ACCO 30093 - Integrated Review Course in Financial Accounting & Reporting

6/25/22, 10:56 AM ACCO 30093: Integrated Review Course in Financial Accounting & Reporting
ACCO 30093: Integrated

Review Course in Financial
Accounting & Reporting
Guidelines
1. Your gadget and internet connection will be your primary responsibility. Please make sure that
your phone/laptop is fully charged before the examination to avoid any delay. Moreover, as
much as possible, prepare a backup for internet connection (especially for students who are
dependent on WIFI plugged via electricity.)
2. Be ready in your study area at least 10 minutes before your exam. Calculator, pen, and scratch
paper should also be available for your convenience.
3. The link will be accessible starting at 8:00 AM (system time) and will be closed at exactly
11:00 AM (system time).
4. Submission after 11:00 AM (system time) will not be entertained. Thus, your score will be
ZERO.
5. You need to use your PUP email address to open the link (the link provided to you should be
the one that you use. Hence, zero score will be given for incorrect use of other's link) and you
are only allowed to submit once.
6. Please be reminded of the correct way how to input the amounts (example: P1,234,567
with capital P as the peso sign, comma sign to separate values, no space in between, and
no decimal points because final answers need to be rounded off to the nearest peso)
unless specified in the question the required format of the answer. If your answer is zero,
just put P0 (capital P and zero, no space in between). Students who will not follow the said
format will automatically receive no point for the said answer even though he/she got the
correct answer.
7. Avoid refreshing the browser/link to avoid technical issues.
8. Avoid opening other applications/tabs in your browser. They may interrupt not only your
internet connection but also the MS Forms.
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9. Maintain screenshots of your answers, while taking the exam or before submitting, that
can be used in case of an emergency. If it wasn’t documented, it didn’t happen.
10. Please screenshot the notification that will appear after you have submitted your
answer. This will be used in the case that the system will not account for the answers you have
submitted. No need to send it if you do not have any issues.
11. Be honest. Cheating in any form before or during the examination will result in a zero score.
Hi, Sarah. When you submit this form, the owner will see your name and email address.
* Required
At the end of current year an entity had cash accounts at three different banks.
One account is segregated solely for payment into a bond sinking, a second use
for a branch operation is overdrawn, third account used for regular corporate
operations, has a positive balance. How should these accounts be reported? *
(1 Point)
Regular account be reported as current assets net of overdraft.
Segregated account should be reported as a non-current asset, and the regular account should
be reported as current asset net overdraft
Segregated account should be reported as non-current asset, the regular account should be re
ported as current asset, and the overdraft should be reported as current liability
Regular accounts should be reported as current asset and the overdraft should be reported as
current liability
The December 31, 2021 trial balance Chicken Wings includes the following
accounts:
Cash on hand-P440,000; Petty cash fund-P33,275; Security Bank current

account-P825,000; PNB Current account No. 1-P532,400; PNB Current account
No. 2-(P38,500); BSP treasury bill – 60 days-P1,663,750; BPI time deposit – 30
days-P825,000
The cash on hand includes a customer postdated check of P66,550 and postal
money order of P22,000. The petty cash fund includes unreplenished petty cash
vouchers for P3,328 and an employee IOU for P2,200 dated January 31, 2021. A
check for P133,100 was drawn against Security Bank account, dated January 15,
2022, delivered to the payee and recorded December 31, 2021. The BPI time
deposit is set aside for acquisition of land to be used as a factory site.
What is the total amount of Cash and Cash Equivalents on December 31,
2021?
* (2 Points)
P3,383,847
The entry to record the dishonor of a note receivable assuming the payee
expects eventual collection includes to debit to: * (1 Point)
cash
accounts receivable
notes receivable
allowance for doubtful accounts
Chicken Wings Company is engaged in buying and selling of office equipment

which caters both cash and on account sales to customers. The following are
the transactions that affect accounts receivable during 2021:
Sales (cash and on account), P715,171; Cash received from cash customers,
P243,297; Cash received from credit customers (340,373 was received from
customers who took advantage of the discount feature of the company’s credit
term 3/10, n/30, P368,760; Accounts written of as worthless, P5,996; Credit
memoranda issued to credit customers for sales returns and allowances,
P29,250; Cash refunds given to cash customers for sales returns and allowances,
P20,536; Recoveries on accounts written off as uncollectible in prior periods (not
included in cash collections stated above), P8,004
An aging of the receivables indicates that P20,933 of the accounts receivable

balance are deemed uncollectible.
The following balances were taken from the December 31, 2020 statement of
financial position:
Accounts receivable, P114,788; Allowance for bad debts, P11,785
What are the balances of Accounts Receivable that would be shown in the
December 31, 2021 statement of financial position? * (2 Points)
P133,733
Chicken Wings Co., a consignee, paid the freight costs for goods shipped from
Fried Chicken Co., a consignor. These freight costs are to be deducted from
Chicken Wings Co’s payment to Fried Chicken when the consignment goods are
sold. Until Chicken Wings Co. sells the goods, the freight costs should be
included in Chicken Wings Co.? * (1 Point)
Freight-out costs.
Selling expenses.
Cost of goods sold.
Accounts receivable.
On December 28, year 2, Chicken Wings Co. purchased goods costing 48,250.
The terms were FOB destination. Some of the costs incurred in connection with
the sale and delivery of the goods were as follows:
Packaging for shipment 965; Shipping 1,448; Special handling charges 1,930.
These goods were received on December 31, year 2. In Chicken Wings Co’s
December 31, year 2 balance sheet, what amount of cost for these goods
should be included in inventory? * (2 Points)
48,250
50,180
50,663
52,593
The costs that are directly attributable to bring the plant machinery to the plant
location and condition for the intended use include the following, except *
(1 Point)
Installation and assembly cost.
Cost of store preparation.
Cost of employee benefit arising directly from the acquisition of property, plant and equipmen
Initial delivery and handling cost.
Chicken Wings Company purchased a copier for P447,150 on January 1, 2021.

