/

<.,.I\ 1<1:v1r-.\\ s< ·11( ., 1: •.

I·.- ; • 110: •

1·1� If I ll ., , ;\( '{ 1.>l INTl�Hi I. PRF.WFt:K 1.(.:< : I kl-: "' 1\LIX SI Y V Al.IX .. rRl<F.P.

1,· '.I'" 1·1� .1' :.d� on I J•:,··:m ht:r .11. 201.' ·

. ·_.:,11. 11�11i1 1 i.1111 . ''"\,:1d1Jll u1 1·�uu.1Jl1u

.1. .·wv. .Ju·J
•
•• ! ••••
P nh· 1.·:i�li limd { 1.1111·eplrni:-.h1:d pet ly tt\c;I. cx1�:01::.1· :p I 0.0001 �0.':l00
7 500:)0<: •
\t:n>llllh ll.'l•:n·;1bk
;.,t1 tvs l'l'l'l'l\· ahk. i11dut1111g discounrrJ ic.t:· 1•· 1111 ill\ / 3.1100.00!i
.

tI t 1-'1 ,, 4.0oO,,iV· ·
l11\'t0111l1n·. •:xl'ltidi11l-' j.!urnb out crn1s1�n111• ·111
\v:1ilalik l11r s;ik fin:11i..1 .. d �1:,st:l
1.:'0IJ.!J()'..

1 '\.'lnn:d ta.-.: ;\S\l'I I .20Q.ll0�. •

I ot.tl l'llfH!IH ilS'\1.'I� :!,J,j.5UJU��

\11 .111.tlvsi, di:--1.·ln'tvd tlw1 i1ccuunts n:cL·:vahl .- ... 111nrised traoc accounts of 1'5.00U.000. !I.:
;
,,( :11·-.·111 1111, \�itli l:l'L'Jit klla11c�:-, PI .IJ(:I/ IJ'>O. . ;. 1 .. . for .:;u�t01ful .1<.:cour1l:-. 1'500.UIHJ ;:::�
,;i..:e
"vli111!:' 111·1\ L' ol Pl.(HJO.IHJ() nl l,!Oud., 111:. 1·1� l••l.·1:.!.lll1cllt \11th a marh.up 111 '-Ou.., 1111 ;..:\!-;: I·
";i� ;1h1 d1:lL"rrninc..:o 1h:ll J1.:b11h<.ilaULl�.111 '.111·, l'" . :. ai.:u>llnl'> ,,f P.:itiO.OlJU \\t'rc ll1.:lli.:d 1.ttll·

.11.T111111h pa �·a hk. Whal 1:-. the tuwl a1m.11, .r .. : _ l!� 1 �nt :is�ets.,in Dt:c�mbcr � I. 20 I�..,

;1 I:<. '·•·10.IHiO -

:' I ! . :. ·I ( i ll(J()
I :-'. ..'.-l(J liUO
.i I 'J.O..JlJ.00()

• tad: son l'umpai1y rrovi<led the followinc sc!:.-:.!ul� hf liabilities on December 31. :.W 13:

:\•:cu1111ls p;1�1<.1:ill: ( ) , :)()() \1( ·I)

·;. ()(1(1 (Ii H)
: h.111� 11u1v pay;1hk I 0"·.,
li:111k 11.ffl' pay::lik 11"'•> '.IHHl 111,1•

ilill�l'l.'st pavabk I :;() I)(·. I

!Vhirl�il)!l.' :1ote 1a�·ahlt: · - I 0% . � . : )( !( } {)\")

· l�omls pavable -UJOU. ll(,. l
• •

111•.: j>'\,(l(J().000. 1011•11 llllll' 'NCIS ISSLl�d \Li"Li' ' ::!(1 1 .J. p.l)'dOh:• till Jt'l11Ulll!. lnlL"rL";I 1.»

p::vi1hk l'Vl'I'\ si\ llll:11lf 1s.

Ilic 1>1H."·ytar PS.000.!JOIJ. 1 1 % note \.\:1� i:i�1:� . .i::muary i5. ::'.013. On December 3 1 . ��(J01 · .
.

tlil.' l'nlity 1w�·n1ia1c.·d ii wrmen agreer: ·r:1.'.v,1i, :i�t bank to repla1.:t' the nntt· \·vi1h a �-\t·:i:.
.
•
·

l''.)_()()(). . )00. I O'Yu 1101-.· tu l'e i ...;.sueJ fa. · !.lr, · _ (1 I .t.

I k IO'!, l'll11rl!!;I!!•: n"lc \\a:-. 1ss1.1t'·i C>•.luhl.'1 i 21.1(). witi1 :1 'erlll l)I' ifl \cars. f erms 0,·lhi:
1,..;"· l:'"L' llk· holder the right to ,!::1i�:1i.! i:nl'i ·di�lle pay1m.nc it' !111? �'.ntity
foib tu mak-: �:
lll•llllhl\' inll'rl;'Sl pay111en1 within I'! lL�·.; I.' ,:. tile date r•1: :nent I'.. Jue·. On
Dtl.:l'lllbC'r .\;.
'U I'. ii� cn11t� i� llm:e !1h)lllhs b .� h i · · 11 r 1. . : • .;._ thl·.rn: ·''? ,·J i11k:e�,i ll.i\ nh::n
l

' I hL· homls payable i.m: 1c:11-year. 8"·o r1.,1n�i:-.. 1,-.;sut:d·.lunc.· .iU ... ...'.tJti:� l11tt:rest
1s P<l}:.lhi\''
' �;l'111ia1111uall) 011 .lunl' 30 ,111J lJecc·-.1!1 • ��

'What amou111 shuuld he ll:pl>rted as l\ '.:ti u:1·1. •. · ,.·,dilii:s ur1 U1.·..:enibei 3 !_ 20 I Y.'
,.
..
(l. I 5.6)0.000 ..
'··
'" l 1.ti)0.000 ..
1' 'l0.o50.000
d. 1.\.())0.000
 ·,\ · h · I a nct'° o I'
r>,aymowd ( · o mpa ny wa:-. 1ncorpora:c:d on lunuar: : . .:.' () 1,·' .,,,·it proceeus t"<lll1
·
thl! issu
· ·
. .
. .
.

operatwns.
P7.500.(l(J\1 i11 shan:s a11d b o r ro wed fund:> o� Pl.� 00.000. Uuring. the first yeu r of
expenses
revenu•: fiorr. sales and consul!ing amo u nted 10 !'820,000. and o perating. costs and
hl� to
totaled P640.000. On Uecember i 5. the entity clt-clared a P30.000 c ash dividend. paya
sharehold1:rs on January 1 5. 2014. No a<ldit i � n � activities a flected own1.:rs· equity in
::!0 11.
' uld h<:'
The li:1bilities inrreasc·d to P 1.200.000 by Del em be r J 1 . 20 1 3. What amount sho
reroned n-; lot<il asseis ;111 De cem be r 31. 20 ! .i'.'

a. X.850.0UU
h. 8.820.000
c. 7.870.0UO
d. 8.750.000

4. Ybe1h ( omp;.:ny had a note payable PS.l/00.IJIJ() d ue June 15. 20 l 4. The e1�tity signed :rn
Jgreem en t on Dccemh.:r l. 20 I J to bor row t:D tt PS.000.000 10 refinance the n ot e payable un .
.
a !onf.·ti::m bil':is v. ith no p ay men ts due until :'.•) 1 5. The ti n a nc ing agreement s tipul ut ed ·that
borroVvin� ma1 nu! l'.��cc:d 80:Vi, 01 the: valut' ul 1l1e cullatl..'r JI. At the: date of thl · issuance' uf
201 > lini1ncial statemrnts. the val111: o! the col!:1tera: \\a� P6.000.000 amt i:; not e:-..pt:clt'd tu •

fall lwlo'� thi:; arnoun1. 1)11 Dl..'c.:cmh<.:r -� I . 20 l : ; what amount of the note payahlt: should be
classi lied as ooncurrcnt?

iJ. ). (J(Jl t.01 )(I

h. ·UHJ(i.UOlJ
(, 20(1 ,IJ(l(J
d ()

.
.lerwin (\:imran:' prm 1dLd •the followinE se!-:?::'.� n account h nlanc es on Docc::mht:r :I I . ::!ll I�: • •

. . '• .
\. ·asli (i0.000
. 1 rading ir1\l..'stmc::nts. 1 ndud ing PJ00.1)Ut.J
• .
or .k;\..,tn {.'ompany·s sha res -W0.01)0
• '
J radl..' ;Jl.:�Olll ts f�Cl'i \ ahli: •
340 .. (lUU
lnvenrorie� 148.00Ci
Share Cc1pi1:.:1 :�.2·24.000
Retained ear�1ings ( -n
- -�1 .() 0() ) .

Whut is thL· 1:1lal amcun! ol'equit� on iJec·�·;1r.:r J !. 20D'>

•

a. 2.�:�.000
h. �.0(10.000
l:. 1.<>�4.000
d. I: 7()0.000

(,. I� 1chan1 Compan:,· r·:p.Jrh:J iJc! ;ucor:11: uf t'-:- ·• I (J.l1(J ;J lt>r the current year. The auditor �·aised
ouc;·sti•.1:1..; ab•Jut 1he f.·.1:1.wint! am()<mt.- 1ha1 h�,.J ht'en incl ud ed in net inc ome:

1 1nn:.:1; 1.o:J lo��; • .n ; ; ··ailaole fur ...ak :m'cSimellb 540.00U· l

tiain 1)<1 .:.srl. 1, · ! •. ,- 1·:1'1 1; t1011d� ;;;, · .:!-1·: 2.200.!JO()
Adju�lJllCnt 1Jf p:"l1lil :JI p11or )Car lur c:H"1 11:
.
.tq1rcci'1li\>t:. nd
.
.J:' p,\ df�cl
•

. ··=·
7 5(l.OU1� 1

Loss from I :1t' • ( 1.400.000 )

577t
. ···�
f� ·.��\·: . "": .. . �
..

•
 I '
.
\ ')<.
. . ,, "/\\ '

,.

, .
Loraine Compa ny proviJeJ the folll1win�· lll'l
. vi,,., 1
t !lurl.'s ,;,r llw curn:111 .11.·ar:, �
Net rcmea:;urement hlss 1.rn defined ht·n�·tit pl:ln l<HJ.lltll)
llnreal1zcd gain on .l\:11i:1blc for sak seu111li1.'· I .)()(I (l(ll}
Reda!>siti1.:i1i0r1 aJjustincnt li.H· g.um 1.•ii �ak .-1 :I\ ui 1.ib11.· :�1r snk S<:l!llri1ii::-­
ind:1dd 111 net in.:ullll.' :�so.ooo . .
,Shu1\.' \\an :1111s outsta11J111g. • -IOll .UtlO
•, • •
Nc1 .111.·li111: 7.700.()()()

. hat is the comprd1cnsi\'C income li.lr. tlK 1.·u1T1.·.111 ..\'C�tr

W .'

u. 8.bSOJlUU
b. 8.900.000
1.·. 8.•IS0.000
· d. 9.USU.000

� Clmstian C' o mpan � hul compn::hensiv1. in: m;11cc pl ·lic·; 1 .. 11d1 all(lv .. :-. its assets h� be
replaced at current v<1lm:. rlie pol ic y ha� P2S0.fttl0 deductibk �·lausL'. {>Ill' ul tht' V\:t1erl1\>nl
we::m.:hou�.cs was destt\"r·cd in a hailstor:n. I bi1�11.\l·ms occ1ir <1ppruxi11ia!d) C\'t'l) four years.
Tlw elllil\ inct 11T1.'d P ll )0.000 !Or disniantlt11c. 111.· 1•arehou:,1.· :111d plan� 10 reph11.·e ii. Th1.·
.
curr1.·111 c« .rrYlll!.! anl\Hilll nl the \\JrdH>U�l' 1•. I' I .5lJU.\HHJ and tlw rt:ph.11..t'll\1.·111 co:;1. is
1l' . l\l l"t ed ns a sq1arnlc Ullllplllll'rll or income
.
l'�.500.0\h) . Wl;at allllllllll or gain shnukl h<:'
l'llllll nrntinuin� opaali1111s'.'

;1. "·I 50.UUO

Ii. i.l)()l),1)()()
l. .i .650.tJUO • • ! •II•
11. (\

•J D u ring 2013. Jcrellee:1 Company, changed tr.: m FIFO 10 w eig hted a•;>!rag� method or
inwntmy v<1lu..1tion. Tlte FIFO invt!ntor� •H.� I' 7.100.UC>O •Jn .lanua,·;' I anJ P7.(J00.000,011
.
December 31: The av·.:rage inventory w;:i:, P7. .'0ll.UOO 011 .l.111uar:· 1 n:1d P8.JOO.OOIJ on
lkcember 31. The inc0me tax rate is �0°·o. i11 th;: 2013 income s1atement..v.h;11 amou111'
should be reported as g:1in or loss on the cunHll:i • 'e �·ni:ct ;1f 1ni·; ;.:hn·i�·-�·'.'

a. 600.0(J()
b. ·I00.0Ut)
c. -120.()(lt)
J. 1)

10 . .l anme ('ompan:.- prO\ided the follo\.-\111g ink'nn.ai0n p.::!1.1.ning :l) n:n:m1c earned b;
0perat1ng. segmenis !Or 1he current yei.U:

Se�menr Sail's t<> unaffiliated customen l111l'r-.c-�m<·111 sale� Total nvenue

:\I it:l' 5.000 ! ): i(l

_• .
8 .00()
lka 8.00(J , � 1 )\) 12.000 .
. '
.Claire 4.000 4.000
Uu11u ·U.OOU �-�-·�00 59 .ll\)0
Cnmhincc! 60.000 ..:.i.:JdO !U.iltlO •

i':limi11ation ( j_._.11J\J) \�,:..ouo)

l 0 ll l1 SOI iJate d � ==-=-�-�.:.=.
�..Y..rm11
l11 l'.0111iirrnity \-\ith the revcnut.• test. whrn b ll:L' l»t..i re,enul ·'1 lhe r ·11urt:ihlt.: .'�·!,!llll'lllS".'

a. 83.000
h' 71. ()()()
c ) I 000
d. (>(). ()()()

5771
 •

r J l. .:?01 J:
Ii 1\1u1:d111c l 'rn11pn11) provi11cd thC' follo.Nanti account halanc&::. nn fJcccmhc."
�.�w.oco
( '''" 111 hank
I 2 � .0011
( 11\h 1111 hllll(I •

< ':1�.h h";t1 ktnl li1r 11ddt1iu11 10 plmll t".l(J>CC} ed to hL' dis ht r�·d i11 �P J 4
1.600.0l>O
1 .i�.h 111 11w111·y n1;1rkl'I un:· •Ulll 750.0f10·
1 11·11:.u l\111 11 p111·rl1a:>ed N·1ve111her I. :�OIJ marnrin .lanuar) 31. 2014
•
3.500.0(10
ltl'll"llil) hill 1u;1d1a·.cd I> ...:L'1nr•t1I.201.i 111a1111111• , · : ..in.:li J1 . . �11 14 � 111 1� 1 0( O
. . I

·a�.h 111 ha11!.. indudcd 1'<>00.000 of rompl·ns:al111: t'l:tl;1m:e �;.;ain't sh·>rMcrm b•Jrro .... inl!"
<

arr:m�·1·1111·111 l'lw compe11-.atin!l hnlOtll'C j ., nor lc�t·'·� resfrictcd as to \.\tlhdraw;il. Whal

101111111111111111 'h111cld hi: reported a!'> cush :mll \.·a!'>h t..:d'Jl •. aknts on : lcccmher J I . 20 I 1" •
•

It, � Y! 'i. ooo

h. fl.II.,�. OOtJ
•

(1,1>.> '1,(1()1)
•

l.
d. X.(1.!�.0lhJ
•

• •
1 2. L1 n:11r;1 t ·11111pa11 1 t\•\·eulcJ the following inforrvat1«n l0i.1r �O L.
.
. •

/\ �·rn11111s rcn:ivnblc on Jn�1uary I 650.000

( ·n·dit :;ales :!. 700.00(J
\;ak�; rel llrll'> 75.oon
I·llffl·1·tilltl�; lr11111 •.11:,1n111t:r:, 1
-· I -()
) . O'J.
' ()
i\vrn1111h writtl·n ,,,r : 4o.01J1>
I· .1i111�llL'd lururc •;aJ�� n:t1i rns at year-end 50.00�
I '>li111t1ll·d t111rnlkc1ihle al'toun1s receivablt: at year eno pc:r a;ting I 10.000
·
1>11 lkn:111ho:r J I . 2U I J. wh<Jt i!'> the balt.111.:c ul .�1:01.111ts
re1.:ei\·able bl.'forc allowam:t: tor
d1111h11'1il acL··•lllll\ :md :11l1·want(.! for ·;ale::-. r··ttir•1s ·

"· I. 'OO.IHliJ
h. I. I:.? S.000 .. ! ••,.
l'. J .ll8�'.CJOO
ti
•

l):. ).000

J . ) . Nikki ('0111r:rny l�tl'IOl'l'd P·l.OC! 0.00() ·_,,. ;1...:l.'l•lll!I. 1.·:�:1\.thtl

' ,;11 .l·.tl� I . .:!ti!:\ Cu111rul \\;J;
�;11rrcmkrL•d b:'' lln: �111i1y l he la1..:tor i.1tceptc:J 111,:. '-ll•1111r.., tL'l<:l\�t
. hlc: suhjcct tll rcc:oursc li•r
l•l1llPil.\ llll'lll. J hv l:ttlor 1:-.scs:-.cJ 11 Ice ul 20,,, ;111' rl.:l;Jir1cJ .1 ih>lubac:k
. . \;,
-uuaJ 10• .•
.;u70 o.• . tht"
:1c<.:011111s rccc1v<Jb. Jc. In w.Jd ttton. the factor char�\ d I)% intcrr.:·.1 computed
on a \\ei •hted
;iwrn�!L' 111rn· lo 111 1 11 ·11y

Wl1111 ;1mo11n1
.
.
��
' . 30 days: !'he fair \,tlLc of !he
"

was 111111all1 rect'tvcJ from the fo1:ror"

recct!r.se obligation is l-'J20 0(J0. �
;1. J.5S0.685
h. 3.:1:;0.ouo
r .1JiltU>8'.'
d. .U'il0.000

14. !\ng.L'lo Company p rov id ed !he follo\.1,oing information at.nut accounts r�l.'ei'.able ,,11
IkCL'lllhLT .1 l. :'.O l.l
)O
d (1() di! IS \llllS(i.lllcJin:.! < i. Orn'. U< '" 'o lllH';,llt:ctibk
<> l I�() days outstauJinl! -l .5Uv.JUIJ 10% lll.Kol kdiOlt: . .
. ' ! .250.000 uncolb:tiblc
U.ver 120 days outstanding 5.0U0.00(1
s rec1�:-..ii1k and 1\�cmc:r,._.d P>oo.ooo
l.iurinl:( ]01�·. the cnt11�.. wrote off P71JO.OOU in <1u.1u11t
! . �()I>. r.h-= ;dlO\.\Ltil\.:L' h.lr lll1l.'ulkl'tihk
ll1al IJ;1d ht:en \\Ttcten off in prior years. vn .lallUi1::.
·
.000 Under the aging mdhlld. '-'·hat an:ud !l of u1Kvl
' - i1:c1ihk al.'1.:ou111:>
:11:c uunts ,... w; P:'00
\ L'.xpc11sL' should hL· reported for 201J'?
_,J
:1 2.000.000 •

\) I. 900.000
;ifi!lt'"·-·
·
l
:. . � 00. 000 ..
1,\.
•1• l OU.000 t::"'1""1.
 '\ I I.

l'agt.· ..,

1101t'. p11:ahk in
ti\l' a111111� t1
;. 1.J11.l1111e I. :'.011. Ricard(. Compun:· h>::n•:ti P.".1itll• 11:'\l llfl :i 1.:0u . .
deposil
14. Tilt' hnrr owt.' r ""�•:-. requin:.·d In
t'.1:>Inll11w11ts ol P 1.000.lH•O heginning .l<lllll.tr\ ; . . :I•
i11 t.'SL'l'l)\\ 1� [O IK'
j ·�·0.01 )() in a 111>11i111ere�.L-beuring C!><.:t'O\\ '· 111:1 rh\.! <.lllltllllll held
;;\..\.
1wnls lwve hcxn ma
e. lnterl.!sl nn �
c·:luriwd to 1he borrower 1f'tt'r all principc.il :•1tt. . i11t�· \:s! p11v1 he1rr1'.''-t'I
hcµ11111:11� Jul� I. :21)
I ; I Ii'-·
1'll' llllLC is p:ly'a···ll' Pll l'lt' firs! d:t\ l,f': !�·11 1,, .. ,, i1
ty rc:t'tVt'd
11H.H.k timely payments through Novembt•r I. :?.O I • On
Jnnuary I ::wl'fi.• tht.' �nti
· .

t'st due. Un Dl't't'l!1he

r .11. ]()IL ,...Jwr.
pa5·nll't1L of 1lw lirst prirn·ipal inswlh1'-·111 plw·�1JI 1:ik1
i:; 1111· :H.:crunl imnest recc1vable on 1i1" loan·.·

'" I )0.000
h 100.000
� . Sil .000
,! ()

l
· r 1101�· 1h;1! r�:quired Ii' L' equ;t
I <i. I JLm.·ncc: pui1:hased " f>�.l UU.IHIO. ,)" .. j, c-yea
('om pan',
l lllll'tl I ll_, iL·ld l)'!u. :\l lfll' JatL' lll
;tnnual yem-end payrn-:nh ut' P500.1JUO. I Ii·: tllll�· , :t Jiscl l
. .
\ lllll
purchase. tlw l.'nlil� n.:<.:llttkd 1he n ol c· ill .11�· 1•:• "111
':tllll' .ii' I' 1.t>..J8 . .:.(Hl lh.· l'lllil. did
''
t'lll'lll'd o\·1.·r till: !iii: lll this llt>lt.'
·-·let:! lite l'ai1 \ aluc upliu11. \Vhat is 111..· 1n1. I 111lv1 ,· , , IL'\·enue

.t. :'O·L:'OO
il. 55u.UOO

I
l'. X00.000
d. l)()!).()00

I' ( 111 l>n:cmhT I. �01.1. .'; i u l l0t•ll1pa11_1 !.!.!ll' ·it•· 11'-'I l'llllt}· :t 1'�.0()tJ.(l(J(J. 1:!011
111:1�1 I lt1.·
hk lu;tll
··ntil�; p;1id pl'OCt'L'lb 11!' ''1.040.IJOU .tt't1.1 til• ..!« .. dL'llUll ul .I h10.lH1() llOLll'L'l'u11da
u�·ig.i11alilln k�. l'ri111.:iµal am! interest ,1:": JJI•: 111• :,i,'<lJ mu111hfy i11stallmt.·n1s vi ('.f·L50ll.
hn•11:11111;� .!11111<111· I �Cl!l f'11t l'c'j':l.'dl1.llh ' � I 111 dl\:,1i1,1· 111(1.'l'L"•l r:lll' n!' '-�''u :II"
·
"' .

