POLYTECHNIC UNIVERSITY OF THE PHILIPPINES College of Accountancy and Finance ACCO 20103; Intermediate Accounting 3 Final Departmental Exarnination ‘Angast 1, 2023] 12:00 pn ~3:00 pm Cours, Year & Section: —_ psf Do] Name: Testrcton: Choos the best answer. ‘THEORIES (Ipt- each) 1A provision shoul be recognized for which ofthe following? ve Fore operating losses 1 Pousible losses from unfavorable outcome of cou cases © Decline in vale ofthe ase de to impairment Usb for unredeemed coupons 2. The following statements relate to non-financial abilities. Indicate which of them rete oflse T. Under the expense warranty approach, companies charge warranty costs in ll years ofthe warranty period ‘and not inthe period in which they comply with he waranty. + IL When ii po longer probable tht an onflow of resources would be required to sete the obligation the provision should be revered TIL Changes i provisions shall be reviewed at each reporting date and the amount of the provision shoald be jute accordingly a prior period odustment. TV. Provisions fo fitre operating loses canbe recognized. 'V, Where the effect ofthe ie value of money is material the amount of provision shouldbe the present value ‘ofthe expenditure expected tobe required to sete the obligation, 7a Tre; True False; False; Te Tre; Fale False; False; True (> Tre Troe; True False; Tre True, True; Fuse; Tre; Toe 13. What impact does a bargain purchase opion have a the preset value ofthe minimum lake payments ‘computed by the lessee? ‘There ino impact asthe option does not enter into the transaction until the end ofthe lease term 1b. The lesce rust increase the present vale ofthe minimum lease payments by the present value ofthe ‘option price, & The lessee mst decrease the present vale of the minianum lease payments by the present val of the ‘option price. 4. ‘The minimum lease payments would be increased by the eption pice. “4. tn accordance with PERS 16, whats the measurement of sight of se (ROU) asst aequied under 3 eae 1." ati» dct cout * eam cont of damarting -ncemvestrcived 1 Lene ably + inital eret cout + eatimatd cost of dsmanting- incentives received Lena ibility + inital ier coe + estimate cst of ismantling + incentives eceved 4 Lease ibility intial divect coat eximated cont of dimaning incentives received 5. Iman opcrating leas hati recorded by the lessor, the equal monthly renal payments should be ‘2 Recorded a eduction of depreciation 1. Allocated between redaction in eae reeivable and interest expense Recorded as reduction in the late receivable 4. Recorded a renal income 6. Which statement characterizes an operating lear? ‘a. The lessee records deprecation and interest. 1b The leete record &lese obligation «, The lessor transfers tte of the underlying asset tothe lease forthe duration ofthe leas erm {4 The lessor records depreciation and lease revenue, 7. Wheo accountng fora lease incentive (bomss) received bythe lessee under lease as expense approach, itis ‘2 rofeton in rental income over the lease term 16 amincreas in rental expense over the lease tem . ersdacton in rental expense over the ease tem Page 1 of Scanned with CamScanner4. amincrase in rental income over the ease tom 1. When should lessor recognize a income a non-refundable ease bonus paid by a lessee on sigaing an operating lease? When recived tthe expiration ofthe lease 1. Atthe inception ofthe lease Over the lease tem 19. Under direct finance lease, when the fir valu ofthe eased asset is ower than the resioal value a the time the asl is returned, loss on finance lease ‘2 Shul be recognized when the residual vali ther guranteed or unguaranted, 1, Not recognized whether residual vale is yuaranteed or unguaranteed. Shall be recognized when the residual vale is guaranteed. {4 Shall be recognized when the residual vale is unguaranteed, 10, Statement I; Under direct finance laze, the ost