The estimated useful life of the copier at the time of purchase is 5 years and it
has a salvage value of 40,650. On January 1, 2022, the company checked its
machineries and found out that the useful life of its copier should have been 6
years. Chicken Wings depreciate its all assets using a straight-line method. How
much is the carrying value of Chicken Wing Company’s copier on December
31, 2022? * (2 Points)
P284,550
P300,810
P243,900
P260,160
Chicken Wings Inc. purchased a new camper’s bubble pool machine on an

installment basis because based on Chicken’s financial analyst, it would be
advantageous for the company to buy it in installment rather than for
P3,256,500 in cash. Hence, Chicken Wings paid P835,000 as its down payment
and the remaining will be paid as follows:
Issuance of promissory note payable in 5 months – 334,000 per month

Issuance of 16,700 ordinary shares with P35 par value
And P50 fair value per share
Bubble pool machine installation costs Chicken Wings a total amount of

P250,500. This has been paid thru the company’s credit card. What is the
initial cost of bubble pool machine? * (2 Points)
P3,507,000
P3,340,000
P3,256,500
P3,590,500
10
Legal fees incurred by an entity in defending its patent rights should be

expensed when the outcome of the litigation if it is successful or unsuccessful,
respectively: * (1 Point)
No; Yes
Yes; Yes
Yes; No
No; No
11
Chicken Wings Corporation (CWC) has provided intangible assets as follows:
• A patent was purchased from another company for P4,680,000 on January 2,

2021. On the same date, the patent was estimated to have a useful life of 10
years. The patent had a carrying value of P3,900,000 when the company sold it
to CWC.
• On January 31, 2022, a franchise was purchased from Fried Chicken for
P1,123,200. The contract which runs for 20 years provides that 5% revenue from
the franchise must be paid to Fried Chicken. Revenue from the franchise for
2022 is P5,850,000.
• On January 1, 2022, because of recent events, CWC estimates that the

remaining useful life of the patent purchased on January 2, 2021, is only 5 years
from January 1, 2022.
What is the carrying value of the patent and franchise on December 31,
2022? * (2 Points)
P3,369,600; P1,071,720
P3,276,000; P1,067,040
P3,369,600; P1,067,040
P3,276,000; P1,071,720
12
Transfer from investment property to property, plant and equipment is

appropriate: * (1 Point)
When there is change in use
Based on the entity’s discretion
When the entity adopts the fair value model under PAS 40
Reclassification is never allowed
13
Chicken Wings Company and its subsidiaries provided the following properties
owned by the group:
Land held by Chicken Wings Company for undetermined future use, P3,760,000;
Vacant building owned by Chicken Wings Company to be leased out under an
operating lease, P5,640,000; Property held by a division of Chicken Wings
Company, engaged in real estate firm on the ordinary course of business,
P4,700,000; Property held by Chicken Wings Company for use in production,
P3,760,000; Property that is being developed for future use as investment
property, P4,700,000; Office of the building owned by a subsidiary of Chicken
Wings Company and for which the subsidiary provides security and
maintenance services to the lessees, P1,880,000; Equipment leased by Chicken
Wings Company to a subsidiary, P1,410,000; Property being constructed on
behalf of another party, P470,000; Real estate held for capital appreciation,
P6,850,000
What is the total investment property that should be reported in the

consolidated statement of financial position of the parent and its
subsidiaries? * (2 Points)
P0
14
Which of the following should be considered when classifying Investments in

Equity Securities? * (1 Point)
The market in which the securities are traded
The entity’s ability to exert significant influence or control over the acquiree
The entity’s intention in acquiring the investments
The entity’s business model
15
Statement 1: When debt investments are designated as at FVTPL, reclassification

is allowed when there is a change in business model.
Statement 2: Reclassifications of debt investments are allowed when there has

been a change in management’s intention. * (1 Point)
Statement 1 is false; Statement 2 is true
Both statements are true
Statement 1 is true; Statement 2 is false
Both statements are false
16
Chicken Wings Company has 58,500 shares of Fried Chicken Company ordinary
share as equity investments at fair value through other comprehensive income.
These shares were acquired at fair market value, which was P78 per share on
May 2, 2022. On December 20, 2022 the market value of these shares is
P88/share. On December 22, 2022, Chicken Wings sold 40,905 shares of its
investment in Fried Chicken Company for P90/share, which is the current
quoted price also in the market, and incurred commission expense of P8,000.
Market value of Fried Chicken’s stock has increased by P3 per share by year-
end. The company’s policy is to derecognize the related amount in the OCI
whenever the investment was disposed. How much was transferred to
retained earnings upon sale? * (2 Points)
P702,000
17
On January 1, 2020 Chicken Wings Company purchased P2,940,000, 8% bonds

of Fried Chicken Corporation for an amount that yields 10%. Interest is payable
every June 30 and December 31 of the year. The bonds will mature on
December 31, 2024. The business model of the entity is to collect the
contractual cash flows which represent sole payment of principal and interest.
On April 1, 2022, to pay maturing obligations, Chicken Wings Company sold
P980,000 face value bonds for total proceeds of 104. Additionally, Fried Chicken
Corporation is currently financially distressed and after paying the amount due
on December 31, 2022 was unable to meet the original terms of the contract.
Fried Chicken Corporation arrange for negotiation by lowering the interest rate
from 8% to 4% for the remaining terms.
How much is the total (net) impact in the profit or loss of the bond
transactions for the year 2022? * (2 Points)
P90,211
P27,755
P229,639
P136,724
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18
A company previously classified one of its equipment as held for sale. At the
end of the current period, the management decided not to sell the said
equipment anymore but to continue to use it. What would be the appropriate
measurement of the said equipment?
I. Carrying amount of the equipment at year-end.