1
prc�c111 1·;tiL.1- '1: P.2.(J(J(J_tl(JIJ illld J_" :% .11 .1 1''"·•·111.\.iluv ul l'l.1J..Jll.lllltl. \.\' 1:11 llllllltllll
• .

'>ll«tdd he r<!rorted ;1s acrrued inten•..;: r'l:n·i' :ilifr•,,11 I kc1.·rnlkr : I. "l() I)'.''.'
.1 -1-1.SOO
h. :�I .(>ll3
:! I J. l)(l()
" I <J ..JOO
•

:
I '. n December :28. 20 I J. 1\h 111 Cll111p.111\ 1;u1cli.1·.,·. . . ,J!'.. vo"·'l lllI"•' l>"lllJ (l(l(l 1·111.' 1l'l'll1S \\.t' I\'
·
> � . • .

..
.

f' .0. I ' - .uC.

.
I ,frnation . Son'IL' of' the: l'.O!'il!-. i1.- !ll 1'\.•.I 111 t • ll)J)l'L'lll>ll \\ tlh till' "'
'

"'If. .
C '111 (i J L· Il \ CI\ (� I •

1.
J s v.l·re pat:,.;ag11 l� lor shipment l'IU.t11:u. ·lupp111,, l'l, ouo ·ind SJJ l l·.1
·
...I 1l:' !!lll>
.t I. i.1m1·1·ing • .

�
.

,·li.. irgcs 1'25 IJOO. fhese �.iods were l'L'cei\"·,i • "- l ' " -"·mbt'r 1'1 . ·1� I ,l, (.)'I) . II
. t'C1.'lll111..' I' 11
• .. • 1(1 I ' · · - ·

·" I l:l! 101:1 I <.:u:a f.nr lllL''ie µ,H>ds should lw jp, ·lt1d<' .. I 1 lil\'C:Jtlun · •

.i '-l '\.llOO
'I
i.'\.000
:·',

) �\).()()()
"it!IJ.()()(J

h. 1 >11.Janu�1ry I. 2013. ljeorµe <.'ompall\ •;11:•wc :•·ii·:·''-'-\. t111., non1 .tlll'.l'. l.tl�lr, JHtrt•li:tsl' l'lllllfit•:t.
., .
•

wlt1<.:h alltJv.·; llit· l'lltit\. , , , .n�1rd1;i.,L· •11i t. I '<l 1, I J t , I I , : ('. t ii : , ' (It 11 pl I [ L' I 1 I rl ..i111111 '
. 1 • .t 11 � :11 I I I tJ;J •

pi..r <tl!'l ,,nd ),!l11tr<111tl'C.- !'i .it i111111n111111 '"JI

i LI • l)l;Jl 11:. " ' " I 11 ()\Jl•' lll I
�J � I) l ll lll/� .w I_,_ rhv jlill I
·
- I

.
•
.

UllL'Xf1C:L'h"Jly hecanlL· uh·okt:? 'I h1.· l"l1lit· j 1'" I •11() l 11 JI, .

I 1 ItI',, Ill\ l. l l ( l ll ' \' I Ill I ll'l'l'lllh:r
. ... I 1

._) I _,_and
', . '< ,
helJl.'Vl'.d tl1t··1.· r·1rts ' C'lll T ll. ' . l ll . : . . l) j>Cr 11nit \,\'I
11' ru1 j.l'l . ..
1:11 :1111uu111 ul j,,,:--
.• . I • .

:. in1 ! hl' p11n:has1..· L'o111111i11m:n1 shuuld rc::i1, I •.·I

•

c I... 11 :·•

2.-H>O.OOO
I' 2.000,000
I .(100.000
-. �;. (, ( )().000

5771
 .�l .
•.
!IS
·
•

•
• .
,
j
Pugc 6
•

�j
1
j· i
: ti Connie f>2:00<�. ·r�'IC
. .
( \'mpai1\
suld .uans ,-1.·ith 1'2.:2Cil fi.1i1 ,· 1lt1l' and l':1rryi11µ arn ou nt of
cnlrl\' \1bti.lined an optinn Ill p un: h: is�· ·.rn1il 1r lt>itliS and 11ss111111.:d :r f'Cl'<Hrrsc nhlrgutwrr w
:
repun:h;lsr lo:·ms. The fr.ir values ar:- lis1�·d.
'�
PL ·
Ca.�h proceeds :.uoo f -.
Int �rest ratt' sw<tp 140 r.
Call opt ion 80 �:·
Rl''-'lllll'S1.' 11hli�1<1::un 1:2 ())
�

I. \\'hat is the io..i ! t r , L1�: 1 \·I� tlK· sak'. •

••
a. :r�o
•
I 1114
b. 200
•

c. (I 00)
J. 1211 ,

.�. l ht' ioum:tl t.'lllr) \ll ll'\.'.\lt'd lht' tr�:itslcr \)Jl 1h1· l1�h.li-.s uf ( 'unnil' Co111pUll)' irn.:luJc!)
a. A dd.i110 1..all or•tion
b. !\ ..:rtciit 10 inten:s1 rme swap
c. A ddin . ,, luan:-:
d. r\ cr1:di1 to ..::ish

a�rc:c:c! to scr .'il:l! th� luans v.·ithuut c.xplh.:itly �lating thl·

l. /\s�Ullh:' thct1 ( 'ttnnit· ( 'on1p11ny
c.:umpcnsalit;n. The fair va l ue or 1he scrv1c1: is PS{i. . Whal arc the ne t prncccJ:; and the guin
(lo)ss) ''11 lk sale. respectively?
• 1. -1 . .?l);l :rnd 21Hl
11. ? .! 'll and �.;;o
•

c .�. I ·;o arn.1 I :'O

d . .'.2.lU and 12:'\Jl

. .
• I
('�·ntr:il warehouse I lcld by consignees
lkginning i11\ ,'nt1;r_v : . I ll0.000 120.000
•
·Purchases ·L8CHi.OOO 600.000 •

F rl'ighl in I 00.000
TrJnsportat iun t°ll cun� 1 g.net:s 50.0fJ()
Fn:igllt 1Hll lt)ll.IJt)() 8U.00()
Ending i11wn11if)' 1.450.000 20C1.000

What is tht: l'li',t ui sale� !'or th·: currenl.� 1.ur·.'

a. -L:".l0.000
h. ..J. 8)0.tll)(I
'
l . :'. U 7o. Oo!i
d . ). I �ll.()i�C

.,., ,:\i". j1, C P!npan) :·v:urJl'd p u rc hase s :ll t.!l'l•�.s «1JH.n111t hut decided tu c.:hang.e to n:cf lrding
pud:has,., net 1:1 r11i-,:hase disc�nmF; Drsl'o11ms ci�·atlablt: on .run:hases rccordc::d from

l ),·roner ;r-:pt�1nber 30 . .'.014 iota l.'d P2U.OUO. Uf !his amount. P2.000 is still.
I. �o i .1 ru

;\\'Hilabk in th::;•. 'll'.i'•t:, V'.'"1bft'. !'lte Oi.ll'111L't· In liW :K.l.Ollll!S as or and for the year cmkd
•

Sepll'l11l •t'r 1r . 1 . l't•lH't'!."l lll 1 <'I ...

·
..
·
! ••:•
1.000.<>00
' Purchusl!s
·
1.00f'l
Purchase t1i: .. '.•:.i1:1 ; l.i ;,:,
1 01J . O(J U
. ·
Accoun!:; �':i "·ab:··
· .. t.;
.,
_._,.,_ n""n-.11..h ·t� '"' ··
'i"<.tlllll'S .,.�bk un Sqitl'tnber JO. 201..J'.'
1,., ·. . .
\�ihat ar.1�·!!:·: S·•· ,: i'.C.1
• ·
' ·

a. 298.t)(:U
h. 2'.l�_()\)'.I
l. �88.0()(J _./,
ll. 2x::i.ooo 5771'.
 ..

_:- :. _ . ..mun.),) t .L"'Tl.1.5- ��u...-� ·� :- '1.J.\\l ;..1,,\S .f.llh)� hcr 1.'l\l ll\ \Vhid1 ha s aµ reed to
"'�\.\.: ,· , t�w

�CJl\.-.r� �� m:':-e rro,Ju.."Ul'ltl �t t� pr'('' :�fo:� n i:-.rkcl pri1.'t' R1.'1.'1.'l\t ieg1slati1.m �1ssured r h;J l
. /'
U')t nl.':!n;.et �"'< "'!U •� bil OclQ\\ �":. 1 fl<"l � l h Jurin� tlw ,\�XI ' " ' i � 1?ms. li1.· cnsl � 0.1 �
::db.."¥ ::mJ J�Ntu t. � b..- ,,�...._,..., .w�.' ,�1�-. . . . .- '. 1 , ;Hhi 1.· ;rn he.' l'\';1 :-('11,1 h l : l..' S t 1 ma11:d. I h1.:
>:: nU��· �"I':� it� l!\\��,·� � <'��� I: ' , , -� � . - :'.i ifll\;.! �ti l -:. . lh<.' 1.·111 i 1 : s1.,ld :1. 11 �1 d e l i n:red
Hw 1.'n t i t ;.- so l d 1lw r1.•m;1111rn µ
; ,; �h: ��- -«'-"i\)0 lii\., .; �� lht' n�t� ?'tl\'\' , J O.OO O
- ,, ·

l
� \"'-� .!m� �\.:. a.t the- lwi.tt l�'(' ,,t f "� \\ 1'.' l . '1H)\tlll ,, f \'C' \ l'IHlf sf\\ll4 i d IW re<.:O)!ll l't•d
i� �! ��� • '· •
•
-. =-�'-l\8'.�
•
·:- - . :.ssu..uoo
:-.�\_\A,,I
.J_ �.bl'V.l'-.'l.l

,h:.:n.u :- ...'\.l ;l pc-rpclu •l invcnlo Q· systt.•m r1.· : 1.m l.'1.

l
g_ Ouri� the '--um:nl ��- tt � Coolpan� ...

me tUUo�i� !.ru�t"-'n p.:nal1U1lg \t) lb i.n ':'"'i � . •

t ·nit �OSI T1.•tall cost l ln i ts on h a n d

l'ait$
Babn...� � ' ' l lU..\l0t) t "' ' l ,l)00.000 1 0. 0 00
?�+�J �� , .- �CklU t\_) i . S00.000 1 6.000
�..�J <t!�' � /�\> - t}."':..;) 7.000
:'un.� \ '15 "-"'� . ' ltJ � .OOOJ)llO I I .000

_; 300.0-.1'J
..._ -�-'>l"•J) :it>
••
! •I t•

�' \fi�I C�� pn'lt!:l\.� mill... for -S tlc.' tt'I !,'>.:JI and nmi�)nal i..:c:: ..:r�am producds. Th :
::nI:t� b.=-g:ID �''°° ,-. i Jan�· L �l) L� h'.\ ;'ur,· h.ising b:\tl milk Ct'WS for P8 .00ll.000 I h�
�tit� h.:d l!le fo:k...\\i� nl�'muti,)11•.l,-�i !.��1_. --� ' · .u-end reiJtrng. to th� cu'� s:
I
-\\.'qUlSlUOO CUS:. far,uar '. _ �ll l � � . 000. 0liO
...-b:�< in ::ii r '.i;cc Ju-c �..'\ �:U\\lh :1nJ on.:� .::�1 . .:..::­ �.:\Ul)JJUt l •

lX\::� in 131� ·• :J.iu< Jt.1:� t\> 1\:1&\� 2 )( )_(JlJ•)

Mii� t\:ln �:il� ;Junn;! 2· ' i 3 hut n<1t '.\ �: �"'i .HJ() _()\JI)
\\�t �')Ufll -.) :' �n 'n ·h.u1�'<' in t�.r
... d�.:
\ .. �: ,\uiJ � rect�gmzl.'d for hiolt)g ical :lsset 1 11
:!Ot :·?
\_ : .54.iO.t'-',)0
t-. ::�S.Q.000
.. ::.900.000
j 2.650.000

>- Franci5':o Cvm�y �,- :sl� ai y�ar�.� .u� in· ,. •:,,.� it<-m ''ith historica
l cost P l �oo ocf o . . _

�inutcJ �lli!1� pri.:-c: P L:W.lltll:_ >'•::.::';.'.: - .'ltnt'k!1t'ln .\I'd

selim!! cost P l 50.0()(il_
�loc�n�n ros.t P i . h .11 •.!JOla ::ulJ lll':- n:.! . . '" i: :1:.i:')!i;
. 1 P..+Vtl.t)(k}_ What anh)un t sll{lldd r�
r'CIJ'."'"'-....i 35 'aii.r.: ul � n\ �l\t.)f'\ 1t�1 _, "'·-! -:i
- . . .
� i . 1 00.000 . '

b. l . i �.C\IO
..:_ 1 2\.'10.000
d .· l _>OO.C>OO

·· 225 .C)O•>
d.. � 5 .000

5771
 i. .
.
....

l.
..

Page: 8 .

:'.�. Un Oeci:mbcr J l . 2 0 1 1 . . '\rid ( 1nnp�11 y iin;vid�< h-: :(1!1o�i 11g inform ation :
'
Cost. Rttai l

LU I 5.000 .
lim.:nton . l nnuar y I .
7 .1 '.i .UUO
• !
4 . 1 65.000 5.•775.UOO
Pun:luts\!S
:? I 0.000
1\dd1t irn1al 111ark11ps
Under the
Snks lix i hc year 101:1lc:J P S - 500.00'l 1Vlarkd >wns amoun!ed to P I00.000.
.un
11ppr11xim. 1tc lowrr of :wer��r cost or �narkr r:-tai! m<!lhod. what is the i nvensol)
I kl:l'mhcr _ ; I . 2tl i . \" '
.' I
! • I
•
•

;1 . l .:' ·10,000
b. I . ..JU0.000
c: l .078.000
d. ll80.000

29'. l
An!!da Cnrnpan�· rcponcd on L)ecc•11t--e : � . :>.O : :; a \. a i lal->k for sale ti n:m c i :t l '!ssel ul
1'.1.700.000 tis nont:UIT·�lll a:;sc1 ;:nd unrci:li.4-:: d us� lll a> i.li!abk for sak linarn.:ial :s��·t ,,J
P300.000 under sharc; h,llders · equity. T�1c � 1�ti1y o:iid transact ion cost of P I 00.000 �luted t(I
the acq u i :: i t i o 1 1 �,r 1'11: ;nvestmer.t. This :-i�1.w1•, "'as caQi:aliz�d ss cost of the in\'estment.
Whal w1s the historical cost ol rhc :i v l.l i l n h k hr ; '.l i e fin'1�cial asset'?
I
;i UlHJ.000
h. 'i .·l l)( l , ( )()()
1: . ; 900. oon
•

d. U
, JOO. ! 1(�U

...
it i ) r 1 ri 1 1 g 2· l Li . . l u l \ : 1 1 1 (
I
: m : o.'.\ll\ t'l'li.! :;t: '}•lo) .. �. - 1·-:� ,-.f J j l \ C'mpmh · s I OO.OO{) \Httstandin�
:-;Iiams and j
t>.000 shcir1.::; u 1 i.. c:anc:: L \1l1liJa 1 ) . :. J�lJ.UOli. outsiaaJio� lY?to:s. During th1.: � 1:.11.
the L'1 1 l 1 t y reci:1 v1.:·d P :l - 10.llvO cash d i ,· id1:1� J ;'roo11 Jill. P l �. . coo �ash dividend und :\0 ·o sici-. I
. .
d i vidend frurn I x a m : . T he closing pr 1:·d \)I ' 1: 1 $hart! is P 1 50. What amount sho11:d hw
reported a!> d i 1· iJenJ re 1·t>nue for 2�1 1 3 '.'
'
j
I
a. 34 2.Q(){)
b. 1 1 5 00 J
. .

\:. 442.000
d. 1 5.000

.1 1 . On .lamury I . 20 I J. Re•:(� C omr::in� :1..:�� u : ret� a .:.>(;% int.:-r1.�st in an im· est� 111 u 1.'us\ ,11
1 '3.2!J0.000. The equity o f llle ii1;.'t"Stei: •li:; t:•c: d :1c: L)I .·cquis:tion was Po.l)00.000. 1.'1.) ns1s\ i n 11
of P4.000.000 share capi tal e n d P2.000/i�<l t i"•:l::intJ earni ngs. A l l the identifolblt' :is.st•ts :m�t
Jiuh i l i t i c:; of the im·es1·.: e v.·en.: r ::1x1 r;.lel� ;11 i!Ji;· 1i·.r:: except l�'r an equipml:'nt 1\ ilh :1 1:1ir , .llllc..'
of PJ .OOU.00() g.n::ater than ca�rying am�'+!. -�,·�
remainin g useful l i te uf tht'.equipmem is 5
1
.:
I

years 01, ; .feccm!">er � ! . 20 1 3 . R ::\·t! 1_ O fi1 :

x m· · ha� invc:: mvry costm� P 2.UOO.uoo on ijund.