ofthe leased asset sequal tits at market valu. Santemont 2: Under direct finance lca, Initial direct cost ae added tothe ct investment in the lease and amortized over the life ofthe leas as yield adjustment (rfaction ftom interest revenne). ‘2 Only Statement I is uae Bodh statements ae tae 1 Only Statement 2s oe ‘Bodh statements are fle, 11, Under sales type lease, nt ivestment in the lease is equals tothe ‘a Present vale ofthe groct rental plus presen value ofthe gusranced residal value 1, Present vale of the gross rentals plus present value of the resideal valve, whether guaranteed or nguaranteed Present value ofthe gross renal plus present value ofthe unguaraneed residual value. 44 Preeeat value ofthe gross ral and preseat value of residual value is ignored 12. Which ofthe following lease income will be recognizes by the lesor under finance lease? Tuerest income Gros profit a Dealer's ease Yes Yes '. Direct fiance lewse Yes Yes © Dealer's ease No Yes Dire fnancelesse No Yes 13, Whats the basic principle fr accountng for income tates under PAS 127 a There mut be no large Muctuation nan enterprise's income tax expense from pri to period: ‘3. Thcincome tx expense must be elated to the income o expense tem that results a income tx en i eee to recognise defowed tx laity ar ast when the book bass forthe asst or fais oec sal os tax base andthe afference duet temporary aifferece: 6 “Amen nrequied to recopnize deere tax Tibi orate when the Dok bas for thease Tabliny tno qual oi tax Bae and te dlference i de to permanent difeence. 14. A major difereace between permaneat differences and temporary difeences is permanent differences da not represent generally acceped accounting practices 1 temporary differences occur les frequently than permaneat differences temporary differences may become permanent differences with the passage of time, but permanent Aiference ean never become temporry diferences . temporary differences reverse themselves in subsequent reporting periods, whereas peanent differences donot reverse 15, Which ofthe following differences would resst in future taxable amounts? a. Expenses and lates tht are deductible fer they are recognized in financial income 1 Revenues or gine that are taxable before they are recognized in nancial income Expenses or losses tha are deductible before they are recognized in finarial income ‘&_Rovenues or guns that ae recognized in fnancia income but are never included i taxable income 16, Which ofthe following i cores formals to compte for toa ncome tax expense? 12 Garren income tx expense pls increase in deferred ax aset minus increase in deferred ta ibility 1. Curent income tx expen minus inereae in deferred tax ase plus increase in defered tx liability ‘2 Cumnent income tx expense plus increase in defened tx asst pls increas in deferred tox ibility ‘4 Current income tx expenssinusdeerease in dfered tax asset ps decrease in deered tx liability Page 0f9 Scanned with CamScanner17. An ent ha its tnd and building revalued during the current year. The recognition ofthe increate inthe revalied amount of teases crea ‘2 DTA, with an accompanying income tax benef in profit ols '. DTA, with an accompanying income tax Benefit in other comprehensive income 18 Which ofthe following isa dedution component of employee benefit expense iaken fo profit or loss under defined benefit plan? a taerest cost Expected tum on plan assets 1B Current service cost 44 Actual return on pan assets 19, The present value of pension benefits accrued to date using assumptions aso fare compensation evel i th ‘2. Accrued pension cost & Past sevice cost 1, Projected benefit obligation 4. Accumulated benefit obligation 20.1. A forma in a defined contribution plan defines the benefits thatthe employee wil recive athe ime of T. Any unpaid contribution athe end ofthe prvi forthe defined contribution plan salle recognized as accrued lisbty, TIL. The amount expensed in «defined contibtion plan not necesaily the expense tobe recognized tnce ts accounting is mare complex. True, Fate, Flee 4. Tre, False, Tre 1 False, True, False © False, Fale, True Truc, Tre, False 21, Which ofthe statements concerning plan atts are corec? 