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    © All Rights Reserved
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    985 views192 pages

    IA 3 Robles

    Uploaded by

    ILOVE MATURED FANS

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 192
    TRUE INT Te MEDI AT E JESoStTiNG PATRICINNIGENIPI EO Title / i About the Copyright Authors / it 7 it Preface / iv Acknowledgments / vi = Table of Contents / vit Chapter TABLE OF CONTENTS Topic Provisions, Contingencies and Other Liabilities Intended Learning Outcomes; _Introduction; Recognition of Liabilities; Provisions Distinguished from Contingent Liabilities; Measurement of Liabilities; Measurement of Provisions; Accrued Liabilities; Liability for Bonuses; Taxes and Employee-Related Liabilities; Product and Service Warranties; Dicount Vouchers, Coupons, and Other Customer Loyalty Awards; Premiums as a Component of the Transaction Price; Premiums Reported as Selling Expense; Customer Loyalty Awards; Unearned Revenues; Dividends Payable; Deposits and Advances; Presentation on the Face of the Financial Statements; Contingent Assets; Disclosure. Requirements; Sample Financial Statement Presentation; Key Terms; Chapter Summary; Discussion Questions; Problems; Multiple Choice Questions. Shareholders’ Equity Intended Learning Outcomes; Introduction; Nature of Corporation; Presentation on the Statement of Financial Position; Contributed Capital; Legal Capital; Par Value and No-Par Value Share Capital; Ordinary and Preference Shares; Nature of Equity Instruments; Authorized, Issued and Outstanding Shares; Issuance of Share Capital; Shares Issued with Other Securities; Share Issue Costs and Stock vii Page 61 Assessments; Reacquisition of Share Capital; Share Split or Stock Split; Share Rights, Warrants, and Options; Share Appreciation Rights; Share-Based Transactions with Cash Alternatives; Retained Earnings; Current- Profit or Loss; Dividends; Fractional Share Warrants; Allocation of Cash Dividends Between Preference and Ordinary Shares; Appropriation of Retained Earnings; Correction of Prior Period Errors; Cumulative Effect of Change in Accouriting Policy; Quasi-reorganization; Cumulative Other Comprehensive Income; Statement of Changes in Equity; Book Value Per Share; Disclosure Requirements; Sample Disclosures in the Financial Statements; Key Terms; Chapter Summary; Discussion Questions; Problems; Multiple Choice Questions. Leases Intended Learning Outcomes; Introduction; Nature of Lease; Lease Term; Books of Lessee; Initial Recognition; Subsequent Measurement of Lease Liability; Subsequent Measurement of the Right-of- Use Asset; Illustrative Examples — Books of Lessee; Recognition and Measurement Exemptions in the Books of the Lessee; Presentation in the Financial Statements; Sale and Leaseback ‘Transactions — Books of Lessee; Disclosures in the Financial Statements of the Lessee; Books of Lessor; Operating Leases: Finance Leases; Direct Financing Lease; Dealer's or Manufacturer’s Lease; Illustrative Examples - Direct Financing Lease; -Illustrative Examples — Dealer's or Manufacturer's Lease; Sale and Leaseback Transactions; __ Disclosure Requirements for Lessors; Leases Under IAS 17; Key Terms; Chapter Summary; Discussion Questions; Problems; Multiple Choice Questions. Income Taxes Intended Learning Outcomes; Introduction; Nature of Income Tax; Current Tax Liabilities and Current Tax Assets; Accounting Income and Taxable Income; Deferred Tax Liabilities and Deferred Tax Assets; Temporary Differences; Tax Rate Considerations; Reversal of Temporary Differences; Computation of 179 269 CHAPTER 1 PROVISIONS, CONTINGENCIES AND OTHER LIABILITIES Learning Outcomes After reading