,,. i. icli h:td bt'cn i •un: 1:ts1:J fi 1)1 1 1 ::11: : . . 1 �·;Je\.' \ p;wit ,if P600.U tlll lud Pl't'n made on lhl'
sak. i_:· u ' l l ll.! l h L- 1:ur! -11 1 '. o:ur the i r· 1 t:�h: '..' . p1.lrli..'•I n:· 1 ' ncomi..· 1'! P-Ulll\l.lltlll nnd P<•id
d i , · i d l:nc.i 1 , r 1 > 1 . :: nO. O i l ( t . : ne q u ; t '. ·,f 11,... 1: -'"! - � 1• n 0t'o:.-ml->t'1 .i l . �0 1 ; "h11 �ed :;!l :u'\:
·
cnpital l ', 1 .000.00(). ,.,_ • :tint.::! t:1rnings l':<.�lttl.U• �J. re��1in�d i..· �rnin g.s :tpp1'•pri:1ted ll l .Ot11�00\1 ,
a nd reval uat ii •n 0 1 ;; � h · � P :'.000.00C T1 1'3 f-:>v<1li :iriu n surp!t:s Jrose frt'm :1 n.·,·alu1uion od:md . ...

111ad e 0 1 1 D• ". r; 1 l1 r''".1 •

I - ·1 (l l � Tl·",
· · · . . re•ai·�::,!
1
·• ';.'.• rn :nl.'.�· ,ippr1•Ni:�H."d <ll\'Sl' fwm n tr:m:-;f(fr <)f
- •
• •
' I

·" '.. c 1 i , ·, t 1: 1111

t.- "'"\. ... .,.. \. •-
•\ j h: -1 '.
ti'; .. �u n. in� a1m'Wlt of tht' :m cs1m�nt in nssociat�
LllH:1pp ropna t1.:(! 1 ... .., . ;. ,. .1· i� •'
• _ •
• · · •
l
Oil Dl'Ct'lll Ol'i' 3 : . :.:u I ; " i
a. 3 .200.0()fJ
I
I
I

h. 3.690.00f'
c: 4.1 90.000 '
I • - ,,
l\ . .l.590.00ll !
I
· 5V71
• I
 \· �
. • \ · \l\ \\\ . \"I 1·1N
I .

·l"'
·.�

�t
.
,,. -

,.
;
'
·
\ ' ' )n la1l11:1r: ' I . 2 0 1 \ . .l 1 ·n-:.o 1 1
Compan � 1 1 u , � !i . .:' I I '" . 1 1 r 1 ..: J . 11rnpa11) , 1 1 uhr. .111d inµ .,
.
�
1 � r 11l\u Y shares rm
\>4 .0,Jll.LIUO. Jenson i� tht: lat f! �)l �;1�1g!c ·.i1c11 chokkr i 1 1 l.ca a11J Jen:
wn";
. .
:�
r�
o f.
•

o J l \tn-r:. arc a 1naiorit v , .r 111come

·
Lc<t . br.ard , •r< 1 Ill' :- jir�.::
\ 11 , . ·-;tee repMlcd nl· t *
\;.
,.
;
l' S.llOO. tlOO f1 1r 20 1 1 a id pait.l d i vidend� •.1! 1 • 1 .:- 1 .11 i ( II''\ ( •n i:•..: ·. l'lllOer :i I . 20 I . � . what ammml • 1:

:.hm1ld lw r�ponc d as investm ent i n Lea ( ompam• ' · �'

•

·� •

\. 4 50 0 .000 ,.
.
- '
''· ·I .. I :'llHlll\l •,
.
.. . •l .000.0llll
J. � .8)0.0\)0
.
' ' Un .l:11111ar � I . 20 1 .1 . F run7. Com pan� b: >1 ds '' i i h a facl: :lllllllllll 11f l'..J.000.(JOO
µur-.:lt.is.:d , , :·o
li1r \»i . 7 )(1.000 w yield 1 0%. lite bonds ;ire dati:: l .la1:u•1:"·. i . 20 1 3 . 11 1al Ltrl· 1111 lJe1.:e111b
er J I .

�02'.� : 1 1 1d pay 1 1 11\:rl'St :1nnuall y 011 Decl·1nb _

..:: ; ; . 1 1 :· 1 . 1 lercst metlwd or amorl ! t 111g hond
t l isL'1 1u111 i:: usl'd. Whal amount should bl• reported as interest revenm.: from the bond
11\\'l'Slllll'lll liir 2 0 1 ·1'1

;\ . - lllll.lll )' )
Ii. ; I� .<1tl1.I
I . H1ll.llU\J
d \77. l <i: l
L. . •
' ••=•
\.1 . ·"' till' heµ inning. or tlw
I current j
year. Karlo,Corn ,any purchased for f'S.400.000. induding
appraise1. . � kl' 1)f PSO.liOO. a warehuw,l'. huitdtn ! and the Lrnd on wh1d1 1 1 i s hli.:uled. I he •
land h:1s a curn:nt appr: 1ised vuluc 1 , r P 2.UOO.OO: :111 d t he �ui l d in g P .\ .000.0llO. l he ori g i n:tl
c11sl llll tlw s1.:llcr · s hool, 1s I' I AUO.IJ�IU t . . r tlw l:t:1d :u1d f'2 . !i01J .UIJO hir the h 1 1 i l d i 111:'. Wha� is
1lw i 1 1 i 1 ia l 1 11cas\1n·111L'lll 1 11 tht: bnd'.'

a. .! . I ·I ll.000
h. I .XOO.llOU
,. . .' .<llHl.tlOll
d. 2. 1 otl.tl()O

: -.. . h111..·s1tl l \1111p:111) :a:1n�d cu11suuc1o1un l ' I b·.u l d i 1 1g un .1anu:.r} I . "2(.' l '\ . :ind moved i n tc1 thl·
t'1nislwd IH1ildi11µ on .l u l v I . 2 0 1 4 . or th� 1'2:' . t 1 I JIJ 1)00 tu: .. I ,; usl. P:.'l1.00l).01Jli v. as incum:d
111 .'1 1 1 ; ,.• <' I l l� 1 h n >u�l111u1 the �·..:a1 . f' lt,· •:lll!l\ , ! 1 1.:re 1 1 1L· : 1 :. 1 1 1 11 1rni·., i111!
. t <•!t: �•a:; 1 2% .:ind
°
th1..• lotal .111Hn111t 111' i 1 1 1 e re-; 1 i 1 11.:urr1:d •.>. ::� l' l .1 ..> t 1 . 1 l i H l :1; ::• 1 1 .1 . Wh.11 alll11t'l1! should he
1 t•p11rt1..·d a:; cupita l i 1.t•d i n terest on LJccl'mher ·; I . · ·o I )'.1

a. I . ti ) l). I)(\()
h. 1 . 200.o)(l(l
,
.. I . 'tlll.• 1011 . .

'll . � .·I00.1 l()() . ' ..

'o. l idi:1111 w . l · 11_1 1 1 pan y takes a ful l � e< r J·�rn.:�· .ll 'L>I� 11� : k· '. <.:ar . i ! · ;1� q11i�:i1ion '
! ! · and 110 •

�L'pn-r1at11111 I l l l h<: � · l':tr or displ>Siti on. I lata r,· l;1 ir1: · ; 1 1 a o'.c i"0;c·1.: iahl·· 1 ,�:.:1 U l l Dci.:�mbc:
: r 3 1.
_ 0 1 2 :trL
' _CL):' I' I . I 00'.UtlO. residual v a ltk' P211\ l.\lJlJ . .1:•1;111·. 1 i . : :b.! de1 : 1 . -c i ,, . 1 , 1 n P 72U.UOU anJ
11sl' 1 1 1 I l 1 k :'I ) '· ar s . I I v as�t·t \\a:> acqu1rc:: d - i 1 1 l u i . 1 ·. . l ·
. l 'sin·! ' o1·· · . u : r n.: cleprct: i a t i �>n
11\l'thod 111 .�0 1 0 . 2 0 1 1 :ind 20 1 2 . .,.,·hat a1!1ul1111 . - 1 li: p r � 1.: i <H " '� · .h.uld -1 • · rt:l
t > i • f.: .. 1 111 2 0 1:::. 1
•
. ·

.I. I .�ll.OU\l
. b. 1 80.0lll) •

l' .
��· .
2.�ll.\)UO
,\. 2 ·l!l.000

57.7 1
 ;Page 1· 0 •

!·
400.000
I \1\\ n I\'(\' t\lt'Hl
N11\\' l'" "l'k 111 .� \·1111:11 11111111:11 mstu�ltnt'llt"
1 :200. op p
�\),\It�' 1'hli1 mi·" shmt·s " ith u par vulut" of P2� n i 1 1 l 1t1ir vnlu.:. o f P40 per share
800 .00 0

was i n curred . The machin e has au 1

l'r\1w h' t h\' rnu..:hill\'" ' . 1sc, 1nst11lh1 tio11 1'11St of l' �lJ.000
\"S\illl:\l\'\l t�siliu:\l \ :\hi\' 111' I' I Oll.000. What i� tlw ini1ial CllSt or !he muc'1ine')

.. \\'\l\l \)\Ill
. . • U:•
t-. :.,400.llOl)
'" : ,1>:-11 \l\lt)
Ii. :. .... �\).\}\){)

-��- /.\ ri111' l \lmp:m� l'llt\'t\tls\·d f1.>r P-i.so1 J.LIO!· ; • :act <•f land as a facwry siw. An exisiing
1'>1uld111� 1111 th.- p1\11wr 1 y wns mzeJ and cons1n1 �tiL'll \Vas hei.;un on u new fa<;tory building�
Ill<- emit� i111·1m1.·d tht" t�1lk1win� costs:

l\\."t ,1f m!it1� 1.>ld huikli n�. net of proceeds t rn n· sal vaged materials 300.000
l'itle i11s11r:11wt· und lt-�:11 th·s to purchase lt!r.d �00.000
.-\1\:hit1.'\'l kt' 950.000
N1.•w builJ ing ,·1111stru1.'liun .:ost 8,000.000

\\'h.11 is !hi." 1·1•st M bu.ldrng. in acc0rdanv• \. itb Pk' lnterpruation �

·' · •> .: :>l>.OVO
•

" · ,>,.1::-0.1100
1' . �.·>)\l.000
d. 1>. 1 51'.(lt)(l
.
.
.
.''•\. .I on ( '•'mpan� acquire, . ' •
I equipment on Jnnllarv 1 . M l 2 for P 5 .000.000. The equipment had a
•

lt'.11-\ear 1 1�1."ful l iti.- :111dln0 residual valut•. l ln I •�cemh<:"r :; I . 2(1 1 3 . the following inforn
1:lt ion
' m: 1.) t'>rnined r1."g:m.lini; i 1he t!quipmen t· • •
• • I 4 • •

Expt'<.'11."d 1·al ut' of und1s�ounted cash nows 4.500.000

Fuir \':1h1�· esti rn:ued with in-use valuation premise 3,700.000
F:iir vulu�' t'Sl imated w i th in-exchange valuation premise 3.500.000
•

Whut is the :unount of imp:.1irmenc loss ; hat sho1 Id be reported in 20 1 3 ')

<\. 51)0.000
h. ·HlU.ULHl
�:. 300.000
d. ()

-W. liulik1.> l \)tnpsny had equipmem with curr) i 1g amount o l P4.5' 10.000 1)n Decemhe� � I .
20 1 3
Ex p<.'ctec: dis..:ounlt'd i1el .:ash tlo w s 4.000.000
F:lir v:llllt.'. as:mmin� � i rn i lar o t h er asse: 4 ,15 0. 00 0
Fair ' alue. :is:;um i nµ the :.1�set is St>ld st:rnci -alwe 4 . 28 0 . 00 0

\\. h111 1 s tht" irnpuirme111 loss that should be r�po.1ea i n ·20 l 3 '.' . . � ,,,.
·, ..
:t. �00.\ 100
b. 3 50.l JOtl
I'. 2.�0.! 100
d. 0
E \J D

_,,
577 1
. .

. '�
 CPA REV I E W SCHOuL c JI H E P H I LI PP I N E S
tvl a n 1 I . 1

PIZ,\L '· �-ICAL ACCOUN T I N G I - PREW E E :< LEf"'Tff'R E VAUX �N�• VALIX r t: RR E R

I. L i lian V ideo sells one anct t wo-year n"l n i l order s u b ;criptions fur v i d �o of the month busine�
:s.
�aks
Subscri ptions are collected in advance 0:-inci cred i t e d .to sales. An analysis of the recorded
<n.:ti v 1t y revea led the foliow ing:

20 1 3
•

20 1 2
.no.ooo 500.000
'i a ks
20.000 30.000
Can1.:e lat i o n:;
:'.) ubscriptions e x p i ra11011:
20 1 : � 1 20.000
1 5 ) .000 1 .:w .000
20 I . l
I :::! 5 .000 200.000
20 I t i
1 4 0.000
20 1 :;

On D\!n:mber J I . 20 1 3 . what is t ht• uncun·:,I c;ub:)1. 1 1 p r 1011 revenul:'"

.I -�'J."l . O U O
i>. -1 ·1 0.000
. '
, 465.000
i..: .

d . 340.0UO

., diargeJ a dc:r•o!;it
M ar;lt:: y Com pany s e l l s it� products i n re:'1::..1 bk '· " ' t . ; 1 1 11:r: .. T h � c ustu111c:r i s
w i t h i n 1wo yeai:s
Ji.11 c.:: u ch c u 11taint:r dd i vereJ and receiv�·s a rl:'t'und I • 1r each containc:r returned

: t l t·.:r t h e year 1 1 f' dt: l i very. r h e c: nt i t y �I C \ ' u l > l l l � ' u r i l l . � u 1 1 l a i n c r'> 110! n:l u 1 nt:d \.\. i t h i n !he l i t1 ll'

C" n: i i rL·d hy .suk al ! he Jcpu , 1 1 · 1 · 1

! 1 1 1 1 i r as hc:in•• • •
h J l l l 1 l . l 1 1 1 unnn1i,Jn lur 10 1 .l is as
•
f o l l ows:
•

<. ·ontuim:r <lcposi ts on IJecxmht:r J I . 20 1 2 l mm ci�· I 1 " crit's i n :

I 50.00< :
•

• 10 I I .
w
: 12 -U O.OUP S8U.000
l k posits ll>r contai1 1c:rs d�li vcrcd in 10 I 3 78 0 . UO O
IJepo s i t s for t:onrai11ers reiurnctl in 20 1 .1 l ro r n d�i i n:1 t'-'' 111

-�CJ I I uo.oou
:!O 1 2 ..'! 50.00U
:�o I J 2 8 <>.0.YJ l 626.UUU

< >n l kcL•tn lK'I' J I . :�O I J . v. l ial :u 1 10 u n 1 .·.I JC>uld b,· rvp1 •rll:d a.-; l 1 . 1 h i l i 1y l(ir d�pusits n 1 1 I L'lunwhk
;01 1 l : J l l l l'I :;'.'
.. .
.,,.
LI . '494.00U
ll. S084.UOO
_. 674 .000
.l. 7.14.000

l k l 1biL· ( '0 1 1 1 p : i n y s e l l s app: i a ncv Sl'I V i c -: .·u1 1 1 1-;1i..: 1 · : ' . · , .' l i l t t n 1 .-p: 1 1 1 a p p l it1lli..: l':-, li.ir a t\\ll-\ L',tr
. •
•

;lL'rtod . T ht: pnsl cx p1.'.ricm:1· is t l w t , l l l ' r ! 1c l l 1 l • 1 i . 1 1 1 i . 1 , 1 1 sp-:111 l o r rq>airs u 1 1 servi � c i.:o n t r;tcts.
l l )'!l1 is i 1 H.:11rrt'd c:VL't1ly during lhc f i rst co1 r.11:! :,11 ·a1 . 1 w l 1)()'!111 n 1.· 1 d �· d uring t h 1.· st:c.:oml ..:ont ni,· t
, va r . l<cc.:c.:ipl� l hrn 1 servil e c o 1 11r:11.:1 ·;ak : •.• r ' 1 1 J : .111d 2 U I ; ; 1 rL' f > "') ( ) ( J , ( )1)1) :111d 1 '600.IJtJ()
1 1::. p ci..: 1 i vc l y . l<..c.:cc.:. i p r s li-0 1 1 1 L·1>11!rac.:1s me.: \ J"L· d 1 kd 1 1 1 • • ll';trnnl ."· r \ 1 c t: .... l > J J l 1«1..:t l'L.'Vt'll llt'. A l l s� i k s
; 1 1" l' rn a d t: even l y d u r i l l g t i l l ' year. Wlt:tt · 1 1 1 1 1 1 1 1 1 1 1 · d 1 rn ; l d bl· J\!port 1..· d a-. l l llL'ltrnt:d ::; c r v k e nrn l i a � I
n · , < · 1 1 1 1 v on Dct.:1..' 1 1 1 1 11.:r . l 1 . :21 l l .l '.'

;1 1<10.00()
' '· .i ·1 0.oou
,. 480.(JUO i,
d. (> I0.000

'5772
. ' . .
•
 .
.
Pa.ge 2
· l . iYE1ch�ll Company rtpon.:d onyroll tor !:-,e monin t·mfrd .lonua��· 3 1 as fi.1l lows:

. r ot::il wag.cs 1 .000.000 }. .'

1 20.0C-O
Income tax withheld . �· ;.
'·
r. ·.. · ·
.\II wages paid wnv .�tnj.:-ct 10 SSS. Tlw ':��: t:". 1:111 � w:1s 1°·o ...: u ch
for employe e and t!mploy:
stateme:nt) t or
The entity remi ts µ:.yw ! I t!IXl'S on the 1 5 ),, ul me I.): lowing month. In the financial
th� month C'ndC'd Janu�1": .l I . what :imo:.m! �hou!d be reported respective ly as 'total
puyroll tax
• •

liability and as p:iynill t;�x expense?

a. I 2Ll.OCO :111d I · l tl.1 1 l!J

h 1 90.11!10 :11 1.! l ·ll•J l 1 0 .,
;v
( . 1 1>0,!lUO and 70.L'''O
. '
·d
. 260.000 and 70.0 00

5. Jjvdle Cumpuny records stamp sei1·ice. r.:: "cr·ue ;mJ provide,-; rur the cost of redemption.; in tl'i�
year sta:nps Hrl' sold to 1iccnsec,;. Th.: pa., t e\;.wn :net: indicutcs thlll only 80% of the stamps sold
•
lo license.:� w i l l be redn:med The l i a b i l itY for st:.1110 r�Jenrntinns was P6.000.000 011 Jariu<U"� l ..
20 l.l . Adu nioi1al 111for111utio11 fur 20 U i � ;,, ti ii h11 1 .;:'
•
· Stamr ��-!n• 1i.:1.· revenue from s1:1mns sold"ro li;..'l::n � er.s 4.Q00.000 •

Cos t of n:ckmptions fo1 stamps s� lu pril�r to .inm;:ir::i- I . 20 1 3 2. 750.000

.
I f a l l tlil.'. Sl<:mps -;old in �0 1 .; were rr;!Sl'lllt·d fnr ·edemption in 2 0 1 4. the redemption cos! would
lw 1'2.150.000. Whal 111nou111 should be 1-.:poned 1s estimatt'J iiability on December 3 1 . 20J 3 ?
.1. 7.� )0.000
h. 5.500.000
c. 5.050.00ll
d. 3.250.000

l>. Kyk ( '0111panv trnrr-ti. rr�d reul �·state pursuant Ill a debt restrul· turing i n ful l liquidution lrl'
liabi l i t v .

l ':in yi 11i:; .1111va!1l 01 l 1 .1 . •il1t)' liyuiJi.u:.J · l .500.000

(':irryin�'. : 1muunt of rC'::.i c�tUtc:! tr,msfem.:d J . 000 .0 00
Fair v;1lue o f n:.i! e,;ink trnns lerred 1 .:wo.000

What prl!lnx gain s ho u l d he reportetl as cnmp0m· 1: ;-if inclltll� from continuing opemtions"'
•

a. 300.0llO
b. .'iOO.LlOO
l'. '.ll0.000
d. u

7 A1vy ( \1111pany had !h·.: fol lo" inµ lo'"t�Herm rl ..hl:

B\)nds 111a1uring in :n:-.? · 1 : 1 :�:1.1H.;. "C:C\1red h"v mn..:i : n•?r,· l.M0.000

Bond s mt1turinl! r.n 1 '"\'k dnte. s�ct.:r�ct hv re:if·�· l .81)0.000
C'ollaternl cru.-.. . �11r>u. 2.0tl0.000
What is the t.1't•'1 :m .�111 1 1 1 (ll. deb�nfllrl! honds'.'
a. �.oon 000
h. I ,I 1U<) 0011
l'. uwo 01:0
d. (!
. '

a..:crued i ntere�t 4.000 uf ')%., P l .000

S. Un M.!i ch I . t� l j ; ;; .·:.u � ·omp.'.•IY is�u�J �II ; t:_) ulus
_

. !.l)J _; mattm.· �Hl .lanuar) l . 2023 . lnteresl

foe.: value bonds. 1 ht: :'onJ:. the d.!teJ
· .lan111:r: and
0 b�v ' paid bond issu1.' cost of P�00.000.
is pa�':thli' ser'!i iannua ! I Y 00 Jununr v I a11d The entit\
·
Wha t is lhc n�t cash 1 1.·.:;:ivea ii om lhe :'l.1nd i:· su.m• l''!

a. ·Li20.0i.l0
b.
· l. l S0.00tl
r. ,. .
4 . 1 20. 000 '
, I
•

ll. i .' l � O OJO

5772
.
.