1. Plan assets are available tobe used only fo pay or fad employee benefits. 1 Plan aces are available tothe reporting ety own creditors. 1. Plan assets canbe reurted tothe reporting entity when the remaining asses ofthe fund ae suicint to mect all the elated employee benefit obligations of the plan ofthe reporting ei 1V. Plan assets comprise assets held by 3 longterm employee benef fund and qulfVing insurance policies. kn tt & LIV © LimIV 4M, 1v 22, Wat measured by the defined benefit obligation? 1. The pension expense, computed bythe plan formula applied to years of service fo date assuring fare ‘ala eves b. The pension expense, computed by the plan formula applied to yeas of service to die, using existing salary levels © Thepeasion oblisstion, computed by the plan formula applied to yeas of sevice to date assuming farure salary fevels. 44. The pension obligation, compute by the plan formate applied to years of sevice to date, sing existing salary levels. 23, Redeemable preference shares ae classified by the issuer as ‘a. Financial litility 1b. Onn equity, presented in shareholders’ equity ©. Redaction of share capital in shareholders equity d Aorb 24, The entry to record the retirement of thares a below their orginal acquisition cost includes A debit o share premium arising from the original issuance. Bb, A debito ay share premium arising from treasury shares. A debicto retained earings 4 Allof there including [e] when [1] and [6] are insufcient to offet any difference between te original fseuance price andthe retirement pice Page of Scanned with CamScanner25, n 2023, Fisher, Ine, issued P10 par value ordinary share for P25 per share. No other share transactions ‘occurred nil March 31, 2023, when Fisher acquired some ofthe issued shares fr P20 pe share and reied them, Which ofthe following statements carecy sates a effet of this acquisition and retirement? "2 2023 profit is deereased. Share premium is decreased. 1. 2025 profits increased. 42 Retained earnings is increased. 126, Assming that the issuing company has only one class of share capital transfer fom retained earings to ‘ontbuted capital equal othe market value ofthe shares issued is ordinarily a characteristic of. in either a bonus fsue ora share spi ‘share split bu nota bonus issue nether a bonus issue nr a share spit bonus isue but nota share split 27. Which ofthe following isnot legal resticton related to profit distributions by a corporation? 2. The amount distributed to ovmers must be in compliance with the Philippine laws governing corporations 1b The amount distribute in any one year can never exceed the net income reported for that yea. Profit distributions must be formally approved bythe board of dirctors. Dividends must be in ull agreement withthe capital stock contracts as to preferences and participation. 28, Arestition of retained earings is most ikely to be required by the ‘2 "Purchase of treasury sick 1. Amortization of past service cost Payment of last maturing series of serial bond issve {Exhaustion of potential benefits of the investment ret 29, Allo the following statements are true, except one ‘2 Aease that contains a bargain purchase option atthe end of S years is nota short-term lease. By Ifehe lessee elects the short-term lease exemption it must be applied toa class of underlying asset and hall teat any subsequent modifiation or change in lease term as resulting in 2 new lease. ‘e. The election for short-term leases shal be made by clas of underlying asset to which the asset relates. 