II. Carrying amount of the equipment at year-end on the basis that the
equipment had never been classified as held for sale.
III. Recoverable amount of the equipment at year-end. * (1 Point)
Lower of I and III.
Higher of II and III.
Lower of II and III.
Higher of I and III
19
On December 31, 2021, Chicken Wings Company classified one of its

equipment as held for sale. The equipment had a cost of P520,000 and
accumulated depreciation of P187,200 on that date.
The fair value of the equipment was estimated at P273,000 and the cost of
disposal at P13,000
What amount should be reported as impairment loss for 2021? * (2 Points)
P46,800
Zero
P59,800
P72,800
20
On December 31, 2021, Chicken Wings Company classified one of its

equipment as held for sale. The equipment had a cost of P520,000 and
accumulated depreciation of P187,200 on that date. The fair value of the
equipment was estimated at P346,000 and the cost of disposal at P13,000.
What amount should be reported as impairment loss for 2021? * (2 Points)
P31,200
P18,200
P5,200
Zero
21
On April 30, 2022, Chicken Wings Company classified one of its equipment as
held for sale and decided to sell the said equipment within one year. On the
same date, the equipment had a cost of P187,500, accumulated depreciation of
P81,250 and an estimated selling price of P93,750. It is estimated that selling
cost associated with the disposal of the machine will be P12,500. On December
31, 2022, the estimated selling price of the equipment had increased to
P112,500 with estimated selling cost of P18,750.
What amount should be recognized as gain on reversal of impairment on

December 31, 2022? * (2 Points)
P31,250
Zero
P12,500
P18,750
22
On April 30, 2022, Chicken Wings Company classified one of its equipment as
held for sale and decided to sell the said equipment within one year. On the
same date, the equipment had a cost of P187,500, accumulated depreciation of
P81,250 and an estimated selling price of P93,750. It is estimated that selling
cost associated with the disposal of the machine will be P12,500.
On December 31, 2022, the estimated selling price of the equipment had
increased to P137,500 with estimated selling cost of P18.750.
What amount should be recognized as gain on reversal of impairment on

December 31, 2022?
a. Zero
b. P25,000
c. P37,500
d. P56,250
* (2 Points)
P37,500
P56,250
P25,000
Zero
23
Which among the foregoing statements are true?
Statement I: Consumable plants are accounted for as biological assets.

Statement II: Consumable plants are accounted for as property, plant and
equipment.
Statement III: Consumable animals are accounted for as biological assets.
Statement IV: Consumable animals are accounted for as property, plant and
equipment. * (1 Point)
I and IV
II and IV
II and III
I and III
24
Chicken Wings Inc. reported the following:
Bearer plants, P3,350,000; Consumable plants, P1,340,000; Bearer animals,

P2,010,000; Consumable animals, P1,675,000; Animals related to recreational
activities, P1,206,000; Agricultural produce growing on bearer plants,
P1,005,000; Agricultural produce harvested, P804,000; Agricultural land,
P4,020,000
Which of the following would be classified as biological assets? * (2 Points)
P6,030,000
P8,040,000
P9,380,000
P4,690,000
25
Chicken Wings Inc. reported the following:
Bearer plants, P3,350,000

Consumable plants, P1,340,000
Bearer animals, P2,010,000
Consumable animals, P1,675,000
Animals related to recreational activities, P1,206,000
Agricultural produce growing on bearer plants, P1,005,000
Agricultural produce harvested, P804,000; Agricultural land, P4,020,000
Which of the following would be accounted for as property, plant, and

equipment? * (2 Points)
P10,586,000
P8,576,000
P7,370,000
P9,380,000
26
Chicken Wings Inc. incurred the following expenditures relating to its biological
assets during the current year:
Commissions to brokers, P5,500; Transportation costs to the market, P3,850;

Levies by commodity exchange, P1,650; Transfer taxes and duties, P2,750;
Advertising costs, P1,100
What total amount shall be classified as costs to sell in accordance with

IAS 41 Agriculture?
* (2 Points)
P12,100
P14,850
P13,750
P9,900
27
Chicken Wings Inc. is engaged in raising dairy livestock. The entity provided the
following information during 2022:
Biological asset, 1/1/2022 - P225,000

Increase due to purchases – P90,000
Gain arising from change in fair value less cost of disposal attributable to price
change – P18,000
Gain arising from change in fair value less cost of disposal attributable to
physical change- P27,000
Decrease due to harvest - P38,250
Decrease due to sales – P9,000
What amount shall be reported as biological asset on December 31, 2022?