this chapter, jou should beable to 1. recall te definition of abies; 2. distinguish provisions from contingent Rabies by applying the recognition eitera for babies; 5. account for different non-financial Rabilties, such as Rability for Gonuses, taxes, warranties,” premium claims, discount vouchers, gift cenificates, deposits and dividends 4, deseribe the nature of contingent assets and identify disclosure requirements relating to contingent Gabilivies and. contingent assets 5 identify disclosure requirements relating to provisions, contingent Gabiities, and fabiltes relating to contracts with customers Introduction As discussed in Chapter 5 of Volume 1 of the Intermediate ‘Accounting Series and based on the New Conceptual Framework of the International Accounting Standards Board (IASB),'a liability is a present obligation on.an entity. to transfer an economic resource as a result of past event. Chapter 5 of Volume 1 also discusses the recognition, measurement and presentation of financial liabilities in the financial statements. ‘This chapter discusses provisions, contingencies and some non- financial liabilities. Liabilities relating to leases, income taxes, employee benefits and share options aré discussed in separate chapters of this book. RECOGNITION In accordance with the recognition criteria in the Conceptual Framework, an item of a liability is recognized in the financial statements if jong =F OND separ 0 Pus SP EPETTNAD HH meee S _sxjaor i550 PUR HoUNDUNITOD FUOIROLE =F HID a8u ge 328 5 2 2 Hes 5 * stam aoa w wos oemoad » 20MHREAEC pLamefumus wor payertnsyy soorHOid a MoH snoxisand worssn9sia seRRTRTETT Br uD #5) SUBDUITIOS UOPRONT = T301TOND __—_—_—silll casaanova | eno'ons'za 000'000't Nee ‘G20E ‘e10e a ot fara u0ouy oa, -vonsnpep ps 278 OOF OPE EL ; fad oun Ore t,o don paw ere. iog 20 ooo" rae ue sours hd sp pus a URDU NED TOTS = TID umes sovorngise 6) paz nrornesoy fo saioa formes (a) umuaid jo ssogund (0) bromenaf ma pseaos oy ssa nok aeons cagannoay saps fucyuonsappoued s9en sig 8 MUTE aha avon ous of Busacued sour Youre 0 ada homed moun jo nswor%s oeoe 19 Wo pamosaic sme ours oo seuopeny = BIO soxsuroorr 490 Pu AEN gswonowsema SunWoo} 2 3 Hows ha powssye 29 ‘onusssi passyop om) PINOW mont “pohot ast ak age edo ssyoyioe yl au, “seipuetaiou Ut siqopat Seaeounioo UB Don pw YEN Ponioa! sick CMB! Y LON E pocromas arsine Sag pres freintco sae oy loss ED a snonoy€8 0202 ‘16 sage 9 305 wont posed a o 38) or Saaide moaned eos Kiwdsieg HORIHOE 6 00's oe = oud 8 esa {Jo sonmramn parse yoda pus Spout, Jo wwoummee eae "ie scum 8 St focog saquscaa 2} eo 1% 98 FET fea eo Abra a0} 29m SHAS F So - 1g wgussea 8 a Pra 6 sien Sumditog APICES STOR sou wy seymconsodand 25 asso pare siyoud ue Aprouorsadord amy nba suapiousioug =e 48300 ee rade anni hin) SFA Touro WORSBPIFUED 70} PaneN| THHEND SrmGS amg sipiowsaeys =e ssNEOIS Aneg sipoyaIDIS =e ED patttctons ney SS summa summa ESGE> oe pores au ts sm sas egnny tH ‘aroqe od eta 2914 wouasnas w2cneey Fh OYE 8 oF Hi ‘Dee'21 Compensation Expense ‘Share Premium = Share Options ‘Bee.91 Compensation Expense ‘Share Premim Share Options "900,000 ~ 100,000 = 200,360 1 the F100 milion annsal revenue had fend of the year 2021 Bait ail expec ‘Satiafed in the year 2022, the compencat > Table of the 0 determine the bet eatinnate ‘vesting period at each rspoting date sfetuat | Actua average veer | ee _ 2 - Shareholders’ Equity . 184000 me ff 184,000 ‘Total value ofthe options, January 1,2019 3.000 x P25" Less: compensation expense recognised in 2019 as aresult ofthe optoe ee ‘Compensation expense recognised Sat At the date of exercise on Decent {be pad an amount equal tthe mini: Intrinsic valu at date of execine ese: previous fireatue P8072) p745,509 Compensation expense fr 2023, 23.000 Increase in sare price (98 - ps. ‘Number of shares based on sce.’ “otal eprecation Multiple by te umber of ears “mit fl veing pened [the officer, on the other hand. opted for the equity the settlement ie recorded a8 5 men, Wantactions atti raked aay re Seen Oe mo Se ao Dee 1 Retained Ea (Cash Di ming for kent) tdends Payade both the abikty for property for distribution are classed as) tien. ‘The capt structure of ABC Corporation at December 3%, a tous Ordinary Share Capa, P10 par, 10,000 ; ‘shares esued and sustecg Pag ‘Shave Prema = Preference share is cumulative ‘There are no unpaid 4. Preference share fe no0-cu total of 1% sotto: [Annual vend begun of 2019, unpaid dindond oyereceating. 30,000. idend on the prefers shan ‘Appropriations of retained earnings may be accounted stnerof telling: “chapter 2- Shareholders Rawity egrvon fo years 2019 and 2020, but led to recrd depretin ten hough has 8 POUCy of te eer of oP come tax rte is SOX ABC dis Be nea paring fx 2020 france sotements. re entry in 2020 to correct such error 8 lows reas TgIe ier cay Preferred stock. See preference share Prior period errors. “Ontcsions ioe ang fenti’s financial statement for on ot Property dividend. A dividend paid in te om, cash, * as fan ast, other: | Quashrvongantettion. A procedure by whieh « dete n retaind earings by eer ro or restatement of invested capital ten How i a eq seted share bse pa, ‘non-employee measured? Puma transaction of ‘reverted them to an unissued bea te, the marke value ofthe oe PIO each, inary Pre for 2021 was P2000. ‘Prepare joumal entries in the books of Fie Red pertaining tothe options for years 2020 ~ 2028, Compute the compensation expense on paneer he yar 96 see Telia fom, = Proar the nies rie an an = or 2023 an 2024, ae DO: siiisse ee, ee ear ‘il the 200 tranny sharca were sold for 720,000 ‘the resale ofthe treasury shares be recontees 2 cash i ‘Treasury Shares ec, eaters resi, Treasury Shares Use the same information given in MC31. How m MOOR TF Span nary nae cial were tran what etry shoud Pat mike record this ‘a, Retained Earnings 6,000,000) ‘Shure bier Distbutabe shore Peta > Share Dende Padi css Use fine remaining teanyabares? . Pp 5 P200,c00 © Pa60,000 & — paoo.000 1Mca9 On March 30,2020, Srinary shares. tas per share Shaves tre out Gon ius Mc40 Quebec Corporation, @ calendar sear compacy, had ‘amount of retained earnings in 2020 as a baste for. ec oem 2, oom, SSL et 2c, all a Fee ee + The lease agreement is norcanceable fora term of 5 ‘Peuing etal patents of #25 000 ae begining of ag year : 5 Runt eel ti : ia Bd moos soa syne a us ne ‘wim ai Busmauog P frgonas sou saat sopuae » fo seafon ! i 1 inthe above example, the sling price is P,500 004 ‘conde the far value of 6,000,000, the sale leasee ‘folowing aduatnents inthe above compatatons: ‘Te lessor maintains the record forthe leased asset, and depreciation on a basis consistent with its normal depreciation forme asses ‘Te caring eae of ated ate then reoguted ais vig ton of expenae eo cote aes cai ‘The pou iventent sn nce he ideal aie seal ake'n ungneaneeeoweer he preset | Shuretet residual wae reduces the cost of Sales sored “The remaining cases itstrated in this textbook are ‘using the gross method of accounting for nance lane receivable ease term is unguarantee by the estew, i he preceding ease, the etd vlue 6 F60,000 Whether the residual vaue i guaranteed or unguaranteed, all ‘ther transactions (collections of ansual rental, Fecogntion of ent revenue) would be the same, | At uhat amount should Generous, Ine. record the rghtefe equoment on touary 75050? | Aone eeu oho te las Kai be recep et