1G. The asessment ofthe value of underlying asset is affected by the siz, nature, or circumstances of the lessee. 30, When an entity issued rights to existing shareholders to purchase unissued ordinary shares at more than par value, share premiam would be recorded when the rights Become exercisable a Lapsed b, Areexersised 4. Areissued PROBLEMS (apts. exch) ‘31: Takoyaki Co sll service contacts for cash Te vervice contrat are fora one-year, Wo ear, oF thee year ‘pend Cash recess fom consacte ae credited to weumed service contact revenues. Ths account ad ® Balan of P700,000 on December 31,2022 before year-end adjustment. Service contract costs are charged as Insured to the service contact expetae account, which had a balance of P140,000 on, December 31,2022, Outstanding service contracts on December 3, 2022 expire as follows ‘Dring 2023 ‘Daring 2024 ‘Baring 3025 110,000 150,000 100,000 What amount of unearned service contrat revenue should have been reported by Takoyaki Coin its Dec. 31, 2022 statement of financial position? 1.7 700,000. ,P560,000. .F360,000, 4.7 250,000, 32. Takoyaki Inc. is involved in Itigation regarding a foulty product sod ina prior yea. The company has ‘consulted with ts atorney and determined tha itis posible that they may lose th case. The atomeys estimated that there i 40% chance of losing. If thie is the cate, thee atorey estimated that the amount of aby payment ‘would be P500,000. What isthe required journal entry as a result ofthis ization? ‘a. Debit Litigation Expense for P500,000 and credit Litigation liability for PSO0,000. 1 No joural entry is require. ©. Debit Litigation Expense for P200,000 and eet Litigation Liability for P200,000. ‘4. Debit Litigation Expense for P300,000 and erdit Litigation Liability for P300,000. 33. Takayaki Department Store ells gift centficates that ae redeemable only when the merchandise is purchased ‘rom ts source Itisthe company's policy to recognize the amount redeemed as realized. During 2023, Takoyaki S01 gif cerifistes amounting to 1,800,000 and redeemed gif exteates worth PI,$60,000. Gif certcates Pape dof Scanned with CamScanner‘urstanding on January 1, 2023 i PS20,000. The company’s gross profit els 40%, What i the Habliy for ‘outstanding git cerifeates on December 31,2023? ‘8? 760,000, 'b.P720,000 « P6R0.000, 4.P520,000 34, On July 1,2022, Jason Co, lated an squipment witha fie value of F2,000,000. The eae provided that Jason ‘would pay 13,750 on Tuly 1, 2022, followed by PS00,000 on June 30 ofeach subsequent year, The lease hasan Implicit imerest rate of 8% and incremental borrowing rate of 10%. Ata resul ofthis ramsaction, what would as non-current lilies in Jason's statement of financial pasion for June 30, 2023? onsen wFige 0 oo Pianaate © ri6ss9s0 35.On Janay, 2020 se ete in les fra aches wt he following infomation: ‘Raoul teppei are tegiingDeser 31-208 Sos tte Sys epic te me ‘Th ees eran he rile n Jamar 1,202, teed cy thee Yar. The ene Srewie leds Glowing tors: “aml ren pyc in antag December, 2022 2o0s00 ici me is tar th cont of depreciation io be oped for he ight oft set in 2022 ois eeiseas rita a issste 36. Lychees Company entered into an agreement to lease a machine under finance lease January 1, 2023. The ‘company isto pay P12,000 during the inital period ofthe lease for five years with the fist payment made 00 December 31,2023 (in arrears). The present value ofthe minim lease payments P45.489, The ate of interest {implicit in the lease is 10%. The company prepares its annual sccounts on December 31, 2023. The expected {Sef lifeofthe machine sit years. What rhe caring amount ofthe rightafuse Machine nthe Deceber 31, 2025 financial statements? a PRS b.P30,000 .PIB,I956 4.724.000 37. Well Co. eased office premise to Fo, Toe. fora S-year erm beginning January 2, 2021. Under te terms of the operating lease, rent for the frst year is PBO,000 and rent for yeas 2 through $ is P125,000 per annum. However, 36 an inducement to enter the lease, Well granted Fox the fist six months of fee reat. In its Decentber 3, 2021 profit or loss, what amount should Fox report asa rental expense? ‘a P80,000 '. P08.000 fe. PII6000 4. P120,000 38, Gravy Company leascs out an equipment under direct finance lass. Tacs is no residusl value nor bargain ‘purchase option. The entity wishes to cam 6 on a Sayer leaf of equipment costing 13,234,000, Fes annual Tease payments payable immetiatly on the contact dae on January 1, Year 1-"The PY of annoy due at 69 for ‘year 4312, How much isthe eal nterea revenue (unearned Inicrnt revenue) over the lee fer? ‘3 P1.293,600 ws P516,000 P1394 500 ‘d. P750,00 139. Burger Inc. lease an equipment from Lisa Corp. The leat erm ie year starting on January 2, 2023. Equal enual payments under the lease are 900,000. The fret payment was ade on Jaary 2, 2029 and subsequent payments ae tobe made every January 2 thereafter. The equipment cost P5.281,200 which isthe fair value of he ‘ston that date. The impli rate inthe lease it 10%. How much i the Net Inveziment om December 31,2024? ‘a PA311 252 '.P4.819,320 €-P4381,200 5.281.200 40. An entity leased an equipment from Lavander Inc, on July 1, Year ofan 8-year period. Equal payments of "600,000 are due on July 1 ofeach year beginning immediatly. implicit interest rate in the lease is 10%. The telling price ofthe equipment is 3,520,000 and te costs P2, 800,000. The leases classified by Lavander as sales type lease. What should be recognized as income fom the lease for Year 1? ‘2. PRG6.000 be. PI,012,000, ©. P292,000, 4. P720,000 ‘41. Lychee Company leased a pice of equipment toa lessee on Api! 1, 2023. The leas is appropriately recorded asasalc by Lychee. The leases foran 8-year period ending March 31, 2031, The frst of 8 equal annual payments ‘of P175,000 (excluding executary costs) was made on April 1, 2033. The cost of the equipment to Lychee is 'PE40,000. The equipment hasan estimated useful life of 10 years witha guaranteed residual value of P100,000. Ate end ofthe lease term, the leased equipment reverts the lessor. The intrest rate implicit inthe lease is 10% (Round off the PV factor to four decimal places, then donot roundoff during the computation). How much is the Sales tobe recognized in 20232 ‘2 P980.258 ' PI,073.620 933,608 P1026 970 Page S069 Scanned with CamScannerork 42. The following data relate to sale and leaschack of equipment of Int AceP2 Company on December 31, 2003 Seling pice (equal to preset vais of Rentals) P 993630 Coot of Equipment 1,200,000 ‘pecumalated Depreciation 100,000 ‘Aroual Rent payable 300,000 ‘Emated Remaining 3 Lease Term 4 leprae a% What amount of loss on sale and leaseback should Int AccP2 Company recognized immediately as of December 31,2028? 3 P106,370 6. ¥206,370 Ae P506370 4 Po 143. Atthe begining ofeurent year, Dizzy Corporation sold an equipment with remaining life of 10 years and immediately leased itback fr $ years at the prevailing market rental Sales Price at fir value 6,000,000, Carrying amount of equipment 41500,000 ‘Anna ret payable at the end ofeach year ‘0,000 pict interest rate 10% Preseal valve ofan ordinary annuity of 1 at 10% fr four periods 37 Whar amount shouldbe reported as inital lease lability? ‘= 73,000,000 '. P2,536,000, . 