I
. '
i
,/
I

( ' 1 ntly t \m1pu nv

).'.rn11t� all l."m p h1)l't's l W • > \\ l'. " ' ,1f pttid \ ltl'nllt• n for eiw h fuli. �":ir
,1f .
..
' . lllplu � lllt'lll. l l n u sc d "'" \tm� �"t'-trs.
•

;1111111 1i1m.· cnt1 I' : :l\·,·11m1 · l.1tt'd uml ..:mncJ h1rnul'\�tu SUl'((<' . :
<"1d w1 I I ht· paid nt
l ht• snlnril'S in <.'lfrcl \\'\w11 \ �,11it111s .1rt' 11\ktn M when cm1\l �
. )ymtn1 is
l1.' rn1111 :1h.:d. I hl' l t' was I , ,
i·111pl1>yt•t• 1111 , i w r 111 • •11 1 1 . l\dd iti11nul inti.mm\l ion rdn lll\� In •h� •

)'t' �ll' l'IHk tl I h't'l' lllli\'I' \ 1

. �lJ I .I i:; US l•lllQ\\ S .
•

l . iubilit �· ll'w lll't' llllHllnll·,1 varn1i 1111s on .l.11·11.1 ' l . . Pl i

1
l'n•-20 1 .\ ucn1wd vu1.·a111•11s 111k1.·n fron1 .l:1urn1::, I . 'lll \ h' S1.• ph:!llh\"r \(l, :�ll l _;
(the au1horiz,·d 1wri11, I tor vncuti un� ) :!OU.Orn•
•
Yacnt ions cnrnc d for work in �O 1 3 ndiust;d �)tl.001'
111 �111 H•nt rutt'
.
�
flit' c111i1y vrn1111. d a 1 0'!,. snlurv incren�. .: r,, 11ll 1·1:11•h1 ·el.'s \\H Ot·tohcr I . � 0 1 .\ . the unmutl :mlur�
i 11crt·ase dull.:. What a111rn1nt sh � uld bl.' rq>t'l'lt:d ('� • a,·atiun pu� ,·xpcns..: for 10 1 >'�

:1. 4 50.000
,, .n s.noo
l'. I I 5,000
ti. Hl0.11()()

1 l l . 1 , , rncl t '0111pu11y anw11dcll i t s pensiuu plu11 .iu .1�11nur� 1 . 10 I :"> .

It :fon· 11mt•nd mt•111 Afll'r 11111t•mht1t•11 I

. \n·111111li111l:d l1,·1 1di1 11l>la �atil)ll •1-\0.Ullll I .·I � :-- ,Ull\l

l'r?jeeted brnetit ohlt�ntion • 1 .100.000 1 .<>00.0llll

Whal is 1lie pas\ si:rvi..:e ' ust .as a result 01 1hc anw 1d1m·m"

a l)) 0.000
h. 600.000
..: . 4 75 .000
d. l 2 S.OOO

1 I . 1 1 1 1 September 1 . 20 l .1. I•. iara Cumpunv ot krc,I � · ,., 1.11 11·n11111.11i11n hl·11t·t"1ts II• t•mpll>\' l'1.'" " lh'

la:id rl.:ached the early n:1in.:mc11t :11-tc.- : h1· l•m1111.1i1u11 hl'll\.'l.llS ,·\l11s1stl•d \If l11111p-�11m .uhl '
·
pc·riodii: future puyml·nt•. i\dditionnlly. 1�11· l'l :lpli •\l'•::. 11t.:cepl111!:! th1.· l.>lfr1 n..'l't' i H·d tlK 11su;1l
l.'.. U'ly rctin:llll!llt pc11siu11 bt:nelits. nic () ' :l'r c :-. i lll l.'d \Ill Non:111l:>c:r .\0. 20 1 3 I nfortllllthHI .l'll
l ) cccmber 1 1. �O l J is as 101lows:

• L11mp-su111 paymc11ts 1111;1li11g 1'4 I s.01, ,, d" 1 1 1 ° ,k .ltlllllUI'\ I . �o I ·I I

• Periodic puynwnh ul l'<iO.Ol J O a1111u:1l 1� h1r ll 11 i:e � cur:. " i l l b,·�111 Junuur� I . .:!ll 1 .-\ . • l1ht"•
pr,·scnl " a l uc 011 lkl·•·rnbi:r J l . 201 ] ,i i. tho.- . ' 11 .ncl\b ''''!'> I' 1 5 :\ .(IOLI t
• R1:duc11u11 ol a1.·i:n11::d p<::nsiun costs "" Uc,'t"! 1-t-r J I . 20 i � lt•r tlw t t' rm 1 11t11 i n � t'lllph)ytll'S
.

W'1!-> P45.0l10. i
.
I

. \ .
i
,I <l 7'\.0()()
I
h. s x : dJUu
•

!
I
l. -<1.Hl.OOO
d. •
<>)S.000 '

1 2 . lkrnatklli: C 'omµany hu<l a noncontrib11\1r� ,k 1i1 .nl oendit p rns i l 11 1 plnn. On Det.:l'llll'n· ; :.
20 1 3 . lhe entity n::ceivcd the projected benefit ,1l�li!! 11io11 repon from till' ind�·J'endt·nt �1\·tunry
paid
l'�nsion bt:ndits I . \ �.OllO
1'110 on December .l I . 20 I ) 2. I h0.0l){)
l nh:n.:st t: x pt:11sc l �ll.\}t)ll
I >isc1nm1 rail:
�� �
Whci1 is thc curn•nt Sl'rvio:e cost for 20 1 3
.I. (i7 ) .000
h. 8 1 0.000
C. 540.000
d. 255 .000

.:; I .•,.,
"' .. ..
••
t '" '
 .. ,...
.

'
1 3 . Reys i e Company rrovid�d t he follow i ng 0i!'formal Oil for the �· urrenl yc:ar:
�ov.ouo ·'
Current serv ice .:: ost
w;o.ouo I
Actual return o n p!an as sets
600.0CJO f.
Interest on PB()
J'iO.CJOO .....
Interest income 0n plan assets '!'
2'i6.ooo
L.o!.s on plan settlement
r

1 ()(). (JI)(}
?.
.

Past service cost during t he year

200, (JIJ{J
Actuarial loss during tlw year
•

I . ."iOIJ.IJ(JO
Contribution to the plan

Wh<it 1:. tlw to ta l define( bc11c:I!! 1x>�. : • • • •114

a� 1 .300.000
b. 1 .000.000
c. 1 . I 00.000
d. 1 .600.GvO
.
: 4. On January 1 . 20 I 3. Ar1drea Co m pan y leased hu !ding 10 a lessee under an op�rnting lcJsc I ur .
.
ten years at P5.000.00C per year. payable the lirst da) of ..:ach lease year. The lcssu1� puid
P 1 .500.000 to a real t'Si<tlc broker as a tinder 1;·" · The huddi11g is dcpn:ciatec.l P 1 .200.UOO per
year. The l essor ir.cu1Ted 11J!.urance .rnd pr-:ipeny ax expense totaling P900.000 for 20 I .I . Whal .
�
. .
is the net rent in..:ome fo? 20 1 3 ?
U. 2.750.000
b. 2.900.000
I: . 3 .500.000
cl . 3 .650.000 /

I 5. On Januar) I . 2 0 1 3 . Er,1ielyn Company leased l and and building from an un re l ated lessor !Ur
a ten- y ear term . The lea�:c hns a renewal option fo · an acidit iorial ten year!:, but the h:ssec ha�: 11c1t

reoched a decision witl1 reµam to the renew11I )rt1on In �· arly January of 201 1 . "till' lc�w1:
•

complett:c.l improvements 011 the prcperty -;ompn•; iii; sa)l'S o lfo.:l' P4 70.000"w i t h l i fe or I () yi:ars.'
warehouse P750.000 wi1h l i te o f 2 5 vears. ai'lcl rn ·k�rit! l'.>t P 1 80.000 w i t h life of I 5 year<;. What
1s the c.lt>pret:iation ol le:i"ehold improvements li,:· ·� I J 1 3"

a .. 7 0 .00 0
b. 89.00ll
c. 1 22.000
d. 1 40.000

1 6. fayson C o mpa ny kasec.l 1m:d1ine on fan:..i"a ry I. :m 1 3 with the fol l ow i ng info rma t i o n :

Annual re n ta l payab1e at the beginning of each i�il>e year 40IJ.OOO

Lease term I() years
Useful l i fe ol m;.id1i n°: I :! years
Implicit i n l � ri::;, :ate: 1 4%
P V of ttn a1111L1:t/ of I in adva:H.:e for I 0 p eri od !: a: I 4%
•
5 . 95
f>V of I !Or I 0 periods d' 1 4% 0.27

l'JK· �·uttt)' ha� the 1 1pt• . . 1 1 k· purchase l!:e mnch ne on January I . 2023 by pay i n g PS00.UOO·
w h ich approxi1;u: u·3 ;11e fair \'itlue ol tlir 11'.11°11i1
1t' o n optilln e:-.ercisc date. Whal ;,mot1nt

·;hould I ii.: r·:cogn i zeJ i n i 1 1 a l l � �-. . . �c 1� c li;;i-. i ! i t \ :

•
. . ! •1:4
.'.l .• 2.5 1 5,000
b. 2J 80.000
..: .1.245,000
..1. \1

.
.
S772
� - :
,l ·...

'
..
j
�� ,\I\: ''iltl\'I\\ ' '·" ,·n,\ ' " " " \ .11:11• 1 1 1 \ 1 · • 1 1 1 h. I 1 1 1 · 1. l a 1 · 11 · 1 1li11I I · l1iiil 1 ,�,i:1 1 l1!11".
i l l 1:! l f11Jc:r ti
.

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"i �'' '''''"' l h. k.1:...,,1 ,,�,\ \ '"" ' " ' 1 :. 1 11 1 , 1 . 1 11 1 ) , \\' • , , . i 1:1 �i.1ll
ii , �"'' ' ' r.111 •l 11 t l'..'.,0t J!1,UlJlJ.
r l Wll� l'IHllJ.OIJO itllll
' \\'K,' ti\\\\: ,,, t h� l'llt\.' h,1:-;\', '"" ll\'\'lllll\lh111•1I 111· 1 11 �· 111111111 \ I l l d 1 1 "'ll"�;r 11�:.
J� 1�11\;\1\\11� t\1h1111.'\' ,, th� ,
I'''
l\'lls(' hal1iliii " · '' 1 • , ; 1 11 1 1 · 1 11 1 1 1 1 1 h•11wd ,,�,,l'I WW• p111l·h111.\!ll
pun.ihm11!'! '
m\\1111111 Ill ilt•!11\l'1l 11). ''''" ' . · t 1h1· ll Ul\' : 1 1 1 1 • 1 v 1 111 1 1 1 1 : t111111 " '
t'l ,-''4\1,\\\.'I\\ \';wh . \\ ""'

.\, \ .3-4\\, ,\'ll.'I\'

.\ l .-'-4\\,�1\\.\
,, . l .�t'l\).\\\,'11,) ,
,
\. �.t�'IO,\'•('(I

I S . \\t1l('t\�' l \11111xm\ k.1s,·,\ \'i1 uipHl\'l\I 111 ,1 I , .,, .. .'ll I 1 1 1 1 1 1111 l'IJd•l · YL..'111' r.ic::r lod
111 .!111111.11.. ' •

'-'�'11 1 1\� \ ),.'\'\'llllX'I' ' I . �11:\ 1 l · qu;1I 11n 1 1 1 11•1 \I" 1 1111\\•1 1 i11 · 1.- 1 .1• orr l1"11JO,I Hl!J 111HI ,,,.� dm·. on
•

.l;1mi.1r\ I ,· t 1.';\d \ �nu . lw l H �l l\l�Jllt'lll " " ' tn . . . 1.· 1111 1111111. 1 1 .1 1 . .1 1 1 1
I l'lw 'il''!"'I!
p11cc 1.il lhc:
'-'l.l\liµm 'l\I 1 � \> '.\l\\l\.\\\lt\ tllhl l ht' ,·,11·1'' 111� . 1 1 1 1 1 • 1 111 i•. 1 · ' . Vlll>,1J(H1. I 1 1�· kwa: is 11µpropnu lc l y
h'I' ,,, n s.1k . " I''' kuw 1 111 1 , 1 1 •.• · 1 1 , , 1 1111· 1 1 1 1 l i 1 kw••
. \,'\'\'\tnl\'\I pi 1 y 1 11c11t:1 111 .111 11np l 11 .: l l
·
111\C'l\':>t r.•k· ,,f I .�'\, 1:-- I' . . :�11,,•thl \\'hu1 " 1 h, I " • '' " 1 •11 tlw .. ii. l i ir .'• · 1 1"

.\. ��\,\'11,°)\I
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. '

1 •) �\11 fammr� I . .\II,\ . . k1 .•1111.1h \ \11111 ':111� .,,, l.i ,1 · ; •.t, 'i 1 1 w II · .tn• · l l l l ' r 1• 1 t l l l y 1i11· l ' l . ( J(JO,OO!i. I hi.:.
.
t':ti1 \ ah11.1the ,\a\\' \it' �ak \\,\:. 1 · .: . :>lJ\1. 1 11 .. 1 l j11 1 t 1 1 1 1 · l i 1 t11· 1111. I 11 1 ai ry 1 1 1 µ, ;111Hi11111 111
\'II
•

N,\\l,�),(11,'I\\ l\1\\1 rt'l\l:lllllt\� l i lt- ,,f I ll \'�It!'. nw 1'1t1i1v i111111c1li.1tdv 11•11:.cd h111.:k t i t � lllHl:llint: :w
.It\ amm:1l l'\'lll;1I ,1t' , . ;,1,111 11 for 1�111r 1 r.- .1r:·
1 · 1 wu� d ,· 1 1· rn i i 1 1 1· d th111 tlw 11111111111 rl!ntal i:;
�utll.:iC'ntl� '''"X'r ,·,•mpat'l.'\1 11• th\' 11111rk1·1 1\·111 1•t' .1 ,j111ih11 : 1. , .. .· 1 . \Vh11t i• tlw li 1lal 11 1 1 1uu 1 I I�• he '
.. �\.'\'�lll.l.\.\.\ tw thl" 1.'11\111. 11\ p1\1lil 11r l1'S' 1 . 11 't• I :

:\ I .O Nl.Ol'\\l

!. ·' I O,\}t)l\
.:. I �:' .t't)\l
. I. {1\l,\)\lt\

'
l. l{.._,�t· t -'mi:xm� �p\1rll'd l'l>.lJll\l ,Oll1l i11"1111� li1·1111\' p1·nvi.- 1 0 : 1 lur im:uinc tux. Tht: l'o l lu\.\'ing
,\at:i :m.• l'l\ 1V i,kd I�'' 1�,, <'11 1'1\'111 ' 1·:11

RI.'al t'\'\.'t' t 1 \'\I in a,ln111 'l' 1 ,600,(10()

ln,·1.111w fr>m ''\('1111'' 11�11111\·ipnl h\111ds 2 .000.(10()
l"-'P�\'Hllt,111 ,kdu,·tt1•n l\,r i11�·11111e 111x :111r p1'�''' 11 t.:\l.'t'SS 111' dcpn·l' iurion
1'\'l'"1wd h•r ri11:11 11·1:1l rq'<'rt i1w p11n•11:.1" 1 .000.(100
F:;11111.11,·d (,I\ I' ·" II\\ I l l lilt 1' 111'\l'lll \ 1·.11 )( )() .d 111
: " ' •ts•
�n:i1:1t"J ,-,,rp..1rate inl.'l..'1\le 1ax mte 30%
\V hnt amount l)f rnm:111 111\'tlllK' ta:\ l i ab i l 1 1 � sh1•11l .t t i ,· rcpun�o.! i111 L>r:i.:cmber 1 1 . 20 I 3?
:1. US0.000
h. 2. 2�l ). Lll ll l
.; .SS\1.011\l
J. .;.�SO.llllll

:· i R.i-iud l \,11�pa111. dc.>d:11\·d .111d d1s1rib11tl.' 1I I U" ,, st. ,,1; d i \' idcnd wnlt 1
fui1 val uc u I' P I ,500,000 and • 1
I �
_vah1t'. 01 P 1 .llOl).1lOll :111d 2 :'i " u sh1.:k ,111· idrnd ,1 1 l h 1:tir ,·:tlrn
, of 1'4.000.tJ O(J and par value of, ..
.
P.1 .:>00.000 . \\·_ 11:11 :t��, ,�µat'' :1111011111 slt1iult1 b. ,khitcd t i > 1 1·1ai1wcl .J
earn i n g s for the stock
,Ii v iJ\·11Js'.' .�
j.
;\, 4500.\l(}\)
b. 1.soo.ello
c. �.Wll.L\tltl
J. s .:.uo.til>O

5.7 72,
' I
 .
, _ .. . ... .-----�-���
.
. . .. _

.I
I •

Page 6 ..
)1 hancis Company had 300.000 shares outstnndin):' on Ja:1uary I . 20 1 3 .

January 31 Declared IQOt., :;toc:k ; \'ldcnds . •.

June 30 Purchased I 00 . 000 shares

August Reissued 50.000 shart's
Novcmbtr 3 0 Declared 2 for I sto1:� :.plit

On Del·embcr .: I. 2 0 1 3 . how many ordi11:1ry '>h:11\ � arc outstanding?

a. 560.0CO
b. 600.000
c. 630.000
d. 660.000

'i. t._ii1dk C\ ·m pany rcpor cd the followinF ..: h 1 1 d-,: o,,1e•< ...:q uit� •.,;1 January t · 20 1 3 : ..
• �
Share cap it al . P 1 0 par. outs anding 225.003 share�· •
2.250.000
900.000
Shure premi um
2. 1 90.000
Retained earnings
.
During. the 1:urrl!nt year. the entity had tho: lvliow ng .;hare tr:rnsactions:

Acquired 6.000 treasury shares for P270.(1Q{\

. . Sold 3.600 treasury shares at P50 a share.

ai P4 1 per s hare
Sold the remaining treasury shares .
· W hat is the tot al amount of share p remi u m o� Dece � ber 3 1 . 20 1 3?
a. 89 I .6(10
b. 870.0(10
·'
c. 908 .4t10
d. 9n.6<10

-
2� Ezra Compan y provided the following data for t he �·ear ended December 3 1 . 2013:
.. ' Rt.!taint>d t•arnings unappropriated . Janu�ry I
Ovadepn:c iation of' 20 1 2 due to prior period err · i;·
200.000
1 00.000
"'· N e t inco111c for 2 0 I :;
�·
R\·W 111cd (arnir �s ap;x« pnat<.:d for t:w1�u; j 1 1:�1 , .. 1 L' l lt! •llcl! !'.t; .!ilCI.' i .; !->,'i OO.Ot)(1
1 .30(1.000
-
.
• but red u ced by P 200 000 by re aso n of reisstuin::t of ttie trea <> ury' shA\�s)
Re tained t!arn ings appr.ipriated for conti ngencib (bt>ginning h.Jance P700.000.
} 00.000

but incn::ast:d by current aprro pr i ..uio;i l•f I- � !h. . iJ IJUl 800.000

Cash dividends p:iid to �harchcldd� 500.000

I.
Change in accounting policy from F't FO to i: ve · a ,!i.: - cr�dit ac!1 ustment 1 50.uOO
What is the balance of onapprcpriated rrtam d cami1�gs o:i December 3 1 . 20 ! ) )'
a. 1 . 1 5 0. 0 00
b. 1 .3 5 0.000

Ij
i:. 1 .950.000
d. 1 .750.000

25. Carmina Company had i ncurred heavy losst's s n· :c inception. The board o t' d i rectors voted to
implement a q u as i - reorganization . The entity rt r
orted t he �o!lov.ing sha reholders' equirv
. on
j.
Decembe1 J I . :20 1 3 : ,
S harc cap i t a l . P I 00 par, 5 00.000 share;> 50.000.0{)0 •

5.000 000
Share p rem i um
Retain ed earnings r delicil )
I .
.
� .
l 8 . 00 000)
: . ,
on Lir:.:�n.bcr J I . �O ! .> tu be :t.:t.:\)!ll� l i she�t
quasi-rl' •'il'g!1mJ. 1on
Thr:: shareho lders ap!Jr<ived the-
. j
•

.
i ir:.r\rt>p crt) . plant and c4u1pm en t y.+.000. 0UO,
by red uc t i on in inventory !12 .0 00 .0 00 ri!d,t.�t ,i
writeo ff of goodw i l l p 1 .0 00. 0 00 3nd ap!Jrop
n� t�· :.1a,1 ustm cnt '•' the �h:m: premiu m tirst :in ? :iny
.
•

rema in ing Jefici t agair st the share capiLa '

:·1! 1 1np!�mcnt 'he: 4ua�1- 1eorgarnza110n. wh:u 1s Lite
I ' • •

i;eduction in the share ca p irnl?

