PROBLEM 2:

MULTIPLE CHOICE- THEORY

REPORTER : KYNN PATRESSI CATIPAY
1. D. An inherently higher level of uncertainty in the timing of its settlement
or the amount thereof.

2.D. a, b and c are all present

3.B. disclosed only

4.B. No, because although a liability does exist, the outflow is improbable
and there is no reliable estimate for it.

5.D. any of these, whichever is most appropriate

6.C. The entity continues to measure its provisions under the existing laws and shall not
anticipate a new law until it becomes virtually certain that a new law will be enacted.

7.D. Environmental damages that an entity has already caused.Although existing laws do
not impose any penalty, the entity has a past practice of voluntarily rectifying
environmental damages it has caused.

8.A. An entity changes its business processes resulting in the elimination of an entire
department due to redundancy of work. All the rank and file employees in that department
will be laid off.

9.C. the entity has not incurred a constructive obligation

10.A. in the period products are sold

 PROBLEM 3:
MULTIPLE CHOICE- COMPUTATIONAL
REPORTER :LESLIE ANN ESTOLONIO
1. A. A contingent gain that is probable is disclosed only.

2.A. P200,000 - the reasonable estimate as at year-end. The actual settlement of P275,000 is
disregarded because the settlement occured after the financial statements have been issued.

3.D.

4.C. ( 100,000,000 x 80% )

5. D.
6. B.

7.D. ( 60 x 48,000) = 2, 880,000

8. D.

9. A.
10. C.