* (2 Points)
P312,750
P321,750
P270,000
P360,000
28
Chicken Wings Manufacturing Company sells washing machines that include a

two-year warranty against factory defects. Service calls under the warranty are
performed by an independent mechanic under a contract with Chicken Wings.
The product warranty provides assurance that the washing machines sold will
function as intended based on agreed-upon specifications and the company,
based on experience, estimates that warranty costs are P2,000 for each unit
sold. When should Chicken Wings Manufacturing Company recognize
these warranty costs? * (1 Point)
Evenly over the period of warranty

When the service calls are performed by the independent mechanic
When payments are made to the independent mechanic
Entirely when the machines are sold
29
Which of the following sets of conditions would give rise to the accrual of a
contingency? * (1 Point)
Amount of loss is reasonably estimable or occurrence of event is probable.
Amount of loss is reasonably estimable and event occurs infrequently.
Amount of loss is reasonably estimable and event occurs frequently.
Amount of loss is reasonably estimable and occurrence of event is probable.
30
Statement I: Changes in provisions shall be reviewed at each reporting date,

and the amount of provisions should be adjusted accordingly as a change in
accounting estimate.
Statement II: In the next accounting period, when it is no longer probable

that an outflow of resources would be required to settle the obligation, the
provision previously recognized should still remain in the accounts.
Statement III: Provisions for future operating losses can be recognized.
How would you assess the foregoing statements, respectively? * (1 Point)
False, False, False
False, True, False
True, True, True
True, False, False
31
On January 1, 2021, Ace Manufacturing Company introduced a new product

line, Smart Robotic Vacuum Cleaner (SRVC). A two-year warranty is embedded
in SRVC’s price which currently sells for P70,000 each. Having been newly
introduced in the country, the company based its estimated warranty costs from
its experience in other countries where SRVC has been successfully launched.
The estimated warranty costs related to peso sales are 2% in the year of sale
and 3% in the second year after the sale.
Sales and actual warranty expenditures for the year 2021 totaled P3,500,000
and P59,000.
How much is the warranty expense for the year ended December 31, 2021
and the estimated liability for warranty at December 31, 2021? * (2 Points)
P70,000 and P11,000
P175,000 and P59,000
P175,000 and P116,000
P70,000 and P59,000
32
Chicken Wings Manufacturing Company (CWMC) sells energy-efficient, inverter

split-type air conditioners. The air conditioners have more consistent cooling
system and use a controlled compressor that reduce energy usage. The
company provides its customers an option to purchase warranty contract for a
three-year period for P4,500 for every unit of 1.5HP air conditioner purchased
priced at P60,000. If the customer chooses not to buy the warranty contract,
the air conditioner sells for P55,500.
During 2021, CWMC sold 400 packages of the air conditioners and warranty
contracts. Cost of servicing the units during 2021 amounted to P143,100.
Sale of the package of air conditioners and warranty contracts as well as the
repairs are presumed earned and incurred evenly throughout the year. Based
on the past records of CWMC, 35% of the repairs are done in the first year from
the date of sale and 65% in the second year.
Determine the following (in the respective order): Total revenue (main
product and warranty contracts) for the year 2021; Net profit from
warranty contracts for the year 2021; and Unearned revenue from warranty
contracts at December 31, 2021. * (2 Points)
P22,515,000/ P171,900/ P1,485,000
P22,515,000/ P486,900/ P1,170,000
P24,000,000/ P630,000/ P1,170,000
P315,000/ P171,900/ P1,485,000
33
In order to accelerate sales of its products, Chicken Wings Manufacturing

Company (CWMC) launched a 6-month sales promotion campaign starting on
October 1, 2021 and will end on March 31, 2022, or when the supply of
premiums last, whichever comes first. CWMC placed a securely-protected
coupon inside every box of the product sold. Five coupons are required to be
presented by a customer to receive a premium that costs CWMC P80 each.
AMC estimated that only 60% of the coupons issued would be redeemed. For
the three months ended December 31, 2021, the following information is
available:
Number of boxes of product sold - 91,000

Number of premiums purchased – 10,500
Number of coupons redeemed - 24,150
How much is the premium expense and liability for outstanding premiums,
respectively, recognized in the financial statements of CWMC at December
31, 2021? * (2 Points)
P4,368,000 and P840,000
P873,600 and P487,200
P487,200 and P873,600
P840,000 and P4,368,000
34
Beginning the year 2021, the Chicken Wings Manufacturing Company (CWMC)
began marketing its iphone XV (pronounced as X Five). Each XV sells for
P50,000. To promote and expedite sales of this product, the management of
AMC is offering one proof of purchase seal for a special slim transparent case to
each customer for every unit of XV purchased. CWMC estimates that out of the
units sold during 2021, only 60% of the proof of purchase seals will be
redeemed. Sales of XV during 2021 totaled P50 million. For that year, 625
special slim transparent cases were purchased by the company at a total cost of
P750,000. These 625 special slim transparent cases have a total sales value of
P1,250,000. A total of 320 special slim transparent cases were distributed to
customers during the year 2021.
How much is the unearned revenue for unredeemed premiums reported in

CWMC’s December 31, 2021 statement of financial position? * (2 Points)
P546,875
35
Since 2019, Chicken Wings Manufacturing Company (CWMC) sells desktop and
laptop computers in Virra Mall, San Juan City. In addition, CWMC sells 3-year
service contracts for the preventive maintenance services (PMS) for these
computers for P1,800 each. Sales of service contracts and repairs are made
evenly throughout each year. The company estimates that 15% of repairs are
done in the first year from the date of sale, 30% in the second year and 55% in
the third year. Service contracts sold for years 2019 to 2021 are as follows:
Number of contracts- 2019: 480; 2020: 984; 2021: 780

