QUIZ 1
QUIZ 2 2. How much is the cash received upon
(1 and 2)
On December 31, 2013, Santiago Inc.'s
ordinary shares were selling for P55 per share.
On this date, the company creates a
compensatory share option plan for its 70
employees. The plan document states that
each employee may purchase 500 shares of its
P20 par ordinary shares for P35 per share after
one year if revenues reach P15M, after 2 years
if revenues reach P18M, or after three years if
revenues reach P20M. On this date, based on a
reliable option pricing model, Santiago Inc.
estimates that each option which can be
exercised up to 2018 under the condition that
the employee is still within the employ of the
company, has a fair value of P18.
The company has experience a stable 25%
increase in revenues for the past 5 years and
reasonably expects the same trend for the
upcoming years.
The following information are available from
the company's records: (see pic)
Forty-five employees exercised their vested
options on June 15, 2017 while three
employees resigned on the same year without
exercising their options, thus were forfeited.
1. How many options are still remaining
as of 12/31/2017?
- 7500
6/15/2017?
- 787500
(3, 4, and 5)
In the course of your audit of the Tenryouu
Commission for the year ended Dec. 31. 2021,
you took note of the following information:
1. Accounts Payable (trade), P170,000 –
includes P30,000 accounts with credit balances
2. Notes payable (trade), P70,000 - five-
months term bearing interest at 15%. P50,000
is dated Sept. 1, while the rest are dated Nov.
3
3. Advance receipts from customers,
P100,000 – items were delivered on 2022
4. Notes payable (long term), P200,000 –
five-year note and is being paid off at the rate
of P4,000 per month (monthly payment include
interest)
5. Dividends in arrears on cumulative preferred
stock, P20,000 – company is yet to declare
dividends since last declared and distributed
dividends in 2022.
6. Stock dividends payable on common stocks,
P37,200
7. Liabilities under guarantee agreement,
P45,000 – Company’s guarantee against
employee bank loans (default risk is unlikely)
8. Convertible bonds, P1,000,000 – 1,000
bonds is convertible to 10 ordinary shares.
Amount due on Dec. 31, 2024
9. Notes payable (Officers), P40,000 – due in
7 months
10. Salaries and wages – payroll for the period
12/16/21 - 01/15/22 amounted to P68,000
11. Notes receivable, P30,000 – discounted in
a bank without recourse bases where the
company received cash of P24,000
How much is the current liabilities?
Correct answers: 901,300, 901300
How much is the non-current liabilities?
Correct answers: 1210000, 1210000
How much is the TOTAL liabilities?
Correct answers: 2,111,300, 2111300

12. Output VAT, P246,000 – Input vat

amounted for VAT-exempt transactions 6. The company issued P800,000 of
amounted to P164,000 12% face value bonds for P851,706. The
bonds were dated and issued
13. Accounts receivable, P215,000 – net of on April 1, 2021, are due March 31, 2025, and
customer credit balance of P12,300 pay interest semiannually on September 30
and March 31.
14. Cash in banks, P115,000 – the breakdown The company sold the bonds to yield 10%.
of which is as follows: BPI P125,000; PNB
P55,000 and BDO account Rounded off to the nearest peso, how
much is the actual cash outflow for the
15. Common stock warrants outstanding, interest payment on 09/30/21? (Use
P250,000 EWT rate for the sale of services)

16. Common stock options outstanding,

P150,000
Correct answers: 41,733,41733
17. Estimated warranty costs on goods sold,
P46,000 – Pertains to warranty costs sold in
2020 and 2021 7. Yoon Se-ri, president of CLOY
Company, has a bonus arrangement with the
18. Installment notes payable, P75,000 – 2/3 company under which she receives 10% of the
is due after 2022 net income (after deducting taxes and
bonuses) each year. For the current year, the
19. Provision for losses for employees injury net income before deducting either provision
for equipment malfunction – lawyers estimate for income taxes or the bonus is P5,960,000.
that it’s probable to settle between P25,000 – The bonus is deductible for tax purposes, and
P75,000 the tax rate is 30%.

20. Deferred tax liabilities, P150,000 –

deferred tax assets amounted to P175,000 Correct answers: 389,907,389907
 8. The company issued P800,000 of
12% face value bonds for P851,706. The
bonds were dated and issued
on April 1, 2021, are due March 31, 2025, and
pay interest semiannually on September 30
and March 31.
The company sold the bonds to yield 10%.
How much is carrying value of the bonds
payable as of December 31, 2024?
Correct answers: 843,448,843448
9. You rendered purchases cutoff on the
company's purchases transactions from
December 15 to January15. The results of such
cut-off are summarized below: (Please see
pic)
The inventory count procedures were done in
December 31, 2014 and documents cut-off
shows that the last receiving report used and
recorded for the current year by the company
is RR number 2635. Receiving report number
2634 is for a shipment made on December
27,2014. The related invoice amounting to
P12,500, was misplaced and was recovered
only on January 5, 2015 and was recorded the
previous year since closing of books is usually
done every 10th of the month.
Correct answers: 260000,260,000
10. Marites Company has been paying
regular quarterly dividends of P1.50 and wants
to pay the same amount in the third quarter of
2021.
The following information relates to the
company’s equity:
Jan. 1: Shares outstanding, 400,000; P2 par
(760,000 shares authorized
Feb. 15:Issued 25,500 new shares at 10.50
Mar. 31 Paid quarterly dividends of 1.50 per
share
May 12 Converted P1,000,000 of 1,000 bonds
to ordinary shares at the rate of 50 shares per
P1,000 bond.
June 15 Issued an 12% stock dividend
June 30 Paid quarterly dividends of P1.50 per
share.
What is the total amount cash will be
received by the shareholders considering
resident individuals receiving such from a
domestic corporation is subject to final
tax?
Correct answers: 718,956,718956