account. The checking account earns
 interest at an annual rate of 6%. What is the effective interest rate on the
borrowing?
a. 12.00% b. 12.67% c. 13.33% d. 13.50%

112. On January 1, 2013, Monk Company purchased equipment. There was no

established market price for the equipment which has a 8-year life and no
residual value. The entity gave a P5,250,000 noninterest bearing note in 3 equal
annual installments of P1,750,000 with the first payment due December 31,
2013. The prevailing rate for a note of this type is 8%. The present value of the
note at 8% was P4,509,950. What amount should be reported for interest
expense in 2013?
a. 360, 796 b. 420,000 c. 220,796 d. 0