Semen 1 aaa fer mang the es ale sadist Prepare an amortization table forthe foe year term ofthe baton ‘Prepare joumal enres tthe books of Coners, Ine for ere 900 an 2021 19 record tansaciona reg Prepare the journal entry at the end ofthe lense term fo ‘record the transfor of the lease etomobies tthe fessor ‘gnouried a P150,000 atthe end ofthe lease tm, Bropare te eral wy oreo the rans of the ese Sarees 20% in cach ofthe nex two year, ad 15% in each of the ak ‘oye The lease begins on Janay 1 2000- (0) Prepare journal envies relating othe lease in the. ‘ope ManuJactring Company for years 2020 andl 2028, mes > Soe e (he shorter of the lease term and the useful fe of ate : 4. the longer of the lease term and the useful feof the Iewed acct, nial dicect costs meurred by the lessor in connection with — ‘Specie lasing actives as in negotiating and Securing leasing _trangementn in rect fnance ee, a ee ‘through 5 P12 to enter the lease, Peter aca sinc omy at 14% for ie prod 2.609 Dv ot an any due at 15% for five pends much f the interest expense for the ae es a aE rey BRE] ag 8 in - i tee fe F ne re My a ane tl tH i "a BEEe iE i | i alot # 3 lel i bat 3 | at 10% for 4 periods is 0.68901. ‘EScoumted at tom for 8 period eOe2002 Tor # periods discounted at MC25 Use the same information given in MC34 depreciation should Bele Bnterpriaes record on this machine for ‘Anml ent payable a the end of each year Market rate ofinterest . ss eee ate ofiterest * Peropective, when the carrying value of an se ot when the carrying value ef the hai porary dierence ia a deductible tempore ‘The lower portion ofthe profit or Iss section ofthe ‘comprehensive nome for yeer ended December 31, 2020 shal Income Tax Expense ~ Deferred 36.000 Deferred Tax Liability ‘The diference between carrying amount of the asset base om December 31,20 o Alter the foregoing entses on December posted, the deferred tax babii’ acconsae ne Pros; Mesure the required belance of deferred tax asset Aeterred tax Hablity by applying tne wee ae te the temporary difeenee, = 4 2 yy Daniel Company reports the following income in ‘turn forthe years 2020, 2021, 202% ond 203° ‘MCL What is the basic principle for accounting foF incom sander Tas 12? MCB I during the caren yea, tan secu pa le rat as e CIO A deterred tax abi ie computed using MCL Which ofthe folowing create a deferred tax assecp Thus, the libby for compensated absences thatthe ‘recognize at Decertber 31,2020 is P20,000, computed as foliose ‘eens 9 al entree 5 ‘Matte by he umber of eras Teal eile’ ruber of cays ‘Averoge reper day ‘abit fr compensated absences ‘i December 31, 2020, an accrual is taken up fot Compensated Absences 120,000 “abity for Compensted Absences 200 Ree 3 1 Habit for Compensated Absences = mpensaled Absences 0 Reversal of last year's accrual a ‘chapter 5 = Bmployes Benefits remitted t0 fin the proseding example, the company agency P560,000, te entry to recognae the expense and the pet Dent Bipeme 500000 Reale items Recon “0,000 cere he en requed conn nthe Denne ene Plans Ue te deed tt pons ogee ode coniiasos ake Accounting by a9 enty or dein benef plan tn feps (paragraph Za ermining the det or murpius; termining the amount of the net ay ase) one ‘Chapter 8 ~Bmotovee Beneft ‘The current service cost is meatured atthe end of e thence, the Curent service coat atthe eof Year 1 Js ds the defined Bene ‘i poe periods, resulting rom any ofthe following: ll be recogized an eater of the lowing dat the actual return on pan assets exceeds the © the resin near gain Ht the actual return. Is ‘expected etre, there actuarial > Expected tun on plan ae et eto plan anes ‘Atul mon plan aneets

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