How much is the unearned revenue from service contracts at December
31, 2021? * (2 Points)
Enter your answer
36
After a wedding celebration towards the end of 2021, fifty people were
hospitalized, possibly as a result of food poisoning during the wedding
reception from the catering services by Chicken Wings Manufacturing Company
(CWMC). Legal proceedings have started seeking damages of P1,200,000 from
the caterer but CWMC disputes the liability. Up to the December 31, 2021,
CWMC’s lawyer advised that it is probable that CWMC will not be found
liable. However, on March 21, 2022, prior to the date of authorization of the
financial statements for the year ended December 31, 2021, its lawyer advised
that, owing to developments in the case, it is probable that the enterprise will
be found liable ranging from P700,000 to P1,200,000. The lawyer believes that
the most reasonable estimate is P1,000,000.
What is the proper disposition for the foregoing facts for the year 2021? *
(2 Points)
No provision is recognized in 2021, though the matter may be disclosed as a contingent

liability.
No provision is recognized in 2021 and no disclosure is required.
A provision is recognized in 2021 for P950,000 and an additional disclosure for the range from
P700,000 to P1,200,000 is required to be disclosed in the notes to the financial statements.
A provision is recognized in 2021 for P1,000,000 and an additional possible obligation of

P200,000 is required to be disclosed in the notes to the financial statements.
37
. Chicken Wings Manufacturing Company (CWMC) distributes annual bonuses

to its Management Services Manager and its Management Associate. The
company reported a P2,800,000 profit for 2021 before bonuses and income
taxes. Income taxes of CWMC average 30%. How much is the total amount of
bonus if bonus for the manager and the associate is computed at 15% and
8%, respectively based on profit after taxes and bonuses? Round off final
answer to the nearest peso. * (2 Points)
P414,548
38
Chicken Wings Manufacturing Company (CWMC), whose fiscal year ends of

June 30, has the following data for the current fiscal year ending June 30, 2021
pertaining to employees’ salaries, billings for electricity and WIFI connection.
• Salaries of their 18 contractual employees are paid on a weekly basis every

Friday. Average weekly salaries for a 5-day work week for these contractual
employees is P5,900 each employee based on the minimum wage set by the
government. June 30, 2021 falls on a Wednesday.
• Meralco bill for P19,250 covering the period June 16 to July 15, 2021 was
received on July 22, 2021.
• Globe at Home bill for P7,500 was received through email on July 11, 2021
that covers the whole month of June 2021.
Based on the given data, how much total accrued expenses should be
reported by CWMC at June 30, 2021? * (2 Points)
P80,845
39
Statement I. liabilities are obligations arising from past transactions and payable
in assets or services.
Statement II. Effective rate or market rate is the interest rate which investors are
willing to accept on a bond at the time of its issue.
Statement III. If the effective rate is higher than the stated rate, bonds will be
sold at a premium. * (1 Point)
only statements 1 and 2 are correct
all statements are incorrect
only statements 1 and 3 are correct
all statements are correct
40
Bonds issue costs are most appropriately accounted for by * (1 Point)
charging them to an expense account when the bonds were issued
Option 2
adding them to any premium on bonds or deducting them from any discount on bonds when
the bonds are issued.
debiting the amount to unamortized bond issue cost.
adding them to any discount on bonds or deducting them from any premium on bonds when
the bonds are issued.
41
How would the carrying amount of bonds payable be affected by the

amortization of each of the following? * (1 Point)
Premium: increase; Discount: decrease
Premium: increase; Discount: decrease
Premium: no effect; Discount: no effect
Premium: decrease; Discount: increase
42
Chicken Wings Company issued P11,500,000, 6%, 5-year bonds dated January 1,
2022 on January 1, 2022. The bonds pay interest semiannually on June 30 and
December 31. The bonds are issued to yield 5%. Given the present value factors
below,
PV of a single sum for 5 periods : 2.5%-.88385; 3.0%-.86261; 5.0%-.78353;

6.0%-.74726
PV of a single sum for 10 periods:2.5%- .78120; 3.0%-.74409; 5.0%-.61391;

6.0%-.55839
PV of an annuity for 5 periods: 2.5%-4.64583; 3.0%-4.57971; 5.0%-4.32948;

6.0%-4.21236
PV of an annuity for 10 periods: 2.5%-8.75206; 3.0%-8.53020; 5.0%-7.72173;

6.0%-7.36009
What is the issue price of the bonds? * (2 Points)
P12,003,261
43
Chicken Wings company issues P20,000,000, 6.8%, 20-year bonds to yield 7%

on January 1, 2021. Interest is paid on June 30 and December 31. The proceeds
from the bonds are P19,572,899. Using effective-interest amortization, what
was the carrying value of the bonds on December 31, 2021? * (2 Points)
P20,000,000
P19,577,950
P19,594,191
P19,583,178
44
Chicken Wings Company issues P12,000,000 of 10-year, 9% bonds on

September 1, 2021 at 97 plus accrued interest. The bonds are dated July 1, 2021
and pay interest semiannually on July 1 and December 31.
What is the total cash received on the issue date?