•

a. I 0.000.000 '
b. 1 5.000,000 l

·I
c 20.000, 000
• <I 1
. 3 .000.000
5772

. \
 .

..c'!!l.. ����� __;;!'�· ..

l
_,.

r
;f

..

Page 7

·')o January ·· e
· JO i 3 ·'1co. C �m pan} �b:.:d i-.c: 1 rc,1dc:nt compensator) st_uck options tc �•Y
·
•

� &.()()(} shariC i 0-f p. IO par ' aluc. The o

· •

I
•t
; .r• ...
uucc Yc!ars f'- 'lo
pt!Ons q,I! for •J,nr ice ot P20 per �hare and are e.1terc1sa�le
. l
\.\ tng he �rant dat� lh.: prr:>!� ::.H e:1.en.:1s d t he opuons on De:em .... �� l
. "
d
v
�I> !: ;. 1� n
· ·
. :·
�
.
. • •

t
'·

..arkc:t pnc: e 1.· l tht share '¥as ?5•1 un 1,m·J�I)' l . .d

•

J I J and P70 ?n Dece� ber ., 1 . •

I
ll.H·} The fair �aluc_of a similar
share opt1on was ��F. on the gran t date What 1s the net mcre*5C
·

;
.o �«kn equity
as a result of the g·am ::.nu . .r:rcise oftht: �hart: options'?
i;_ 300.000
• 100.00()
�- 200.000
.i 280.000

27 I>0:l30 Compwly
provided 1 he following Sil.are 1rnr.s:i : ti o ns for the current yc:ar.

;�
-·-' Shares 0utstanding 4-1.000
;- � issued for cash 56.000
\lay Acquir�d treasury shart� 25.000
.-" !.;gust 25''� .ih>..:k dtvdend
��bcr f Resold treasury shar�� 10.000
'tovcmba I Issued ; for I share sp! : !

',\f12t b the ... eigr:ed ,,11c:r.1�.: 11umbcr •Jf .•h .J i c ·

a. )(J.).000
n. •307.500
C. 1()3.75()
d. 31U50

2&. f'aulo C:ompan)> nad l .2t•O.OOU ordtnJry .. har.!:. ul!lSt3nding or. Januar� I and December )I .
�f>!3. In connection "";th the 3cqaisitior. "' 3 ,.:1'"1.;i.1r� 1n fon..: 20 1 2 . the entily·is required• to
�sue 50.(J()() additional ordmary share 5 011 July i . : O 1 4 to the fom1er owners of t he subsidil\l'y .
T'.'le cruity paid P200.(J(){J prt:ierence Jiv'.u�nd .n . ' J L\ and re p orted nel inrnme of P:l.400.<jOo
f<,: the )ear. W hat amoun1 sho ul d be rc:;x.n.:: d as d ; 1 1 1\c:a earnings per share for 2 0 1 3 ?

.. 2.83
b. '!.72
.; 2.67 . .

(!, 2.56

29 Sylon Company had 500.uOO ordinary ,h�r :- i��uc.i 1 1hl out�tanJing. lHl hnuar� I . 201 J . Du1:111g
2!-,I ) . no adcirional ordin;1ry shan:s v.-:-�e . ;:J •:,1 • , nnuury I . 2 0 ! 1. the entity issued 40\l.UOO
:-cllllC-i:mulati·. � anJ nonco 1vertible prefer.·11l'c· .-;;:1 1 · · . Dunn!,! .:10 I 3. the cntity declnred Jllld p:1iJ
�00.i)()(J ..:ca:.h di� idend 0.1 the orJinar� , h .:: ::, :.11.1 I' 1 I U.lJUU arnnial Ji\ lden�t on the prett:1er..:e . .

::.i'�. � income for 20 1 3 was P75U.G0t · Wh:it :mQunt should be reponed us basic eami1;gs
�;1;r snare· •

a. I .SS
i: 'r.60
1 .23
..!. lr50

Jl:J JOseph Campany providec the followin! ir.::·mn:;:il' , ;in December .3 1 . 20 I 3:

. .

f'-d'crcnce � capital. f' I 00 par. 8% '.'00.00ll:

• ntir..aty share capital. P I uO par 1 . 1 oo.oou;
k :$tined earnings 4bU.0(1�
! �easut} Of"dinary shar� - 1 .000 shares ?.! 1:os; I '.\0,000
(
,., :.,..c prcfcn:rx:e
shares art cumulative an.i .:: iv;d.: 1111:-. are in o:mcars for two years. What is 1hc
rx4 �a-tue p-:r ordinary share? •·

,_ L'�
I:,. J9:
IH
14 \
.. ' •II•
 .. - �·""' . ... .

J
'"

Page 8 ·

3 1 .kn11y ,·om0:11:y provi<l..:d the li.>l low:•l!? i n 1(yrm&111:in for �he year:
! 90.000
·\CCIJlllli ·: l'Cl'l' i vablc. .la1 ' llal) i
...�·
2. 1 00.000
from customers
•

c• ,'olb:t ions
.' 380.000
,, . Shareholder� · i:qui t y . Januar:v I
750.000
� lot;il asst:t: . . .lai1ua1') I
880.000
rot.Ii as si: t: .. IJccembcr :. :
360.000
/\ccounts rcceiv<1 bk . Uen:mber ·3 1
390.000
1 · ('ilul lbbilitie->. '.l1·ccint ·:r J 1

What is the net i:tcur;ie t':ir the cum:n, yeFir'.'

.1. 490.0Utl
b. 1 50.00(1
l'. 1 1 O.OOll
d. 70.000

: .., \1anz Co1r:pa1w r.:iiti P .. �.000 to renew ; ,., n n 1 • nsl!;·;inc� p·:i'.iC) for :hree �cars on· M:m:h ! .
201 1 . the elfoctr v e dJk: "f t h ·.- p<ilic)'. On \fon:n · �}O i::. the unadjusted tri:.tl balam:e shc \ved a ·
l\1l:rn ce o r P3.UOO for J'repaid mst •rrtnct ::i·ill p·12.li O O for i n surarn:c expense. What am oun ts
should bl.' ;·qiorrcd re�pectivel) fN prer-nid : n 5L:7 Jnc� :•nd i n surance expense in the liEanci:iJ •

st;Jlemcnts for the three mo nths ended March 3 l . :iG 1 3 '? .

.

a. 70.00C ancl 3.000

b. 70.000 and 5.00tl
.:: . n.ooo an d 3 .000
.j . 7J.llUO und 2.000

JJ. Arturo Company rt'po11d ihe following H!"nrl:;!<:jc'"• I nr cpa id expense on December 3 1 , 20 I J :
•
An opening oal� · ,,·l· ,; c- � 50.0GO fo� ' !1:· r1:: ; 1 . "' r:omprehc:isive i nsurance rot icy. The enticy
had paid an :m1 1H<.d p . ..:r.1i ..irn of P>00. t!(11 , c.:1 .lt.ly I . 2 0 I } .
• /\ P.1 20.000 .mni·;d i •:;t1ranc:: prem iu m p ay men t made J u l y I . 20 1 3 .
• A P200.tl0l; .1d •an· o: 1 ental payment f�) , _; w::irehousi;> r:1e en ti ty leased for one year
beginning Ja:iuary I . 20 1 4.
On Oecemh� • -' 1. �O i 3. ·,vha! amount sh ou ld b� re Jorted as p re p a i d expenses?
•
,I

b.
520.QQ(J
360.000
-
.;. 200.00t t
d. 1 60.00U •• � •t:•

-�·i. U nd er Kinglet· Cornpa11y · s :::counting �ystem. -. 11 msuran1.:e premiums pa i d are de bi ted to

prep11id insurance. For i 1 1rerirn tinan.cial ri::port:.. · 1e ·::n t i ty makes monihly estimated chat"'�S tv
insurC'.nce expense wiil1 .-redit to prepid insuran ce. c-.

Prep:iio.1 in�ur:n1..:e on Ja111 1ar; I . ?O ! :; 2 1 0.000 •

Clw1 �!e . to insurance e�·! '•'nse Jtiring �O ! . � l y·: or-' ,.; adjustment P35.000) 875. 1)00
Prej.l.t id 1:1�mance ou De.::�mDer 3 l , 20 I > 245.0ijO

What wll� the ins1 1rn1h.:e r're•niun� pa;d dl!ring : O i ·:;

.1. <J I 0.000
b. 875.000
V• 840.000
d. (>65.000

:-. s. On februar" I ·:1!' 'hL .;1 1rrent ,1·e1r. Migud b·�'i!:11� n se r v i ce proprietorship v. ith an initi;d cash
investm�nl ·nf ri 2cv.uv(1 The proprieitirship r.-c•:ided PS00.000 of se rv ice in February aml
recei ved ti.ill ; : :. , ,·1 1·�11; : ," f,.Jarcii. T:i.; prno;· tc'\ ; :·s! · p in..:urred expenses of P300.UOO in F ebruary
wh ich wen· p. t'c' 111 ..\p1 ! . Dw ir.g M;11cl1• �·!i!!'.t.:! drew P I OO.OlJO against the c a p i ta l ;\CCll�1n1. In
- ·
the pr.1 p ri e ,�r<.;l : i f!. :: fria 1ci=-tl 5-:lillem•�nt� ;(); 1:,:· t· • , , rn o n t h s ;: 1d>!J Marl·h 3 l preparelr lllhkr th�·
•
cash bas is of a' ;(;uiaci ni�. wh1! 'llTiOlmt siv:iu.l<l h·.: r��vwe J a� 1..ap1ta1
. '')· .
·
:1 . 1 oo oon
b 311J.uon
'" <i OO.:..IOO
ll. 700.t)()()
5.,7.,
- I · •

...
 Page 9

L l i .o ( 1 1 1>�1 0.' 1\: p 1,n ,· _: l ) l :i ··:hl l"t'

' if
! � 1 1 1 1111 .:n:. < Hh.: ; 1 . · ·- '-4 i; •_ ' ·· ' '11 LJ -:.. cTH
:
• ·1
· - ; l .
,,.a ad J• usl me
Yc� r-1: 1..u II:• !
nt for 1 he fol low ing
••

�
., No salary atc rual wa� SaJaries for this !Jerid'J
made for the wt.--ek ·oI uecember 25-3 ' - 20 1 3 .
totaled P I 8/Jl)O and were .
paid on Jan u:uv 5 . '.2 ·. 1 4
•
Bonus for 20 I 3 was paid on Jan r of p J 75.000.
�: i . '2v l -. . n ihe lOUi! ar,)oun
u"an
What i� the adju'.�tcd balance of com n!..� l i•.•r, :-.x�c . ::.;: for ::w : :. �·
pc:
a. <i83 .00(J
b. 665 .00 0
l' . 508.000
d. 490 .00()

1 7 . Enriw Company p rovidt"Cl lhe following ·: • JW ' - '' l ' ! c- curr�m

.
2 . 500 .00 0
Cash sales
sso .ou o
I
:-ialcs 011 uc.:oum
l 1 . 700.000
� Cash purchases
400.000
Cred it purc hase�.
1. 750.000
Expl!nses paid

l
2 5 0.000
.i\1.:cou11ts n·c c i \ :..: b le h n uary I
rno o uo
D•:cember 3 I
. .

'\c<.:1lllnts n·cc i v :tble

1 5 0.000
.'\C <.:Olll llS paya�JC -- J.rn� .1ry Jo . '
:mo.ooo
Accounts payable - Dec:·· m')er l)
5 Ot>.' )(Jtl
· 'i i n ventor y - January l
. I oOO.oOO
ln.ventory - December .3 :
2UJ Jl)O
Accrued t:.xpen��s - Dci..:l.!mbt:r 31
J 0 . 01) f.l
Prepaid expenses - December 3 I
I .UOU.OUU
Equipment - De.:: em bt:r I J
4U.IJOO
J ntc:rest rec�ived .
I u.uuu
l n tCrt>sl rccl! i v a h l e - Jan·.1ary
hitc:rest recci vable - December J I 20.000

()n .lulv I 1 1 f the c urre n t year. an eq ui pm e n t ,,as .:: q uin:d fo! F�lJ0.000. The lerms are
; P:l�.000
.
down �nd the b::tl a n c e 10 be paid aner one ye:ir. T l 1c usc:ful l i r e 0f equipment 1 s I 0 years w11h no
;·esidual val uc. \\'hat is t l .e net income: unlier �ash casis?
,j. :'50.IJO(•
b. 5 70.0Utt
c 540.00t •
.t. MO.t>011

.1 8 . Sarrah C0r.1pan-,· Jisclo .cd supplemenw: ir..•vrn� . ;! !(::1 on th..: .: ;·rects of .;hanging p ri ce > . The
i:11t11v nlrn 1utc,1 the 1 11u ·:.i::.;:- in :-urr:nt • ; ..:· · . : · :. c\>r} ..JS ' " ! · �''":-;
·
. ·

" "�
•
J

Ir.crease in 1.: urrent cos! ( 11ominal peso) 1 . 560.000

l ncrcas\: in l: U fTl'nl cost i..: 011s1an1 peso) 1 .200.000 •

What ;imount should be · l i scleised as"che 1 r rla1i n J 1 vmponen: . , : · :;w incr..:as�· in l.'.urrenr \."OSI'.>
2. 700.000 :
•
:t.
•
•

b. 1 .500.000
c:. 1 .200.000 .
d. Hl0.000 I
.

\'1 • )n ! >c:c�rnbcr ) 1 . 20 1 3 . :\11dn:i Com pan:- (l\\.n�J : •'d assets :�:-: i:>f l1)WS

Eqo ipmrm f nvl·n lory

..· uricn1 co�t I ._1u .1J(lj) 8u.OOU
Recovc:rahle amou nt · · :' .uop 90.0('0
' .

Cite e n 1 1 1 y volunta rily di ;dosed supplem

c:ntar�1 i n �1 • rm!H10 11 .1b-.rn• 1.: un-i.·nt cusl nn De1:em ber 3 1 .
.W l .1 . In sw:h a disc!u su r : . what amuun t. s11011IJ
.
•

i•�· rc:pon �:�i , . '. · • i . t ! ass1:b '

1 7 � .0()( ·
•
:1.
•

b. 1 80.00< ·
i.: . I X S.OOI ·
J. l •>u.Oot
. '
5772
 '·

' I
, . '

I
t
Pugt:I i.o·
11l. Wl•slcy Cuu1pa11y 11:1c1I 1lw dil'ci.;I m�1h1;d \ll p1·c p . 'r •
.
lit.: ·11111< . '
. 11-:111 ur cu:-.n 11 .. w ..

2013 2on

Cu::ih 35.0UO 32,00.ll

' Accoun111 rccciv uhlc :n.ooo . )0,000
Inve ntor y 3 1 ,000 47.000
Properly. plunt 111u.I c1111ip111cn1 1 00.000. 95.000
l l nu11111rt L·1·d ho11d d is1·11u111 ·l.)00 ).000
Co�t ul' w "'Us sold 250.UOU 380.000
Mlin
' v � -�111·11s1· s ..
J J uoo 1 n .ooo
( lcncral am\ u1ltninislrnti vc exflt'llS�·i; \ J7.000 1 5 1 .300
l11tc1 •:s l 1":p1·11·;1· 4.300 2.t>OO
l11r11111c lnx 1·:-1 1 1\·1 1�1· _I!_l�!.Q Ql,200
� 21Q,IQQ
l\l l 1 1 w. 1111·r i'1 1 r d11uhl 1 1 t a1'C1l\tll(S
.-\ 1 1 1111 11il:t11·d 1.kpr1•1· 1a1 11111
1 ,.100
I i 1 . \11!1
' ··� .
1 . 1 00
I :.. uoo
. ' .
} rude 11ccoun1:; puynbh• 000 • 1 7.�00 :
l11c11mt· l u xes payuh lt" :'! J ,000 ::!i'. I Ol�
I >l'!i.·1 r\'d 1111:11111t· tuxes S.JUO 4.600 �·.
ll'Y., 1· 1tll11hk honds " 5 .000 2U.00ll
..
,_
puy11hl1•
"
S l t a t l' vapi l a l 50.0llO 4l1.000
�l t;1re pn:1 1 1 i i 1111 11. I 00 i'.50l>
Hc111i 1wd 1:arn111w; 4..J,100 64.600
S:tl1·�
� 18.J!O O 778,'/00
2�v LQU.. 21�w.WJ
I he l'l l l l l ) pu1\· lws1·d l ' '\,OUO i11 cquip111e111 d u 1 1 1� ::?O I J . I he ::ntity all ucutc<l one third uf !he· .
dq111·1 1:11 i. .11 1· , p1·1 1..,1·
1·xpc11s1·�. I hc1e was
" w l l i 1 1µ cx pc11..,c�; :11111 1h1· runui11dcr t n !!1·11ernl 1111 <l admirnstrativc
d
11• 1 wrileoff o, . uccllu111s rc1 c1vubh: uri nl.( 2 0 1 J . Whut hou l be umounts s d -
rcporkd i11 1h1· •;ta11·111l·111 11J' cush !lows li1r the fi 1 J ltJwinf•: •

I. l 1t"llt • 1 11 lc, t1:J l r1 1 1 1 1 �·11.m11: u:rs'!

II. "1'1 1 .XUll
" "1<1 1 ,l)!ltl
l' '. • It 1,IJl) l l
d. 'i I C\,Kf lfl
. . .
• ��. < 'ush pa1J for tLOOu:; to bt: sold'?
. ' ..
a. : ! S K . SOii
h. .� 5 7 .500
c 24.UOO
d. 226,500

1. < 'ush pnid for inrerc:»I'!

a. 4.1<00
b. .iJOO
l'. .1.800
d. I . i'OO

4. C ·ash paid for incorm: tuxes'.'

:i. ::!5 HOO
Ii. 20 '100
I 'I 71JO
.
l'.
d. I S 000 "

" C 'u1>h pmd for 'lt' l l i n : i exJX'nses?

.t 1 4 ! ,l l(ll / . . � ....
h. 14 UOO
�- 1 4 l .000
J, I 40.000

57'12 .
 ..
�,

CP \ RE\'IF \V SC� � ·. L '

' t I E l>H I U P P I N ES
. .

f'l� •\l ' t

A« 'C 0UN TJN(; I LECTl�Rl . V.t..l.IX S I Y VAUX F E R RE:
Th.�,.\ \
- PRE\:\T.EK

SF.LF 'l t:: S • .