73,000,000 4 Po 4, Tn 2022, Shiba Co, reported pretax financial income of P9O0,000. Included in the pretax financial income: _ eee» ‘was P150,000 of nontaxable life insurance proceeds received asa result ofthe death of an officer, P200,0000 of Cusfony ‘waranty expenses acoed bu unpaid as of December 31,2022, and 50,00 of goodwill amortization conidred 00) orsnae tar pu founda dete conte pet paling eye and 81 tnincone te rate of 29%, the amount of income tes payable om December 3, 022 would) 7 2 7235,000 .F350,000 237500 F200 000 4, South Foce Co. reported a depreciation of P60 O00 on i 2022 ta tun. However, i its 202 income saizment, Sou Tace reported a deesiaon of P2S0000. The dierece fn doecition tsa temporary irene hat wll eves over ine Assaning South Face’ tx aes ean at 2%, what amon Should edd tothe deferred tx ast n South Faces December I, 222 balance shee? 2 Pisano ‘P7500 ceaseo 4d r0 46, Anis Co’ sncome statement forthe yar ended December 31,202 shows pret acome of 2.20000. ‘hs tolowing te wate lay onthe tx ca and nt acoanng sr 2, 200, 260 Take Rona renee Rertinome To Ps + Rene ‘Depreciation 190,900, 240,000 eos, m1 Peon fice’ He iuee é soto 3 urfero aun tact rt TIES 25% what amet of are pb or 20332 1 rare oe wikis PEhsooe 17. Ca opr pees facie incme of 00,00 forthe yer 2022. Among the ems repaid a 20 acome stent re “=e . perpas intron tine Sept ol eo Procatsceaed fom if insurance of deh ofcer "2,.0,000 Gey ‘Accel real ncome 00,000 “There are no temporary or permanent differences in prior years. What amount should Memte report as deferred tex lability on December 31, 2022. Tax rae is 25%. ‘a. PS20,000, b.Ps20,000 ©.P295,000, 4.200.000 48, MyCraftCo. at the end of 2022, its first year of operations, recognized a pretax financial income of P700,000. Reflected in this amount are installment sales worth P700,000 and estimated expenses amounting to TOO) ES PI, 100,000, ¢ ‘The estimated litigation expenses of 1,100,000 wil be deductible in 2024 when itis expected tobe paid, The installment sales wll be realized inthe amount of P3S0,000 in each ofthe next two years. The income tx rate is 25% forall years. The eurrent tax expense is: Page 6 0f9 Scanned with CamScannera P175;000 .P275,000 775,000, 4.7625,000 49, Hongga Plas Co.'s statement of comprehensive income reported P1,600,000 income before provision for {income tes. To compute the provision fr income tes, Ue Following 2022 data ae provided ‘Advanes client ven haa ae (ice om ees poveroent od tty Screen tga sate Inencess a epson ep or i redlcrs Frc semen purpose ; Emctedinone tena 0% #20600 What amount of current income tax lability should be reported in Bongga Plus Co.'s Dec. 31,2022 balance sheet ‘2 430,000 '. 400,000 < P375,000 4. 325,000 450. Lychee Company camed an income under aceral basis ofPI,200,000 There were no permanent differences [UOT ‘tit Tuure deductible emount and futre table amount ef P70,000 and P90,000 was recognized during they | It by Jour The curently enacted tax rates 30%, 32% for 2024 and 35% in 2025, Half ofthe future deductible amount AT 1 tapected to revere in 2024 and the resin 2025 while all frre taxable amouns are expected io revene in fe (287% 2025 ow mach the total ex expense in 2023? 2. P348,350 b.P362,050 360,000 345.950 CL™> 51, Lychee Co, showed ints memorandum record the following forthe yeu 2023. Fairvale of pension plan ates, January! P2,300,000 Fair vale of pension pan ase December 31. 2875,000 ‘Conributons wo the plan 250,000 Benefits pa to retrcs 350,000 Interest cost used by the entity % ‘What ie the actual return on pension plan assets and actuarial gen o Tos taken fo other comprehensive Income? 2 P230,000 and P66,000 loss .P275,000 and P91,000 loss P2470 and 66,000 gain 4. P275,000 and P91,000 gain W oso 52. Purple Company grant al employes two wesks paid vacation for each fll ar of employment. Unsed 7 ‘cation can be scale nd cad forward to mceeding years. In May 202, the company's anda ry 2,49 increase dat, the company ranted a1 salary increase, There was no employee fumover in 2022 Infmation la ‘aig lo year 2022 lows ‘sbi for nasa vacation, Insary 1, 2002-——————-P160,000 “eatin taken by ples in 227 00 Neato ered for woven 202, aja i camera 120000, How much nthe action pay expense forthe yar ended Dee 3,202? 