* (2 Points)
P11,820,000
45
Chicken Wings company issued P1 million face value bonds for P1,035,460 on
January 2, 2022, a price that yields 10% interest. The bonds pay 12% interest
semi-annually every July 1, and December 31. For the year ended December 31,
2022, how much interest expense will be reported by Chicken Wings? Round
off final answer to the nearest peso. * (2 Points)
P102,870
46
Chicken Wings Company’s accounts payable balance at December 31, 2021

amounts to P1,771,000 before year-end adjustments relating to the following:
• Goods costing P34,500 were in transit from a vendor to Chicken Wings on

Dec. 31, 2021. The goods were shipped FOB destination and were received on
January 3, 2022.
• Goods purchased with invoice cost of P29,000 shipped FOB shipping point on
December 20, 2021, were lost in transit.
• Goods purchased with invoice cost of P57,500 shipped FOB shipping on

December 27, 2021 were received on January 6, 2022.
What amount should Chicken Wings Company report as accounts payable

on its December 31, 2021 statement of financial position? * (2 Points)
P1,857,500
47
The December 31, 2020, statement of financial position of Chicken Wings

Corporation includes the following items:
9% bonds payable due December 31, 2027- P3,063,000
The bonds were issued on December 31, 2017, and have a face amount of
P3,000,000 with interest payable semi-annually on July 1 and December 31 of
each year. On January 1, 2021, Chicken Wings Corporation retired P1,000,000 of
these bonds at 97.
What amount should Chicken Wings report on its 2021 income statement
as gain (loss) on the retirement of the bonds? Please put parenthesis if the
amount is loss. * (2 Points)
P51,000
48
Chicken Wings Company has an overdue note payable of P11 million and
accrued interest of P550,000 to Fried Chicken Corporation. In 2021, because of
financial difficulty suffered by Chicken Wings during the pandemic time,
Chicken Wings negotiates with Fried Chicken Corp. to exchange ordinary shares
for the debt. Chicken Wings issued 320,000, of its P25 par ordinary shares,
which currently sells at P32 on this date.
How much gain on debt restructuring must have been reported by Chicken
Wings for year 2021? * (2 Points)
P1,310,000
49
At December 31, 2021, Chicken Wings Corporation has Loans payable of

P3,500,000 with Metro Bank. The loan has a maturity date of April 1, 2022. On
January 15, 2022, Chicken Wings issued P4million of 5-year bonds with the
intention of using portion of the bond proceeds to liquidate the P3.5 million
loans payable. 2022 financial statements of Chicken Wings were issued on
March 29, 2022.
How much of the P3,000,000 loans payable shall be presented by Chicken

Wings as current liability at December 31,2021? * (2 Points)
P0
50
Statement I. The holder of treasury shares does not have the right to vote, to
exercise pre-emptive rights, to receive dividends, or receive assets upon
corporate liquidation.
Statement II. In a treasury shares transactions, the “retained earnings” account

may be debited or credited. * (1 Point)
Both statements are true.
Both statements are false.
Statement I is true; Statement II is false.
Statement I is false; Statement II is true.
51
Statement 1: Appropriation for retained earnings do not change both on the

total amount of shareholder’s equity and total retained earnings.
Statement 2: Appropriated Retained Earnings account is created for the purpose

of insuring the payment of dividends.
Statement 3: Appropriated Retained Earnings does not mean that assets are
segregated for a specific purpose.
Statement 4: The only proper way to eliminate an appropriation of retained

earnings after it has served its purpose is to reclassify/revert to the
unappropriated retained earnings. * (1 Point)
All statements are correct
Only three (3) of the statements are correct
Only two (2) of the statements are correct
Only one (1) of the statements are correct
All statements are incorrect
52
Statement 1: Upon issue of share rights, the issuing corporation records the
transaction by a memorandum entry, listing the additional number of shares
that may be acquired through the exercise.
Statement 2: The expiry of share rights is recorded with a loss on share rights. *
(1 Point)
Only statement 1 is correct
Both statements are correct
Both statements are incorrect
53
Chicken Wings Co. was organized at the beginning of the current year. The
following shareholders’ equity accounts are included in the entity’s year-end
trial balance.
Preference share capital, P100 par, authorized 100,000 shares, issued and
outstanding, 66,000 shares, P6,600,000
Preference share capital subscribed, 6,000 shares, P600,000
Share premium – preference, P240,000
Subscriptions receivable – preference, P360,000
Ordinary share capital, P10 par value, authorized 200,000 shares, issued and
outstanding, 72,000 shares, P720,000
Ordinary share capital subscribed, 72,000 shares, P720,000
Share premium – ordinary, P2,850,000
Subscriptions receivable – ordinary, P1,080,000
The following current year transactions relate to Chicken Wings Co.’s

shareholders’ equity: Immediately after Chicken Wings Co. was organized, it
received subscriptions to 60,000 preference shares. Subscriptions to ordinary
shares were also received on the same date. During the year, subscriptions were
received for an additional 12,000 preference shares at a price of P120 per
share. Cash payments were received from subscribers at frequent intervals for
several months after subscription. The company’s policy is to issue share
certificates only upon full payment of the share subscription. Also during the
current year, Chicken Wings Co. issued 24,000 ordinary shares in exchange for a
tract of land with a fair value of P690,000.
How much should be reported as report total contributed capital in the

company’s statement of financial position at the end of the current year?
* (2 Points)
P0
54
The following shareholders’ equity accounts are included in the statement of

financial position of Chicken Wings Co. on December 31, 2020.
· Preference share capital, 8%, P100 par (200,000 shares authorized, 60,000
shares issued and outstanding)- P6,000,000
· Ordinary share capital, P5 par (2,000,000 shares authorized, 600,000 shares
issued and outstanding)- P3,000,000
· Share premium- P3,750,000
· Retained earnings- P3,500,000
During 2021, Chicken Wings took part in the following transactions concerning
equity.
· Paid the annual 2020 P8 per share dividend on preference shares and a P2 per
share dividend on ordinary shares. These dividends had been declared on
December 31, 2020.
· Purchased 81,000 shares of its own outstanding ordinary shares for P40 per
share.
· Reissued 21,000 treasury shares for land valued at P900,000.
· Issued 15,000 preference shares at P105 per share.
· Declared a 10% stock dividend on the outstanding ordinary shares when the
shares are selling for P45 per share.
· Issued the stock dividend.
· Declared the annual 2021 P8 per share dividend on preference shares and the
P2 per share dividend on ordinary shares. These dividends are payable in 2022.
· Reported net income of P9,900,000 for the current year.
What amount should be reported as total shareholders’ equity on