I . t\ h'\'" \. \'mpan� l'CC\' rdcd ioumal 00 of dividends . !he:

entrie:. for :nc declaration 1.lf PS00.0
:l\\'l'l..'ast.' in :\\'(ulll\ls 1�c,·ivu b k and t he purchase n f
for sen 1 -: �·� kn:d of P3l.l0.000. • .� . •

,·,1uipmcm for P l )0.00l\ . What net efkcl dt' 1h�!.t' c;1mc:s hU\.t' o n equi t y·.>
;\. Decrease \It' Po)O .llOO
I' .' PC\'l'ellSI.' \lf P_, 5ll.OOO
,. lk\'l'C�\St' \It' I' �Ol).lll)O
,i h1c1'l.·:1s1.· ,1f P I )ll.1l()()

2 \\ \\\'\' lun is '' l�S\H'l h .)�atcd in Pl\l�wan. \\ a\ e lnu \ . . 1i!ects cash 'vhen guc!sts make a
reS<:n-�til•n.
l lm i 11i.'. I k,«·111h,· 1 �t' I .I . \).:a, ,. Inn c,.iltt(·ted ?e>ti 1 _ . )tlO of c:ish a nd rccordt:d the receipt t-.�
.
;\','''l'.11 1 1 1 th'. tllA';1nwJ 1\:w11u,· . . \\'a' � Inn had c.!rl>:J 1.me-th irJ o f thi:; amoun
t and the .>titer
.
:\\,1 · 1 h 1 rds \\ i l l h: earned Jur111g .lanu.1n 20 1 -1 \\ :1Jt i s 1hc i m pac t uf the: adjustin g entr� �n

l '1..'1..'l' lllhcr \ l . 201 '·:

. 1. ·l \\\Ull\\l llh.'l'l.'. lSl' iu cq111t�
l· 'll\1.1\\l\1 , k, l'l'.l:O.t' 1 1 1 \1. hd i t l< .''
( llllll.UllO llh:r�.IS\' in tl:i:-.ClS • • • lit•

,I ·:�llll.llllll ,b:r1..•asc 111 cuuit\

[ ) c:c em �r 20 1 3 . PICPA he ld an annual

l\,1ra l 11n 1s :1 t'l.'sort lo..::1tt'd in L'atician. Dur:i:c
·

·'
,·,n1frr1..·1h'1..' at tl w rcs1..'rt. l'he dmrge� . re:.ucd 10 111..: con !ert:n..:e totalc:d P4.UOO.UOU. of ,·, iJ1c11
' °' " o h:id bt.• 1·11 pa i d H0r.1 Inn failed w make 1h.: .1r;m1priatc:
adiusting c:nt� on Decemher :: I .

.' 1l I Y' \Vhid1 ,,f 1 1\l' t�11l,\win!;! s ta t e men ts 1:. trm· · •11 lkcemher � I . 20 l >0 '

:1 . 1:q11it\· is 11\l·r statt·d Iv PJ. 000.llUll

I• h1111tY is und1.·rst:lll'd 11\ P l .0(lll.0Ctl
,. . 1\sscts :m· undl'rstatt'd l'� PJ.OOU.UUO -
,I. :\SS\'I:-. Ull' \l\'Cr:;t3tt'd hv p 1 .000 . 000

I lurin� llw !'irst "·ar lll ,1('t:ra1i1.111:-.. t 1 !1.1be 1 ,1mpan\ rc.:or<lcd .ii: pun.:ha:-.cs of :;upplie:; as a:;:;1..·b.
�i('t'l' Sll l 'Jllh�S 11 1 the :1111.1u11t nt 1 ' 2 .lllltJ . 11 °t l \\ 1..T . '.'\lrduist".I ·\clll:11 � <.:nr-cnd St(•rc supp l 1c:s
.lllh111111t·,l "' l'�\l\1.t\llO. \\ l l :1 1 h 1hc 1 m p:1..:. ,, t th>! :1 1u�11n� entr� un store suppl it:s'1
••

.1. lia· a';1Sl' 11c1 1 1 1..: ,1 11 1 l· \> . l ' l ..ivd.UO'.' '

.:
'' liwrcas1..· t'�Pt'nscs hy l' l .500.00\) I
'· l kcr1..·a�I.' shire SllJ'l'li, ,: '" P:'L1<1.0o1•
.. I k,· n-;1:-;, 111 .1,·c,1u11ts p.1� .1bk h� 1':'00. ·. "' '
'
•
th.11 the l.'t'til:c· :1 t-:1bn..:e .ll th; be1.tinni1w · •
'\1111 \ \1111pa11\ :'l'l'1.ll'lt.'d
•
Su;;�' . t .: :-. .: ... q•Unt J1aJ
' - C' 1.11 2t: 1 3 •

,,� P-10 .lltlO h1.•fo1\' the P:1 ��1"1 :· 1 '� 0purd1ases uf 0ffice supplies during 2< : 1 >
re · crsin;,? en1r� ·
.111h)llnled It' P2.' 1).lllltl :1.1J wen· rcc1... i 1.i .. . :.:- ,·,:.- . . �,' . \ phy51l:al cuunt at 1he c:nd ul 2L ! 3
. ·
•

1,·\'l:'JlcJ supplies ..:ostin� 1'50.000 were oo < 1.irnJ ifr, ':r;in g. emnes are made by the c:nt it ' . w i1at . -

1 � dd,1t1.·,t in the .1Jj11st111� cntr� al the end .. :· 2•J : .• .

•
lltfa·l' Sup l'l i1.·s Expen'e P 1 0.noo
l' tltfox Supplil'S l ' l ll.tHltl
1•. l-ltlic{· S u pp l ie s E x pense P240.000
.L. Ot)i,·\· Suppli1.·s P.5 0.0vtl

(• . \,·t' l \1111p:t11\ pn1\·idcJ t h e 1i,ll1min� i n f1.•"::1.Hi.-·!: .:.•:· the curn::nt � cur: - .

! .1 isb11r�1..· 11w111s li•r pun.:h:i se:-. 1 .050.00(j

l nfft':IS>: Ill t ·.1d1..· .h.'C1.\lllll' ;1a\' :tbk· 75.000
1 11..'t' l\':tsl' in 'IWl\'h:lnd i Sl' : ;l\ �'llh)I'\ 30.000
\\'h:11 1-; t!w .·,•s; ,,f go,1J:, ·1.>!d for the :ur.-ent y<.>ar'
a 1 . 1 .'I �.Ol)O
b. l .Utl:'i.OOtl
,. 1 .0\1:\ OOtl
'"1.'.lltll I

5774
•
 I:
. ... -- ... -·

§>.-
..

�'it.
..

••
! •l:c
f
.,
p..igc \�
,.

1 \ 1 1 J a1 1u;ir� I. _ , l t � .. l bl\�•.ki ik � \in-� irin y repun•:d tllla l us:;l:'I� P5,400.0 0� and to1a 1 !iabi_1ilics. ·:;
. . ol
I' \ . ,'40.1\\I!! . I h 1 . 1 11!_!. .:1l l l . sh:m.• c:1 p i1al i ncrense(' �1:·· P972.000 and 1he entity paid .d1v1denCls
i sharehold er S equity g n
l ' l .OS0 _1\1 1\ 1 and 1-q1011t·d 11t· 1 income ci" P l .OH0.000. Whal 'i the
.
l >l'\T111h,·r \ \ . �1\ l \'.' .

•I. I .l�'l\l.\l\Hl
h I 9\.IS t 1Hl
. . 1
\' . \_\ \ ' .1!1\\ \
,t _ i. I l\(1.1 •llll

S I �=-1·:-. < ·,111 q1;111' pnwid<d :he follow mg inform:ition on Decbnber 3 1 . 20 1 3 :

"
( 1�.11 1\'11111 l�d I I \'.1 11\IC � i l ll'l: llll' l l l'IJl ll'aliun '
J 7 00 .000
I 111a l l'.a�h d 1 \·1,•·,·11d·; ;);;1.1 ( 800.000 ) .
I tn1\':lli1.cd h1•i . 1n:· ll )S!:> .11 1 trad i ng. 1 1 1ve�.1111c111 ( 1 20.000).
I 11tal :.ha1' di' ;,knd-; lli·an but�d 200.oooi !
I
l'ri11r p1·ri1' - ' ;1d 1 '"' :iwnt rcc111 deJ h1�1u;_ir:: ! . �O I \ 75�000 I
I . .
1•
,.. \\. lwl an 111u11t -;1111ukl IK rcportc:d dS rctai111.:d i;;urn1 1 .;; ...on lJec.:mber 3 1 . 20 I .3? I
·' <1 :- '.()\hi
h i1l0.1l1lil
,. _ :i�0.0\\(1
d_ 7 7 'l,ll0\l

l{111h <.. \1111nam· p1\.wiJcd the tol'ow;ng ewnt -; fo1 �0 1 .\ !ht· tJ\ rate is 30% .
• l kpr1:·,·i;1ti,111 l\ir 2 0 1 l \�;1s l�'un<l to bt- u1;ders1� 11,· ! 10.000 .'

.:\ l it i t1a11,H1 st�1tkmc111 ri..: sultt:d in a loss • 25.000

l"h1• i 1 1 1 ,'1\1111"� ''I\ BC\'CltllH'r 3 1 , 20 ( ( WllS OV<!I Statt'd 40.000
1"111' l' l 1 i 1 1 � ,!isµ,1sl·J ot' t llc rc..:rnt ional di..,,:;11.:n Jl a ll)S� 500.0,PO

Wh.1t \\ \'11!. i bl· the cl)'t>0·! nf thew 1.' \ \:llls \lll 20 1:1 net i n rn m c 11e1 o f t:ix ·?
:1. I l :-rn)
.

,, .� 6 ? � � '. 't)

·-
1'. -� ��.:-110
d. 4 l h.� ll!l

i 11. l r,•l:md � '_11111'.:!1' '. . <.':!· :: :1�·,·011nt ''H"" '"! :i 1 1 .d.11i.:.: 11 1 ·

P-J.:'ill1J.OOO helix� reconc i l iat ion. The
1':1:1!.. :-.1;11« 1 1 1 ; ;- 1, 1 ' " ' 1 1i- : 1 .,'. · 1 ,1 _.,,,,� 1 . : • .·
• 1 J 1 1ll 1 1 ;.JL c- . i .; th<:' last da\ 1.1( the llll>1lll1 . l"hc
,, ,

�nnk sl:llt'l\h': 1 slh'Wt>d a collect i rrn by the bunk nf P94 . 000 and :i cu's\\3'1-ler;s check for P32.000
-
\\;IS l't't1m11.'" · ,,.,.. 111.;,• it "1,1s N S F . '.\ ..:u:.tlltnl-r ., , hcd. for 1'45 .000 was recorded on the hook\ as

P." 4 .l)(h). ;111,i a ..:bed .. wr inen for 1'7.90() wa:; rcC•>rceJ <!S P9.7v0. What is the correct balam:e 111 •

the ,-,ish a .,.1,uni'�

•

:I. i.,)) l .�(\t}

" ·· ··"' "' � .:\O tl
' � . ) ; '. �llt}
d . 4 7�·tl\t )(.1 _

! J M tll1'h'
_ ( l 'l l l l '::nv pnn· 1dcd th� fo!J,)win�'. i n form .�t i o n i�ir 20 1 3 :

\ j l, \\ ;t • h' ti11 d<11:! . . foi .l\.'l'11U1� . � 1 11 1 ia11\1:11-�· ! 8.COO

.
•

\ '1\' lit '\;I'• ''.\

400.000
·, ,,,-,1111, 1:-. , ,'l't'.V:t! 'I,' d · · 1 1 1 ,·d '�l'rtilk s:; .'.a,� '" 1 !:1, 11 o ff 9.(•00

l'l'!>U;! of :•�· i n� 1 1 · :1..:<:t' dllt-> n:cciv:ibk in ·:arly fanu..iry 20 1 4. it was d�ermined t al an

- " :-- a
�
ded on December 3 1 . 20 1 3 . What 81llOLHll
;\ll,,w�m\:t' for ,1,\uh1:'ui -ll l ·•UlllS o f 11;1,)t)() w·a� r:�c
" ' 'LI '· .. I

,h,)ttid he.• ,,.,-1 · . ,h: .1 a:. � �hi ,I t' l'l cxpt'ns::> 10r ..
-· -

.1. .
; • , , 1(1
h. ' - "l'' ' . .

,· h. :-\()l l . '
.
,\ 1 1 .:'t'''

·-
·-' 5774
,,
··� ...
 ,......

k l ( ( .l l l l l f>; tl l)' l 1 ;ol; ,I pJt . :;11.:;il J •. j 7 _; . q: )l l • d

l i 1 h'IJl11 ' I . . , ; t J w \ �' . I r . l l l d � k�l l.'rll l l l l 1.:d I l l.JI
gt!o�s
·

"'.'ere on hand . The ent i t y dt>le�·� ·i ned i h �:t •t1r:11d<(co stin!l .P60�fJ�o were <>hi pped f. i . . h.
dest111a 1 1 o n fi·orn a v e nd
o r. The goods Wt'rl' ;;..iw. 1 � :cc: i vn J by tht.· e n t i t y
three duy� a f t e r . l fl·
.
. -

i n ven tory c o ul lt. The ur j' t!Ur-·

en1 i ty sold P25.0uu wor1b 1 1 m venrory shipped f.o . b . c.Jes t i n u t i u n
end. What wnount should be n:portec.i as i ; I \ enttn .\ .11 .veur-emP • 1
.
a. 47 5,000 ; .
b . 535 .000 .
.
c. 500.000
d. 560.000

I ' · tvl i ky Company budgeted the fo l l o \A.: i n g �· 1lc:� .

J u ly Aug u�t
J u nt!
1 . s : 10.ooo 1 . 8-1 0.UOO 1 . 900.000
s�lk�; on acc o u n t
{ ';tsli -;a lc·s IW: .li(iU 200. ooo 260.000

!\ I I mercha nd ise i s mark .;d up to sell ::1 i i " oic:.: ( • 1st p l us 20%. Mercha ndise i n
� entorie � al dit·.
What i s • ht.·
begi n n i n g of each month are 30% of i11.11 moll[ I ' :; proj ecti:d cost
of g oods s old.
�1mount ot a n t i c i pated purchases for .July · •

a. 1 . 63� .UtlO
b. 2.07(i.OCIO
• I
..: . I . 7UO.UUO
d. I . 73 0.0tiu

1 -1 . I turner Company purcha: . ed ;1 Jc.>li \·cr� \ . . , ., ; 1 !1 . hl ;m,:c: 1 • l � P � .OOO .OCJO. I h1: lk<Jkr !,!l<l l l l� c l �1
1 5% red uction i n l i st pri.:e a nd an aJJit1l•ll;:d ::? ... ,. :�; ..;h diSCl'Ulll on tht' net prict> i i ' p�1 y 1 1 1 t.• 11l r �
made i n 3 0 dav:;. Nonre 1 imd:ibk purdus•: • a:--. ·-> . . l l l l.lll l l l l'<l i u l'-W.()(JO anJ tht: e 1 1 l 1 l � p< . i d .in
t"ost 1 > f ! hi;' •
e x tra P30.000 to hnvc.' a :- pt:..: i :.t l horn ins•�llcd " I .11 .Jn11>un1 .,:10uld be rt'c.:ordeJ as
. •

,:.an?
a, 2A99.000
b. 2.564500
c. 2.569.000 • I
'
I
I
J. 2.:'i :l 9.000 .

I '; Samuelson � 'tlll1iJUll) incurrc:d th.: folfl.•wing cosi� du nug 1he co11s1ructiun of an asset: • II
Fi:\c:d l>ve1fo·�1d !Or 1he ye.1r 1 .000.UOt•
.J\)rt il)n of P 1 . 000.00() fix·:d llvc.>rhe:id th.:i; ·.1 .. ; d J
I
I

be allocated 10 asset i t i l \\·ere- Jll)rm.:I 1� :·,lei �1·..: 1 : , ' 40.0U(•

\' :iriahk 1 1 \ crhe2d :iuribu .:tblc: w sel l -L'l1 n · r · 1 ! � l! · • . 3 :; .00( .

\'. 'ha1 <unuui.1 uf t>Yaileau shuuid oe in.: : uor.J 1n. u • ..:- "ost of the self -tt>1Hl'1tc1ed asset'?
a. ·75_000
!· 35 ..000
.: . 4-0.000
J. 0

I r: . On Seprember20 1 3 . i\. f rnde.z Comp.in) ;.u1 ..·JJa.:.�·,. a !lt'\\ nuh.:h1m: on ::1 deterred payment basi s .
l.
..\ do°"'TI payment of PlOC.000 "'as ma�<' a.i .d 4 .rni .u�i installments uf P600.UOO �a..:h �lrt' 1c� ht'
:i1ade- bcginrnng 0.1 September i ..:'.O l -l. Th� ;.!sh cd . i \ .1kn1 pn ..:1.' Pf !he mal'lllllc" ''a-. P .::' ..1 0 ( 1 .0 01 1 .
_

Du� lo an em pfo» ec- strike'. the enurv ..:1.>ukl . • < :! .:3\..1 !l :he machine 1 1 111111.'J i a td \ . anJ thus in.: 1 1 11-.:J
1"10.0UO of s�orag1.: ..:os1s. �\)sts of insull.:t• :1>n =�:, : : : ! !in).' tlie s10r 1gc.> CllSts �m�1111111ed " ' P80 lllll1
\\· ha1 is the tutaJ .:vst of thl: machin(:'·>

�- ?.100.noo
;� :::' . 3 !-. (l .tX>i l
2.-f I 0.l)l)(I
u. 2.NJU.000

57?..t
. '

• :.•
 r"'· ' '

. .

. '.

Page:: .�·
down pa�mc-nt ":l.S ..
.
1 7 . Sto.rm Company purchi.sed new machine on °0ctober > r. ..\ Pl 20.000
n

made and ;h..·ec month l v installw ents of P360.<h1 ) e:tch art I\> tie
. made: tieginni ng on Nove� �r.
ill) charges um.kr
..
30. The c.1sh rricc wouid havt' bo:!n p ! . I N).L)lJ(\ fhe ·ntit:- p:iid 111st.illat i�\n

ui, duU):C h:1ve incum:d w11h 'l

the month ly a P20.0UO 11is1all
p:1ymeill
f'l.ln but n \H)Uld tx�n

• cash purc h ase. What amount should be c°:ipitslizc j :is the co�t (if the mul·hine"!
• a. 1 .220.000
h. 1 .200.000
c. I . l l>0.000
d. ! . ! o<)A ··n ·.

1 8 . Bianca C-11 11p..in) pu rc : 1ased bnd for a 111:u:ut:i.::uring �

foc11ity for P I . I 00.0UO. T e ent t�· paid !
_
P70.00\J l<> lc!ar down a building on L'1e land. Sah age sold for P I U.:'iOU. Legal lees o I P6.)00
\\. a s

\h:re pa i d fur 1 1 1k inve.,tigation and :n11kint! tht run:: hru>e. The entity paid architect fee P40.50U.
ti tic insurance P4.)0L . liahilit) insu.-:10.:c:: du:in� P l 3.500. and c.-Xt"J \ :11i�u
construction
-.
P 1 2. 000 . Tht· ( Omractp;· was p::id P 1 .357.(lt)V. -\ one -time assessment made hy the.- c i t� ll1 r
�idl.'wa lks \\:1� !,.., _ :'l·l' :·he ul! : : :. in�t:J!!.?.� liµlli. !! :;:1d ;ii;;:J�c: 11
: u l'(':il l)( P l 1 .000. What is the

lOlal co st of the building':'

•• ' •11•

a. ..
1 .505 SOC
h. 1 .432.00tl
c. 1 .423 .00U
d U57.50U

1 9. During 2 0 1 3 . Bass Company constructed asset; costing P I 0 .000. 000 . The weighted .:1�eruge
accumul..ited expenditures on t hes � assets duri11g 20 1 3 to taled P6.000.000. To he l p pay fnr
constructi011. P·l.400.000 was borrowed :it I m o ,)n Januan I . 201 3 . :ind funds 1101 needed for
construct i ;>n were tcmporaril) im·estl·J 111 �ho: -term scl·�rille:>. :- ieldi ng. P90.000 in intere:\t" .
revem11:. t llhe;· than the cunstrucllon funds born' .\- ed. the.- uni� ,,1her Jebt outstanding. during. the
year was a F5 .u00.000. 1 0 -year . 9�·0 no te payable- da:ed January I . 2 0 1 0 . What is the amount of
i nlcrest that should b<! raµita!ized aurinl.!- � 0 1 3 ':'
•

a. 600.0tH.1
b. 300.0()()
c. 494.00 0
d. 94-t.OOO
:u. On January l . 20 L; , b.1mo �1c110n Cumµ.:n:v purch:i�ed eqlllpment with a �:ost of P4:suu.OOU. :i

•
usefUI l i lt: o ;· 1 2 yea rs aad no residua l value. fh� entil� used straight line depreciation. On
Ol.!1.:em bc:: 1 � ! . .::u 1 .:: . di . emll:> de1e1 mi11cu lh:.tl 1 .• 1pa1rn11:111 1nu1nitur� are p resen t. ( he fair \ ahll'
less cost •If ji'P•'s:il " ' the asset i -; est!matedPJ .ctl 50.0()\l . rhc.- v<1lue in use is P.l.500.0lJll
a
.

