PRE-FINALS EXAMINATION

November 25, 2022

A, Interim Reporting

On January 16, Tree Co. paid P60,000 in property taxes on its factory for the current calendar year. On April 2, Tree
paid P240,000 for unanticipated major repairs to its factory equipment. The repairs will benefit operations for the
remainder of the calendar year.

What amount of these expenses should Tree include in its third quarter Interim financial statements for the three
months ended September 30?

B. Development Stage enterprise

Tanker ON Co., a development-stage enterprise, incurred the following costs during its first year of operations

Legal fees for incorporation and other related matters 55.000

Underwriters’ fees for an initial stock offering 40,000

Exploration costs and purchases of mineral rights 60,000

Tanker had no revenue during its first year of operation

What amount may Tanker capitalize as organizational costs?

C. Reporting Segment

Grum Corp. a publicly-owned corporation, is subject to the requirements for segment reporting. In its income statement
for the year ended December 31, Grum reported revenues of P50,000,000, operating expenses of P47,000,000, and net
income of P3,000,000. Operating expenses include payroll costs of P15,000,000. Grum's combined identifiable assets of
all industry segments at December 31, were P40,000,000.

Grum Co.'s four business segments have revenues and identifiable assets expressed as percentages of Grum's total
revenues and total assets as follows:

Revenue
s Assets
Ebon 64% 66%
Fair 14% 18%
Gel 14% 4%
Hak 8% 12%

100% 100%

Which of these business segments are deemed to be reportable segments?

GENERAL INSTRUCTION:
Prepare the solution to these problems using the proforma provided you. Do not put an answer to each of the
question out of the blues. It should be supported by the computation and supporting standards as required.