December 31, 2021?
* (2 Points)
P23,597,000
55
The stockholders’ equity of Chicken Wings Company on December 31, 2021

includes the following:
12% Preference Shares, 2,000 shares, P100 par value- P200,000; 14% Preference
Shares, 1,000 shares, P300 par value- P300,000; Ordinary Shares, 5,000 shares,
P100 par value- P500,000
Retained earnings- P300,000
Additional paid in capital- P50,000
Donated capital- P224,000
The 12% stock is cumulative and fully participating. The 14% stock is
noncumulative and fully participating. Dividends in arrears are for 3 years. What
is the book value per share of common stock? * (2 Points)
P112
P146
P100
P152
56
The Chicken Wings Company has P7,000,000 ordinary share capital, P1,600,000
share premium and P900,000 deficit in retained earnings. Recapitalization was
effected as follows:
· Inventory recorded at P6,500,000 has market value of P6,400,000 at year-end.

· Property, plant and equipment with carrying amount of P12,000,000 has
P8,000,000 sound value.
· Par value of share is reduced from P10 to 5.
What should be the Shareholder’s equity after quasi-reorganization?

* (2 Points)
P0
57
On November 3, 2022, a company declared property dividends when the

property has a carrying amount of P605,000 and fair value of P629,200. On
December 31, 2022, the fair value less cost to distribute of the property is
P580,800. On February 25, 2023, the date of payment, the property has fair
value less cost to distribute of P568,700.
How much loss on distribution of the property dividend? (Note: No need to

put parenthesis) * (2 Points)
P0
58
Chicken Wings Co. had outstanding 23,200 shares of P116 par value 8%
cumulative preference share capital and 34,800 shares of P58 par value ordinary
share capital on December 31, 2021. On December 31, 2021, dividends in
arrears on the preference shares were P80,000. Cash dividends declared in 2022
totaled P300,000.
The amounts paid to the ordinary shareholders is * (2 Points)
P4,704
59
The shareholders’ equity section of Chicken Wings Co. as of December 31, 2021,
contained the following accounts:
· Ordinary share, 25,000 shares authorized, 10,000 shares outstanding- P30,000

· Capital contributed in excess of par- P40,000
· Retained earnings- P80,000
Chicken Wings’ board of directors declared a 10% bonus issue on April 1, 2022,
when the market value of the share was P7 per share. Accordingly, 1,000 new
shares were issued. Chicken Wings’ entire share has a par value of P3.
Assuming Chicken Wings’ sustained a net loss of P12,000 for the quarter
ended March 31, 2022, what amount shall be reported as retained earnings
on April 1, 2022? * (2 Points)
P61,000
60
On July 1, 2021, Chicken Wings Corp. issued 2,220 shares of its P122.1 par
ordinary and 4,440 shares of its P111 par preference for lump-sum of
P1,087,800. At this date, Chicken Wings’s ordinary share was selling at P130.98
per share and the preference share for P125.99 per share.
The amount of proceeds allocated to preference share should be *

(2 Points)
P715,751
61
Statement 1: When the company issued a share-based payment with cash

alternative, the fair value of the equity component is deducted from the total
fair value of the compound financial instrument, the excess being assigned as
the value of the debt component.
Statement 2: For share-based payment transactions in which the terms of the

arrangement provide either the entity or the counterparty with the choice of
whether the entity settles the transaction in cash (or other assets) or by issuing
equity instruments, the entity shall account for that transaction, or the
components of that transaction, as a cash-settled share-based payment
transaction if, and to the extent that, the entity has incurred a liability to settle
in cash or other assets, or as an equity-settled share-based payment transaction
if, and to the extent that, no such liability has been incurred. * (1 Point)
Both statements are correct
Both statements are incorrect
62
Determine the following: (1) Compensation expense for 2021; (2)

Compensation expense for 2022; (3) Share premium from options on
December 31, 2022. * (2 Points)
P19,750; P18,750; P37,500
P18,750; P19,750; P38,500
P19,750; P18,750: P38,500
P18,750; P19,750; P37,500
63
On January 1, 2019, Chicken Wings Company granted to an employee the right

to choose either shares or cash payment. The choices are as follows:
Share alternative – equal to 25,000 shares with par value of P30; Cash
alternative – cash payment equal to the market value of 20,000 shares
The grant is conditional upon the completion of three years of service. On

grant date, on January 1, 2019, the share price is P51. The share prices for the
three-year vesting period are P54 on December 31, 2019, P66 on December 31,
2020 and P65 on December 31, 2021. After taking into account the effect of
vesting restrictions, the entity has estimated that the fair value of the share
alternative is P48.
What is the share premium if the employee has chosen the share
alternative on December 31, 2021? * (2 Points)
P730,000
64
At the beginning of 2019, Chicken Wings Corp. grants to a senior executive

30,000 share options. The grant is conditional upon the executive remaining in
the entity’s employ until the end of 2021.
The share options can be exercised if the entity’s share price increases from P20
at the beginning of 2019 to above P30 at the end of 2021. If the share price is
above P30 at the end of 2021, the share options can be exercised at any time
during the next five years, i.e., by the end of 2026.
The entity estimates the fair value of the share options on grant date to be P5
per option. This estimate takes into account the following market condition:
· The possibility that the share price will exceed P30 at the end of 2021, i.e., the
share options become exercisable; and
· The possibility that the share price will not exceed P30 at the end of 2021, i.e.,
the share options will be forfeited.
The following actual events occurred in years 2019 to 2021:

2019
· The share price has increased to P24.
· The entity’s estimate of the fair value of the options is P4 at the end of
2019. This takes into account whether the market condition will be satisfied by
the end of 2021.
2020
· The share price has decreased to P22. However, the entity remains
optimistic that the share price target will be met by the end of 2021.
· The estimated fair value of the share options is P3. Again, this estimate
takes into account the market condition noted above.
2021
· The share price only reaches P28 by the end of 2021.
· The estimated fair value of the share options is zero, as the market
condition has not been satisfied.
How much is the share options outstanding at the end of 2020?