There i s no ch:�ngt !n the us-:-ful life or resid; al rnluc. \\'hat amount shou ld be reported :is
_
deprec1a11on expense feir 20 1 4'?
a. 320.8:,J
b . 350.000
c. .1 7 5 .00 0
• d. 385.000

2 1 . Vunce Company provi�!ed the fol lowing infom1a11on on December 3 1 . 20 1 3 :

{ 'opyn!:(iil 300.000 .
DqJ.>�11 v.. i l f t adverri$ill!! agt'IK V used w promc.tt· goo d w i l l �70.000
Bond : !nlrn 1g fund 700.00"ll
l:.t:t.:SS l>f cost uver fail •.taful' of idc:ntiliabk l�e! .!>Sets of acquired subsidiary 3.900.000
. r rademar:, 900.000

On December :; I . ) ;J I > what amount sho<1ld he r :ported ai; total intang.ihlt' assets?

..1 uwo.oc11i
.:
l.;i_ 5.070.000
c. 5 . 1 00.00!l
d. 5.J 70.0!J!)
"' '·

..
"
5774
. ��
 .. . ... ... ..
.
·'
"

• l'a�c S
( 'om p<lll y :ic4uired a l>iflcni 1 ·i·cim ''• . ...., 1 .. . " ' .'I111) .", 11 ,"\. �" i i • m••I'.'
\ ·1 1 : i i
C'
. tor 2300 shares of Mi 1'i i s • •
: par v alue ordin ary :;hare�.
.••)(J . i n i t ially issued 1<1 M :1x1
•

and 1'750 . ' · i i(i ":·:·· ! ! ll'hen the ;ialent was

' nmpa ny. lv! m1 ( 'om ,
p:m y·� shar e was :.,! f l . 1 11-• . i , , .� When M i n i Company acq u i red the pat..:nt. .
11� :;hare Wa!. sci ting for
1'90. M i n i Cvmpan� !>huu>.t n.:c0onl the:; patent at \., hat amount '!
a. 875.000
h 93750<1
l:. 9 7 :, . fJ(J(J
•J. 750.00(1
.
2 � ilo �ulic Company is lo c: 1 1 c
J in 1 .onJon l';JI do·::. 1�.1·;i ness tlmlu�lwut Europe. The entit� 011 ld� \
and �db cquiprn tnt used in r1ianuf:ic.:tu l'I! "-'. 111 1.,n! : l'�cuticals. Un Occt:mber 3 1 . 20 I -' · the �11r11�
llad t rad i ng securities P42.000
. good\\ i l l I' ;oc.,1 ;1 11.1 . prt·puid insuranct: P24.000. patent P l 4lJ.t1iOO.
and u cu:aomcr l i�.t I'� ( 0.000. 0 1 1 IJe.-L· : n hc 20 J i what amount should be n:portc� as . .

,n1an µible <sssct'.: 0 1 ;

... 74:.> ,()(1()
h 7 (J().()(•()
.
.. . 700,0l•I)
.t. 441).(J( 11)

.d . uiaL1a (. ornpany incurred the totfow111g 1.:u�t:; �un .ig the current yenr: •II•
Laboratory rc'.ica rch ui1ncd ut J 1 sc11vcry 1 1 1· 1 ··"', J. 11« \' l t:dgc I XO.lHJt1 •

l'usl� ot h::-.tm� pr<itut)'pc anJ Jcsiµ11 1111•<ll ! i cat11 -1 1s hut cl·o110111i1: \'Hl b i l ity
nut yet achieved � 5 .00.0;
Qu a l i t y control d u r i n g ..:ummcrcial proJ uct1on. 1 1 1rlud ing rou t 1 m: testing 2 7ll.UU!J I
Constructwn ut rcscar('h facilities havi11,.: illl c:sti 1 11atcd 11seru1 l i te of
(, year� but 1111 alt·�rnatl Vl' future u:.c J6U.ll00
'fit,
. \.• Wlwt t11f<il ;imo,1111 �h111J'll he rc� 1 1 µ 1 1 1 1.cJ ,1:. rc�.cur"h a 1 1 d d1." ·t:IDpment expense?
:1 ') �,l.()IJlJ
- .
h. 8 ) ) .01J()
c. 585 .0IJO
J. ]!!5.(JCJ(J

' '-
...Vintcr Cornpa1:y l'i hei1 � :,uni : u r 1 l l i 1.::. l..:u .u: l c o l<1cnl rc·�1,k111s ;.is u rt:sult of llt:�li gt:nc<· 111
pcrn111ting lht: resident:; IO h1: l'>.posl· I I • 111·!:,1 .. 0a • , i1. dic111iG1is. 1 1 1 s probable that 1 h c c11t1t)
1

would lose the suit a nd be fo u nd liabl <..' ! c .r ·1 : • i.t •.'mcnl cost in),! Jnywhcrc from P 1 .200.tlll!: lt;
l'ti.OOIJ.OUCJ lfowc·11.: 1 . tl1c 111os1 proti;i!iL i.:,,,: i . 1' . \.000.0lJl'I What �hould b1.· r1.:pn11ed i n thl.'
!inam:ial :.takcm· nt:;»

... l\..:i.:1 ual ul J.,.;:, CulltlJ •i:(Clll y l',1 . .'.1 IU.' I 'I

Ii. 1\1.:crual 111 lo�s cu11tin cn1.:y g I' 1 .(J1 J1 1.1.11Jti ; !111. dlsclo�ul'<' of an mlditinnal cont i n�c nc �
1'2 .�\JO;1!10.
.. /,cc;rual .ul I t • % 1..:u nt11 1gcncy l ' :l .0Uu. 1 11 11 1 "111 1 1 1 . t r �11lc1sur,· 1 1 1' any :idJ i titinal contingc111·: .
d. • No accrual cand disclc1\un: of los� c«r:1 •· , . . . . ' '

21i. r:o law Companv paiJ a l l ·.ularicd c11 1pl11: < C: "' h1 wt'ckl;.- lia:;is. 0\'Crtillll' pa) 1s paid in th�·
l!CX I hiwed Jy period f 'h·: t: l l l i l � .11.· c 1 1Jc.J · " · ' l ·.'�. • " i'l'ilW 1 1 1 1 1 � '.II) f kt:1 : 1 11he1 .\ J .
;
LL�t ra� r< o ll •:.::i� p::i.i ! : I I : i·:l..: t: l flh::r �l . . :�I · '" 1111 t he 2-\\c:d. IJL·rilld ..:nJ �d
1.>..:cc111hcr !.6. 2ll L!. 0111:rt11nc puy t:a: 11cr; ;11 ti 1,· . - w�ck perioll cnMd Dt!L't>mher 26. 20 l .1 w:is
1 ' 1 011.fJOIJ i{cmain i ng Wl•rk di1ys in 2(J J � . . c1« : 1.-. 1·! 11l">Cr 29 1(1. J I llll which li<Mi
. then: w:L
'Y 110
"verti111t: 1 1.c recurring h 1 wccldy sula 1 i.:� , . . 1.1k·l t · XtJO.l•lJO

,\:,�1 11ni11�· :1 fin-day work wetk . .,.,hat : 11 : 1 . , . : : t · · ' 0.1 ld he rt.:L"lll lkd ;1s l iabi l i t � 011 11t'ccml"er .1 I .
:•o I
:1.
J !or ac•;rm:.i �ularic� '
I .l18U.1JlJ(1
· I-
1 •. ! . J XIJ ,IJIJ(J
, ,.;o.UlJ()
1!. '140.00(J

.. . . .. ,
5774

======!·-�---
�"�'� ..":. .:
" -':�M:·�� :::
. - :.�
.._:
�·- �
� =�:-��-�.-�·� ..
.. -�

- ��
i�� /
-

- .
 . . � ....

--. � Varµas Compun)· h.l�- l i en: p ln � 1.·e � wh: · work 8 · h•jUr day� and are paid houri}°. On fanuar) I :
C'414:rl .)'�4'r.
�U l l . lht· 1.:11111) begun i1 program ot gran1111g tht' - :mpio� e�� : o day s ul pa io v<K:aUOn
\1m:nlil111 day:; . mw . . in ''\1 1 ! nuy lirst h� tak.:n •l!� Januar) I . 2(J 1 1.

Hourly Vacation Days Earned Vaution Days Used .

. .
\'cu Wages by Each Em p loy t � by Each Employtt .

�01 1 2 5.&0 :C 0
:?0 1 2 27.00 , IJ 8
2 8. SO : (J 10

l'he e111i1y has chosen tc accrue the 1iability for compensated absences al the current rate of pay
i n t-t1i.·.:-1 \\ hen the compensated ti mt is earned. Wl'i<>.t is th� accrued liability for compmsat�d
ahs.:11.:1·, 0 1 1 u-..:emt>er ; l . 20 1 3 .' (Hinr - Fl J.'0 I .
:\. IJ.; .')_2 0
b. 1)0_ 7�()
l' . ·N.�()(I
d . 'J). 760
. .
2l:i .• I he l 0% bonJs payaule •>� · N i xon Compaii) t.:t&I. a• net ca1Tying aniou11t ol P5. 700.(J{)(J on
D.:.:.:m h.:r 3 I . �O l 3 . I h.: bond�. which h..J .. :a.:� ""tu� of P6.UUO.CJu<1. Y.erc i�sut:d at a di �ount
Ill yield I :?%. 1 h.: '.!l l�<.: ' l ''t" !nterest method o! a111ort1J:111on i.; u s ed . lntt:rcst \\as paid on Janua1>� •
r :md .July i ror ca�h ' ear On July 1 .· 2 0 1 -l . tr.:. entity retired the bonds at I 02. The interesr
p:iyme111 r· n .lt1i � 1 . �O I :: was made as schedule(:. What amo um should be recorded as lo�s on
•

1 l w early retirc111e:h ol the bonds·)

• a. 1 20.llOO .
/
.
h. J 7lUl00
· <.: . .U6.000
d. .J6:-'..ll00

a�
-
.:'9. 011 Januw Y I . :w 1 3. F. uiz (.\m1pany issued P8. IJ(JCJ.UOO of 8% nonconvertib le bonds I 0-1.
whid1 due on February 28. �02 3 . Each · P i .•. 0(; bond \\as is sued with 25 dc1achabk s h are
:m·

WHIT. a n ! � . whi..:h cntitle.! tl1c bundhuldcr to pun.:h.:sc !Or P50 one ordinary shure . par
�:1,·h or
,·n l lll· 1'2� The bonds 1vithoui 1!1c ••arrant::. would normali� s e l l a! 9 5 . On
January I . 2ul3. the
lair ' alu1:.· " 1 wdiaarf :.i!a:·e WL!.> P40 ana thl.'. fa!r •alue o t the warrant was
P2. What amount
slit111IJ tie recorded :is � · 1a:-.: premium from share .>Jarr;;r, ts')
.I. 400.0liO
" -l l <i.()l •ll
.. •t:•
\;.
•
7'.?0.000
d. 832.000

30 On (k�en1ber I . ; 0 1 ·_.. _ Rnn:·0 lo 111pt:i1) h<.iJ bo.:ds payable ul' P IJ 80.000 and i nterest p'!}'abl
.
of p:;7.000. ! f ! · r b011cL ::i"e re1in:r1_ on J:iiiU:.iry I ·2( " 4 . for P i . 5 30.000. wha t amount should ht:
�
rc·portl.'J a:> a i·Js� on r('l!l!mprio1f'

a. .1 7.UOU
b. 1 1 :Ul1�u
�·. 1 50.000
J. I 8 7J)i)I)

·
_, I . Un IJet:l.'lllbt:r 3 1 . 2d 1 3 Bo;-0c<h'·' Comi;an:, cported 9% bo nd s pa}ahle c.lue Decc:mht:r J I .
]0.:'.U ' ! I i 1 ; 08 i .UWl n,l. honds \.\-en- is�:u:-d vi; l .>e.:cmt>t-r"> I . 20 I 0 and have a face amounl uf
P.l (J(}(_,_(j; 11 1 .-. · : I i inir:: r :· t p::yab:,: :>c:!ii:Jtl!i!Jall ,.· ·J �1 iL!I:. ! and Del:cmher 3 1 . On January I . 2 0 1 4 .
Whet amount should be re ported as gain o n
the l:1 1 t i i y rdiw:J j> 1 _(111! : ,t.1()n : i f these 00r.ds <t t li�.
•
•

the r.:tire•l!l nt nf t !i.- ,,, ,r:j!'i i l l 20 1 4 ) ·

'.l. 1 · ! I .1)()(1
·�J.
I\. 4 7. 000
•' . .
.,
�\� .... � I .OOU
.. ... . '
• <l . 7.000
�.":.0
':;.
.

5:7 7 4
 . ...,.

. - ·

P:t�I.'

,\11 ::,i'v l L !1as

.·
·
_u1.:·1:...... rr-t:u
« ·" .ax
. a:;.seL ai.:co um v. llll a .,,,1111Ke �' , -'vv.U'.JU �..
. .. u .... 10 a
r1 1� 1.:nJ v 1 'tJ I -, ·'-·� •
-'-
�n;g�c-c�r.nu�a-tive tempcirar y d i ffe r e nce or P:5o . uu A! :hr e•11 of ::?0 1 .' . ih S ;a c:- _ �n��lrJ!:'
. .
l m
j1.1t:n: ntl h.1:-; increasec to a tor _0 1 1 �>
cumulative amoun• " ' p l .(1r;,J.tll)O . Tii.x ahk m�ome
l' l .?OO.O OG. The l ax rate·
i s 40% fo� 2 0 1 _; but e n . ..:tcd wx r21e 'or all future y ears i s h_'; 35%
probabk that 70% of amouni should be reponctd tor
the: deterred ta:-.•asset w 1 1 1 be realized . \\ h<tl
.let_erred ta:' assl.!l on DeL«::mb
er 3 1 . 2 0 1 > ·:
.\ 262.50(1
·.1. 2SO.UOO
�. 245.0UO
J. 5->5.00:l

a t c•d f ur ii1unr1 al repvrt!11 g :ma rhe ;;:.ssh

basis for incv�e
� ' Du nc n C'o µany used .he a�cr�1al me h
m
tax re po 11 111 �. Prolits o f PJ .000.000 ·reCO!!nized for �ooizs in �1i ! 3 w i l l he co l l c e
e t d '�" �5°.<.i ·�'.
an: l<•r _(J i ., .
20 1 -1 . P l .000.UOO i n 20 1 5 . and P l . '·00.• •llO "' .: . . u I ' ·� .:r:::: ..:: t ed 111.-. r:.i1c� 40%
. � expc:ct ed �ii :- e�rs.
3 5�.1,, for 20 1 4 . and 30U.-u t o r 20 1 5 r; nd .::0 1 0 . l .i.,.1tilt'. 11,;11mt: 1 in l uturt'

W ha l amount sho u l d be reported on De..:.:mber _:: i 20 1 3 .is <Jeterred 1ax ltab;lity".'

.
;\, l .200.000
b. 750.UOO
925.00G
.I . 1 7 5.0\lll

)4 . h�q!usc1n t�omµanv � �
the rn�1u1:i1 :·. / l:uahk temporar y differences :otakd
'
. re1 ale 1h:ll ::n..:l "toU.1;1 11 ·· un �le..:1:mb,1 J I . 20 1 2 . l h<: ta:-. r:itc for 2<1 i ) ·
P I J 50.UOO on l>c:c 1:mbt t 3 1 . 20 1 3 l
is.40%. w h i le the tax rale for future ye11rs is JU� • - Ta�ablc: income for .!0 1 3 is P2.400.00
0 and­
lhen: an; n11 p1:n11a111.:m cifterem:es. \�'ha1 1s lh.: pr :ta\ linan.;;<.: · 1K·Jme lur �'.I.I I )'.'
I
.l. l.7 50.000
h
·..:.
2. 790 .00(1
:! . 0 1 0.000
·-
J. 1 .050.00U

:.� Pc:: mh1:r Company starH·J busim:ss 111 201J7 b _. 1 . .u 1 1 1 � �LliJ.( 1;r) 01 d1wn- . shares 01 P20 :>..ir !·�·r
P 36 c:ach. In 20 1 2. 20.000 of these share� m:n: p>.·:·..:: nased for P Y � per sh a re and held as trL•aSlU')'
.;luu·t's. On .lu nL· 30. 2 0 1 J. these 20.IJOO snares 1 1 , 1c ..!\ch::.11!,_!eJ 1or a pit..:t' of properl} tbal had
.11 1 assesseu value of P8 1 0.UOO. P em be r " ' $h<'1e� f l' :11.: t1 ,·eh 1rad1:d and had a pr;ce of f>60 fair
.in J U lll' .�O 20 1 3 . n1e C' lSI me1 hod is usi:d 10 �l(I.. u:ll for lr·�asury shurl's. What is :he am<'Vllt of
share premium from 1ret1sury sha re transa.:tions"'
•.• .1. 800.UUO
-
"
h. 4!\U.1100
'<l0 .UOll
.I 1 1 •11. 0ll<l
. . . • t:•
.
• t1. Grnnt C'0m pan y had 40.llOO 1reasurv shares !\'ilh I' I 0 pur v . : · � : : <!l l Del-.:•nhcr 3 1 . 20 1 :! "hi.:h it
0
.1cquireJ a: pe r share. On .lune' � : i . 2 u i: ; 1bt' emi11 , ,: s 1 1·,'d 2 ( • .liUi..1 1 reasurv shares 10
Pl l
�mpln�i:t:s who exercis·;d Oj'lil1ns �111der :he 41'·,
''t ·\·ce slur.- • : r i ion ;, i;11" . Thi: foir \'alue pe1:
�ha re \\:lS 1' 1 3 on Dece mb e r 3 1 . 20 1 �. p 1 :; 0 1 1 :.i t 1 1 J t'. .10. 20 1 "\ . ::nd P l f< on D ecember 3 1 :!IJ D .
fhi: share ·.) pli\HIS h:id l'een granted fo r !' I :: �..:I )hare . r r..: 1 • • -�1 metl10J I S used. What i s 1he •

balance uf : he 1rcasury s : 1ares on Decemb�·: � t . ;:: C J : >.-,

.I. 1 40.IJOO I
I
b. 1 80.000 I
.. 220.oon
j. 240.l)Q(I I
I

: - . Mnsterson Company h d 420.000 )rJinar:.· shar�s

Jf P 10 p:i� ,·:� ! .;1:.· 1 1uts:andiiig. . During. the } ear.
� �
�he enlll� derb1ed J )0 •• share d 1 v1JcnJ '.\'hlf l
Ill•: :1 1:irkL'I 1': 1 �� or 1 !-.c sh.;re WJS P36 Three
r:1on1hs !a1<·1. !h.: entity ,lcclare<l a PO 61 1 11e• s ,. ". . · Jsn' d:• .'. ,. ...
-: ,-11...
· .-,. . n:� 'J I t 1 • 1· t h1:.' d.1 \ ·1 <lend s
" s .1

-
. . • � �
•
• i.

i.
.
.k·dared <lLrmg lhe yea r whal is 1he Je� ..:ase 1 ! . 1. 1111.:d
1 1 1:.·ar : ? t l'·.-,·>
j 1 .020.60 0
J. 75<1.00(1
i.:. 2 M .lil ll l
J.
i
252.ovu I
..
. i .'
I •
5774
i

.. ..-
···
--- .:..". -_,-.s�
.. � .-
....
-· ,
.
 ·.