1» P120,000 1b P125,000 . P130,000 4. Puen 000 53. On January 1 2023, Purple Company had the follwing balances ints memorandum record: ‘ir walu of pan assete-—-""- P.200,000 an Benefit obligason 3,000,000, ae dita rated terranes espn fr 2023 a flows: Past service cost Contribution f the find Benefits paid ‘Actual return on plan assets Discount rate 4, Purple Company provides retirement benefit to employees through defined contribution plan. The plan provides that Jerry shall contuibute annually 8% of gi0ss payroll a funding agency. Tn addition, the company fluo reir contribute 3 of annual sles in excess of P30M. Gross payrl ofthe company in 2022 ws 850000 and tol sles amounted to SM. In 2002 the company Cotbed PHSO.00 tothe ute. How Page 9 ar 90 sod l 250 270 J&4 Scanned with CamScannermuch prepaid or accrued benefit cost was reported by Parple in its Dee. 31, 2022 statement of financial postion? ‘2. P80,000 prepaid benefit cost = 7170,000 prepaid 80,000 accrued benetit cost 4. P 170,000 seerued '55. On January 1, 2023, Trisha Company reported the fai value of plan assets at P6,000.000 and projects ‘benefit obignfn at P&000,000, During the year. the entity made a hump sum payment io certain plan jaricipantsin exchange for their igh fo receive specified postemployrent benefits. The lamp sum payment Sn the present value of he defined benefit obligation setied was P1,000,000. Im additon, te tes 00,000 ‘. Tellowing data are gathered during he curvent year. ‘Garret ese cost 900.000 Ie, ‘Real esi on plan ase ton.000 feo Contrbation othe plan S000 Discount te 2% What ithe employee Benefit expense? P40 000 Pr,80,000 «.P900,000 4.9 940,00 56. Lychee Co. provides retirement benefit to employees through defined benefit plan. The trustee administering the plan and your analysis ofthe plan provided the following information for the year ended December 31, 2025 ‘lan assets at air vale, January 1 1,250,000, Bensi bia, Jaay 1350000 2,00 yuna! Compenyscontbution othe fund 2360.00 yepen Severe av.000 Discount rate % 141,309 ‘Actuarial loss on defined benefit obligation 50,000 (01,00) ‘Acti ss on pln ase 00 Pastecrvce cont teense of pln amendment 30000 Benefits paid 120,000 2/201, 600 “The retirement benefit expense taken to Pa L forthe yeat 2023 was determined tobe P2,309,000. FTow much is ‘the net defined benefit abilityasset that willbe shown in the Dec. 31, 2022 statement of financial position? 100,000 lability 99,000 ibility ’b. P100,000 asset 99,000 asset 51. Lychee Co. showed in its memorandum records the following forthe year 2023, "air value of pension plan acces, January 1 2,300,000 Fair value of pension plan assess, December 31 2/475,000, Contributions the plan "250,000 ‘Benefits pad to resiece 350,000, Toterest cost used bythe ety me ‘What is the actual return on pension plan assets and actuarial gin o loss taken to other comprehensive ince 2"P230,000 and 766,000 loos {& 1275,000 and 791,000 oss B Fa47/300 and Poe000 gain &7a75;000 and P91,000 gain st, Mamba Corporation is authorized to issue 100,000 shares a 20 par ordinary share. Atthe beginning of 2023, {8.000 ordinary shares were sued sod outstanding. These thares Mad been lasued at P27 per sare. During he year, Mamba Corporation entered into the following transactions “january 2 Issued 1,300 ordinary shares at P28 per share March 19 Exchanged 12,000 ordinary shares for a machine. The ordinary shares were selling at P30 per share. May8 — Reacquired $00 ordinary shares at P29 per share. July 19 Accepted subscriptions fur 1,000 ordinary shares at P31 per shace, The contact, «alld for 10% down payment with the balance due on November 30. ‘August 31 Sold $00 of weasury shares at P32 por share. Nov 30 Collected the balance due on July 19 subscriptions and issued the stock cenificate How much is the total contributed capital for December 31,2023? 1 P846,000 ». P914,900 P929,400 4. 