* (2 Points)
P100,000
65
On January 1, 2022, Chicken Wings Company granted the president 50,000

share appreciation rights for past service. These rights are exercisable
immediately and expire on December 31, 2023. On exercise date, the president
is entitled to receive cash for the excess of the share market price over the share
market price on the grant date. The president did not exercise any of the rights
during 2022. The market price of the share was P100 on January 1, 2022 and
P115 on December 31, 2022. The grantee exercised the rights on December 31,
2023 when the market price was P110.
As a result of the share appreciation rights, what amount should be

recognized as gain on reversal of share appreciation rights in 2023? *
(2 Points)
P250,000
P0
P750,000
P500,000
66
NAME (Surname, First Name MI.) ALL IN CAPITAL LETTERS *
LUMAPAG, SARAH D.
67
STUDENT NUMBER *
2018-00020-SJ-0
68
BRANCH/CAMPUS *
PUP Main BSA 4-1
PUP Main BSA 4-2
PUP Main BSA 4-3
PUP Main BSA 4-4
PUP Main BSA 4-5
PUP Main BSA 4-6
PUP Main BSA 4-7
PUP Main BSA 4-8
PUP Main BSA 4-9
PUP Main BSA 4-10
PUP Main BSA 4-11
PUP Main BSA 4-12
PUP Main PUP Alfonso
PUP Main PUP Bataan
PUP Main PUP Binan
PUP Main PUP Lopez
PUP Main PUP Maragondon
PUP Main PUP San Juan
PUP Main PUP San Pedro
PUP Main PUP Sta. Maria, Bulacan
PUP Main PUP Sta. Rosa, Laguna
PUP Main PUP Sto. Tomas
PUP Main PUP Taguig City
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ACCO 30093 - Integrated Review Course in Financial Accounting & Reporting

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6/25/22, 10:56 AM ACCO 30093: Integrated Review Course in Financial Accounting & Reporting

ACCO 30093: Integrated

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Regular account be reported as current assets net of overdraft.

Cash on hand-P440,000; Petty cash fund-P33,275; Security Bank current

allowance for doubtful accounts

Chicken Wings Company is engaged in buying and selling of office equipment

An aging of the receivables indicates that P20,933 of the accounts receivable

Accounts receivable, P114,788; Allowance for bad debts, P11,785

Cost of goods sold.

Installation and assembly cost.

Cost of store preparation.

Initial delivery and handling cost.

Chicken Wings Company purchased a copier for P447,150 on January 1, 2021.

Chicken Wings Inc. purchased a new camper’s bubble pool machine on an

Issuance of promissory note payable in 5 months – 334,000 per month

Bubble pool machine installation costs Chicken Wings a total amount of

Legal fees incurred by an entity in defending its patent rights should be

Chicken Wings Corporation (CWC) has provided intangible assets as follows:

• A patent was purchased from another company for P4,680,000 on January 2,

• On January 1, 2022, because of recent events, CWC estimates that the

Transfer from investment property to property, plant and equipment is

When there is change in use

Based on the entity’s discretion

Reclassification is never allowed

What is the total investment property that should be reported in the

Which of the following should be considered when classifying Investments in

The market in which the securities are traded

The entity’s intention in acquiring the investments

The entity’s business model

Statement 1: When debt investments are designated as at FVTPL, reclassification

Statement 2: Reclassifications of debt investments are allowed when there has

Statement 1 is false; Statement 2 is true

Both statements are true

Statement 1 is true; Statement 2 is false

Both statements are false

On January 1, 2020 Chicken Wings Company purchased P2,940,000, 8% bonds

I. Carrying amount of the equipment at year-end.

Lower of I and III.

Higher of II and III.

Lower of II and III.

Higher of I and III

On December 31, 2021, Chicken Wings Company classified one of its

What amount should be reported as impairment loss for 2021? * (2 Points)

On December 31, 2021, Chicken Wings Company classified one of its

What amount should be reported as impairment loss for 2021? * (2 Points)

What amount should be recognized as gain on reversal of impairment on

What amount should be recognized as gain on reversal of impairment on

Which among the foregoing statements are true?

Statement I: Consumable plants are accounted for as biological assets.

Chicken Wings Inc. reported the following:

Bearer plants, P3,350,000; Consumable plants, P1,340,000; Bearer animals,

Which of the following would be classified as biological assets? * (2 Points)

Chicken Wings Inc. reported the following:

Bearer plants, P3,350,000

Which of the following would be accounted for as property, plant, and

Commissions to brokers, P5,500; Transportation costs to the market, P3,850;

What total amount shall be classified as costs to sell in accordance with

Biological asset, 1/1/2022 - P225,000

What amount shall be reported as biological asset on December 31, 2022?

Chicken Wings Manufacturing Company sells washing machines that include a

Evenly over the period of warranty

When the service calls are performed by the independent mechanic