943,900 Page 8 of 9 Scanned with CamScanner59, The analysis ofcharcholder equity of Morant Company January 1, 2023, showed the following: (Ordinary share, pat value of #20, authorized 200,000, ‘shares, fsued and outstanding, 120,000 shares. P2,400,000 ‘Additional paid-in pial “480,000 Retained earings 1,540,000 “The company es the cost method of accountng for treasury shure and the following transactions took place: ‘Aeauired 2,000 shares oft share fer 70,000, Sold 1.200 treasury shares at P40 per share, Retired te remaining, hares. What is che amount ofthe additonal pali-in capital at the end of 20237 ‘= 462,000 ‘b. 474,000 e. PaT6800 80,000 60, Zion ine.s total sharcholders” equity was P900,000 before recording the following share transactions: ‘Received cash subscriptions for 10,000 shares with pa value of PI at PL4 per share. Shae issuance costs amounted 19 F2,000. + Received subscriptions for 20,000 shares at P20 per share. Twenty-five percent down payment was collected ‘on subscription date. ‘Collected the remaining unpaid subscription price of 15,000 subscribed shares and issued the related share p00 , certificates. Share isuance costs amounted to °3,000. 7 How much is Zion Inc.'s total shareholders equity after recording the transactions above? ‘ P1,490,000 'b. PI,510,000 ‘e.PI,360,000 4. P1610,000 61. Draymond Company issued 10,000 ofits 6% preference share; par P100, at P125 per share. Each share cared 4 detachable share warant for one sharg of Draymond’s ordinary share, PAO par, ata speified option price of 'PS0 per hare. Immediately after issuance, the market value of Draymond’s preference share was P1,140,000 and the wants was PSOQOD. Whar prion of the proceds shouldbe ceded te ordinary share waren ‘outstanding? 2 PO b, 60,000 & P62,500 4. 250,000 (62. In September 2019, West Corp. made a dividend distribution of one right foreach ofits 120,000 ordinary shares outstanding. Each right was exercisable for the purchase of 1/100 ofa share of West's P50 variable rate ‘preference shares at an exercise price of P80 per share. On March 20, 2021, none ofthe rights had been exercised, and West redeemed them by paying each shareholder PO.10 per right. As result of this redemption, West's shareholders’ equity was reduced by 2 PI20 b.P2,400 «PI2,000 4. P36,000 68. M December 31,2022, Amri Company had 20,000 shares of P20 par value treasury shares that were ‘scquiedin 2022 at #24 per share. In May 2023, Ami issued 15,000 ofthese ueasury shares at P20 each. The ‘cost method is used to record the teasiry share transactions. -AxDecemer 31,2023, what amount should Ama Company show in notes to nancial ratements a ‘estieion of retained earnings as rel ofits Weasury share transactions? Pi10,000 . P100,000 ‘e. P120,000 4 P180,000 (64. At the beglaning of 2023, Ahmet Company ad retained eatrings of P3,000,00, Thsughout the Year the company hed 20,000 shares of P100 par value ordinary shares hat ae esded and outtanding During the year 2023, Ahmed Company reported profit of P5,000,000, purchased treasury shares for PS80,000, declared cash dividends of 500,000, reissued all easury shares at gain of PL80,000, and declared and issued 5,000 ordinary shares as bonus issue when the market value was P10 per share. What isthe retained earings balance at December 31, 20237 ‘a P6,180,000 b. 6,000,000 P5930,000 4 5,750,000 65. On March 1, 2022, CPA Corporation issued 800,000 of 8% nonconvertible bonds at 104, which are due on. February 28, 2027, In addition, each 1,000 bond was issued with 25 detachable share warrants each of which ‘entitled the bondholder to purchase for SO one share of CPA ordinary shares, par value 25, The bonds without ‘the warrants would normally sell at 95. On March 1, 2022, the fir value of CPA"s ordinary shares was 40 per share andthe fair value ofthe warrants was 2, What amount should CPA record on March 1, 2022 as share Premium—share warrants? 40,000 b.41,600 7,000 14.83.20 '*END OF EXAMINATION*** Page of 9 Scanned with CamScanner