' I Page: 8
\ 8. /\ 11a1,;11.i ( 0111pany ofk cd all l lJ,(J(JO cuiplli) ci: ·11ic �1pp111 rur•1ty tu parti d p:1it in an
cmployl',c ·
ccs arc i:nllllcd to purd1a �c: I (Jt1
skarc -purc1111sc plan. l Judcr the ll'nllS "' ' rhc pla11. 1hc c111p1uy
I i 11 : pun.:ha ·.c pnn: n111..,1 t:1.· paid
1mli 11:iry s:mrc:. w i l h par val ue: <JI I' I :11 .1 211"!.. d1�c11un
•
1
irnm cdiutdy 11pn11 ;ic1.:cpl;i m:c: 1 1 1 the: o l k r. 1 1 1 1· tal. M . '\IHJ .-1 1 1p!oycc.'i al·n·prc
d till' 1 1 l l•:r.: a ml • •

_
cm:h c11 1pl"ycc purchased au avcrlttJc 80 :;hurc::. al 1'22 r�·r �haw whe11 niarl-.ct pricc
""''" 1'2 7 . :io .•

• Wl11it 11rnou111 ol compen sation expense should. h1: rl·ccmJccJ'.>

a. 1 8.700.00 0
'h. 5500.000
l . ·u110.ooo
d. ()

l'J. Lcrncr C • J tnpany had 200.000 ordinary �ar.::., W.00 0 1.'.0llWrtibk prt:fcn::11cc share�• . and
I' I .IJOIJ.OOIJ I 11%1 convcrtrblc bonds 011rsta11d i · g during 211 ! ) . T he prelercm:c sha1T:, a n:
co1wc11 ihlc· into 40.000 ordinary slran.:s. IJ1 1 1 i 1 1�: 7.0 1 1 . tlw i:ntity pai .1 di vidend� of PO lJ(J P•�r
orcli11ary 'hare ;111d l ' J .00 pcr prcfcrt:ncc share. L.ch I' I .OIJO h•. 1nd is convcniblc into 45 ordinary
�.l1an:�. I h : lll.:l inconw ti1r 20 I I ww l'l11JC1,f)(JIJ ,lfhr llw :ux rate was �()%,. Whnt a m o u n t :.houlci
..

l tl' rcporl1 ·c l ;i� l i l ull.:d l.:.1r11i 11g-. J ll.:I ·.l :arl· · •

. . ·1
. II I
b. .!. . ..!.) . . ' lil
t
l.' }. ) )
d. 2.4(1

· Ill . < 111 .lunu•11 y I . .'.0 1 2.H cdrnoml LJ111pu11y h•u.J hdu-1u-111uturity i 1 1 vcst1111.:nt 111 homL -.\ 1 1 h a
.1

carr yinv umut11 1t or Jl7()0,(J00. 1 J uri1; g the year 111.' e11tity ul·tcrmincd it w o u ld nor hc ahk t o
rnlll.:cl a l l wnrrnctual ca:;h llows and t h e bond , have Jel.'re<ist:d in valuc t o 1'600,000. l t \ntS
<ktcrr11i11cd that t hi s is a !permanent loss rn v :i l uc . IJuring 2U I J. e v en ts and cc o 1;om ic conditions
l1uw l.' ha 1 1 �cd :,uch thar t he impairment los� ha.� det:reascd. ·1 he fair val ut' o f the honds i�> 110�'
1'7()8.(JIJO. I low much ri:cov1:: r;1 of i mpairm•:m l<· ·;s -.houlcl be: n:ported in the income statement
li1r 20 I T!
a. I OX.0011
Ii. I OU.0110
c. 8. 0(J0
d. ()

'I l . ·1 lte eyuit1n; o l Gocbd L'ompany and IJubbs I. (ln1pa11\ 011 l kc•:111bcr .� I . 2Ul .1 arc:

G1.'obc l Uohbs
1 .) 1 10.000 :? .2 ) () ( )()()
�-il ta 1 t.: rn p i 1 a l ··- • irdimsr) Ii 01Hl.�J()() ') :.:i so ( )( )()
l{l.:lai11cd ( arni11g� .:I . 5 00. fi()(J I .20llJJOO
I
•
•

< iod>d ( u111p.iny •ic411 in.:d ;1 IU1'l. . 1 nl1.-rcs1 1 1 1 1 J 1 il1b-. < . , 1 1 . , >. 1 1 1 -. un i h'u:1 l l hcr i I ''i
-· l l �
·
l 1 \ ) 1.
� l!ul>I>�
• . •

l '� - 2.'i.U<H1 l.Jmi11g 2< 1 1 4 . l u111 p<111y , 1 1 : u n ..· � 1 1 1c �1 1 w· 1 1 1 1 ' 7 :'i u.uoo and paid ,1 l.'.<t»lr
: .
1fi. v1deud 1 1 1 I1 YJ0.000. What 1s the clebrr balanJc 111 the Egu1ry l n ,·cstment ncrnunt nn Ot:cemht.'I'
J I . 2 0 1 4'!
:1. 2.025JJOO
h. 2. 1 60.0()() I
•
c. 2 . 2 2 5 . 000 ·I
d. 2. 1 75.000

42. Lod: dt ( · Jlllpa11y prov1dt:d the following data e:l atc<l I<> the p1:11sio11 plan.

Ucccmbc : I , 2 0 1 2 Oeccmher J I , 2 0 1 3
Dclinccl h·: ndit obligation 8. !1<J. O(J(J 1 1 . 1 00.000
09 . (11 ) . () ( )() 9. 900.() ( )( )
f'la11 assd , :ll lair value
Net <JC.:tua1 ial 111\S I . 41 l.000 I .SOll.000
f)i�.count ratt· 1 0%
1 X"li1 7'71.
1 :x pc:Ul.'d 1 a lc: (JJ' return

I lrt· Clllltt i hutwn was I' 1 ,260.( «JO in 20 I > a n •J : vn.:-ti t :.. p�: i d t• Haled P I . I 2 5 .000. Wha t wa s t he
1l lu: 1 I n·1 1 1nr < 1n plun a<; · ,ets 1 1 1 :'fl I :1"
• .
' •li e
d. './{J(J. (JIJ(J .
.

·' "/6S.OOO
(1IJ() ,()I)()
'I. 46'.i.O IJO
• • ti

5774
 -,
I
-1 � i
•

.
l';.ig: '} . . .. f i
"3 . "\�:-! COOlp.m�
.
•

. r�n� on �cem�t" - i · - .. . . •
- .r ilic c.ar:ying
:: �, �-.��t\Jt)O ' '·!l L» · ·· ·--�ts • JI "6 000.000 and liahilities 1of
· ·· . · t
a.'llOLL :.; �-i.:l'r(" •:.�It: tair valut. except tor land. which l1as a
[ .
.
__
.. -
.:· .. \"ilu� th.u 1c - P400-V\. r.. ' o , rt •
E?:r�r t.ha.'l .: a;n. Un Dec ember ) I . 20 1 3 . Egbe
•

··· 'moam n-.:j Pt 1 •.1» r.,...,,-

-
" J ; n c-• '.!:nfont.
c
: r- u�
• •

· vv.\1\1\, ro acquire !: 1.1tt:t \\· t-. ,,. :i1.:iunt of �ooJwi l l be e a

� ·.. · -;hould recor d d ·
· �h N this purc!use?
.:. 2..6(.()JJ()c i
>. 2..200.00I)
�.
WCLQO.)
.:!. •
I)
I
�· i;e�· Comp:m� 50.0JO .lrd!nan· sl· "�es 3 :: h;ir.zed with P I U par value The foll(mihg
h3S
:-'.:illS3c�iO!l!- t-.)O).; J'la<:e dwing :Q I �. the 'ir<• '.'e.lr \' 1t:e emii)'"S exi stence: i
..
��d :\.(AA! ur.:iinary shJ.reS !or P l 8 pe1 , nar11.
b."-u.:-J S.l >00 vrdinary �.hares in excb \If� {c� .o p= itent ,·alued at P I 00.000 . I
• i
\\ hat '� !he 1t•ul cc.ntributl"d capiul al ) ea·-�nd..
•M () lO
::- <.1. q.-.., )U
i i •t · t•-.•'°'
• �•.l).. ll_)

. . ' ••:•
4� i-.. o:singtoo Compan)' rep.)ned
:, : .'K)().OlXJ. The i·.:.llo""'�
net in:on:e
worl\.ing �.lpt:;.l
Gl.�.:;_.-iW.000
:,cM : :·· 1 .' ::hanged:
in 20 1 3. Depredation expeftse ""a.s ...

.
· " "(X)unts rec6vat-!e I . I 00.000 incr-:<1»<'
"\. ,;l�tr."kling. eq..tit� investment 1 .600.000 increi;e
.. : \ ..!j\{()f'.\ 7.)
"'0.000 incr·�a$<' •
·, .:mu-.iJe oot;! payable 1 .500°.00Q i ncreast!
'.e<X)<:nts payable 1 .210 .000 incre:i;;e
· :1dtt the mdirec: �th0l1. what net a:nou:· ; f ;' :• . � : . ·. :��ents i� required Ill reconcile net i ncom � -
: . • :-iet .::l:>h pnwioed b� Op.!ratmi; ac!1\ :!:�
4.'1'.(l.(){)t J
I JIS0.000
l .�.000
� 1 0.000

C\ ·mpany reponed net cash :1;.,. �ii'm ·�::rating :ic11v111es ti.ir the current ) c;u': at
4t ·
:
...: �r
: .'.':11 · .t<ltr fr.e followin:>. : 1 em� an� �IS•• • :::o onrd 111 '.he.- lin11nc1a l statements:
.
'l :�> _, ·. 1� 1 1'.i:. p.ud tlO ora111ary shhl",. . �00.0C�O
i •:'•pr�-.: i.-it1<' .1 an.: amortiL:!t1oq l 2(J.lJl: O
1�-rease in accounts receivable . '
240.0ll()

'" h:i: \'-".:\."- thl" oe1 in.:ome !or the .:um:.-; : ....

... ;;, j 2l.l.000

2.�).000
"2.640.000
- . 2.:'60.00tl
. .
-4- ;�;1le� Com!):my has four : e�men1s " i!h t!·. : !ll\ ;,i.,·. ; , . .: infonn:.11iun:
. .

�mm1 Touil revenue :•,·<'fit � i: ss) Identifiable assets i

�.
:\ :· s: .ooo ) '-· . 1(. -)0<1.000
R (·00.000 :' 5 .l it?t • • 800.0L•O
t � 25 .00J ·'" :(:. 450.000
D 90.t:i)I) 4 . · ;( . 2:25.UOO
.
.

i:,)r whi<"h A thi:' segmrnts would infi'rm;.!ii,1 . ; 1av<! l\1 he disclosed :n accordaace
1
.':-�,��:,, ul nror.-)wtccmcnr:
' �q!m.'nb ..\. �. C. Jil• S
" th

�:."'!n�e �!. .-\. .t

.
: anJ t.
'\(-�ril<!n:;. A :;::d B
.i �ml:'ntoi; A and D
.
 .. . . ...
l 'aM•' , I II

4:\ . \ ) n l,un1an i " · �O ! .'l . ' :ui\·,. , 1,. ·1, 1 1 1 1,a1 1 , p.ud � l l · l'\'l'I\ la.\c· � 1 1 1 1 lh\.·1111 \ 111111\l i l l� h11 tlw , i i l ,• 1 1h.r
1

Yl'ar .' O l � in :hl· .un"llnt ,,r l' "<�t · .• '' . 1 11 1 11, · 1 i 1 ,, " ' ' ' '' , 1 f :\ pnl � I l l 1 . 1h,· 1•111 1 1 , , 1 11111k

una11ii1·ip;1tl•d mnjor l'\'l>nirs , ,, p:.; 11, ··11Ui 1 · 1 ; 11·111 .11 11 \'11�1 1 1 ' I ' I . 'll)(),1)111 1. 1'11C'�n· rrpnir� \\ I l l
lw1wti! op1•r;\t1\ll\S for t h e r�nwi ndt•r t'I t h<' 1:ak1 ,1,n yt•m· . \\ hut h ' l n l n111011nt l\f' thrice' c , pc11,.�11
•
' •
. : . ..... slwnld l'c rt'p11rtc\I in the scctJnd -iuaner <'t1di11� .hlll\' I ll . . W 1 i'.'
•
•
•

H. : .t14tHl0l)
b. 1 411.' l\l(l
,.. Mll.1lllO
,I. 5 1 :i .0011

4•). A itd (\111111:111' . •1•1'·l·u�1..· d' a 11rw 11111d1illl' 1111· l1r1.0lll>,OOO • •ll
:1 :c. ;,_w ,, ( 00k1· 111·1,.11i1w-

Januun I �1 1 ' _; _ " iii..:! . '' ''s k-.1st· d thr .;·11111· d

I l l 111h1th1·r 1 · 1 1 1 1 1\'. I he.· 1 1 1n d 1 t 1 I\' 1� dq11 n·111tnl
"
�
.· .

;
l':i:il1.tio11 I ',.: ' 1··11 . l l w tea�·,· is 1;.1r :1 lllll" ·"'"1r ,,, n,1d t'\ f'i nnv .1i11 1111r� I . . � t l I I .'1111d pn;, i1 ''' li,11'
:
annual 1-cnl:!I 11ay1mnt ,1f P 1 ,000.UllU �t·�i1111 i 1 1 11 .ln11u:u y I . ..'111 l /\uditi 1111111ly . l l t l' k�1sn· p111d
PMU.000 11� ti . . k�::...:r . : :- .i l c-nse b11nus. Wh·11 :11m1u111 111' m·t l'l'lltul l'l'WIHIC slt1111ld Ii\• l'l'fWlll'd
on lhl· k;:·;1.•d :''Sl"'I t\1r : n I ,._,
a. I .(\ 1 hl . .IOI\ • .

b. l, 1 <>U.0UU . .
' .
("_ ( , I 11_,_l(l()
d. 4 �tl.1 l1 llJ
.
"'1l. Beal l '\1111p:111� prvvid.-d the followi·ll! i 1\\'Ml� \'s l dt't'rt'llS��) in 11t,· state111c·111 1 1 1 ' li1m11d11I '
posi1 i.m ;w-:uun!s 0 1 1 Dt·eemner 3 1 . �O 1 1 ·md �n I , .

t ' 1-;h nnd ,·ash l'\)lli\·ak· 1 1 s 1 .:11.0110

• Av:i: lu�1il· li1r sak Sl'l.'Ul'llit·� t O l U lOI ) Ill
.'\n·nu nb 11 :c,•1•.1ab k. 111·1
0 I 1 1 \' :111\1 1 ) IW.0110
I ,mg-term i11vt" . 1 : . 1 · : 1 1 • ( I 00,l�!lO)
i ' I ant as�eb '/()(),() ()()
Al·1· u 1 1 1 1 1 la 1 l.'d 1ll·prl.'• 1 .l l 1 •ll

:\l·i:o11n1s pa , ,, ; . !, ( ;\ OOl l J
I > i v idend pa�1 :1h1\· I hO,O,)(J
Sh11r1 -1crn1 b:•1::, d<'lil .1 2 \O(Hl
1 . onµ· lt•nn 1i ·hi 1 1 0.1100
Share c:1pi 1 a l . I' I l l i ':lr I 00.000
S'1:1r1· pn:11 1 i 11 1 1 1 1 .10.lH H I
l.:1·t:11 11l�d 1.'. 1 n t 1 1 i,:· · . . ' •I•• .!'W.000
Net i lll".1111c for the year wns P79< •. l l(JO. P�00.000 wns dt!t'lurcd .' l hiildi\ll(
t'.M: c i\' id�nd 111'
1.·usti11� l 'o ( l l l .llilO nnd w i r h l':1rr�·�nr UlllL' llnl 1 ) t :-'.l:iO.l l OO wus sold l(ir l '. 1 5 0 ,000. 1-:qu ipmclll
rns1i11� 1 1 1 1 O.OOi\ wus ar quirnl 1 hro�1gh 1:;su1111c:c • · ! " ll1 .1g·tl·rm dd1t. /\ l on1_.1.· 1 1· r1 11 i 1 1 vcs1111rnt wus
s0ld l11r P l l -i.0\10. f 'ht•r: \Wrc 110 1>1 l�t'r t ran-;a1:t i 1· 0� afli.·ct i 1 1 g long·lt·nn i;1 wst1111:111. Tlw shun:�
Wt'rt' is�:wd 1; 1r .- :ish
.
ny opt't�tt i n� :ll't v i t io:�·i'.' .
t. V 'h<11 i:: 1 l 1L' .ll'I �:ash f'W\'idt'd
.
.
a. 1 . 1 ot).( lCll
I·.
(.
t .0· 10.000
9.�0 .00l )
..
•

, •

d. 70 :" .C . I I '
f>

a. 1 .00 .'1 .U\I : I

h. ! . I <>0. •'11(l
l' . ! .�? ·.: c .(:{ 10
d. l .\iOO 1 1( • ·

. .
:'
"- ..'05 .000
\,. I ."O 000
.:l .'l ()l)(l
' ·� . ll . _I() ()1 )()

-� E l'l D
. -�.....:.:;-::.: _ ,.. __ �. 1•
 ..
-t
/
. . .
'
. ;

1\ J t. • 1! · . d h l•l l l , ! P l'INE:.�
• \1anila '

\' ·, \1..:TK'AL ACCO lT N TIN SIY VALIX FERRE:R

'
U I V/\LIX

i · C.un-ent assets
��a.sh �n l-nnk.. net oft,r induding bnnk u1·cnlr a l't
\ 3Sh ll\\.'IOOt'S I Oll, p1.·tt� cnsh voucher� !l>:· ,·\;.,· , . . , ·:-. ;Josidated 1:ustomers' checks
·\..:.:-.,unt� �..·1.• i, :ibk. 111.·t , •t' l'l" i
nd udi ng ;: 1�1um1."r' · acdit bnlnnccs
\l:'\'i.' tt:H� re-.·t:i\'ab k. i n\.'hd in� ;
sellin\! pr 1: . · :�:·:�1 . !· o ut on t:onsignmenl . ..
; .
>'t'll\-> i�ci\ al>k, iilduJi1 11! note rt:t:eivnl i 1 1· d i�.t:lll :p ,,· I
hn:m,ial ;•�N ht'ld ft•� tr.idin� n� rn·nt .1n w:iilllble 1'1 1r sule 0r investment through
, _ ..
OC I ,,r r\F� - nonrn rn•n1
'.'rqxliJ exp.. ·nse�-\.'llr!'t' nl .ind Jeti!rrcd l:kli ;;_<!s-11111 "llrrent

·
' urn'nt li:thil iti,·s
.
.
••
' 11:•
.\ . .:counts payable. net of '1r indudillg debii li ·.iJ{ ltl c -� in creditors' accounts
•

',,,le p:ty .1l'k Jut· w ith i n 2 1111mths rdin;.i11-, .:r. uu • . r before end of re p o rting period
I •
\ ,'t1.· u.1, .1b[,• dut· \\ ithiP � ll1l'llths 1\· � i ram:ed a f t c · t h \! end of reporting period
; )
'- 1.' l" ,:1 :ibk· l!u_- " i thin . 2 llll!lllhs a ;,._! '.Ill' e n 1 i 1 � l u s discretion to refinance

3. l ll ' I n·dussith•\I to p ro li 1 or loss - 1r:11 1s1. 1 lit>n. de : , ,·,rnves as cash flow hedge and AFS
OC I not rl•d:issitied - n · n l 1 1 . . i 1 • i surplus. remeasurements of de fi ned bcoefit
to profit or loss
·: t.m. �·,1uity ill\'l'Sttm•nts design:ltt'd :1l •:\ · !" • _i:_·I .lld change !11 the fair valut: altributable to
rrCllit risk ,·.f .1 li:1bi l i t� tksi�11att'd at l· ":.. l l ' L
-
i l ' t i w term i� " A. F : � . the OCl is r-:: : as.;i · i,·. '
.
\ u l\' · . 10 pr o !i t or loss .

'\ oncurrcnl aSSl'I h e l d [t1r snle 111\H·r h:: : -., ·;.-: 1 u

C;ll'r y ing . i m::i nt and fair value kss cost of
\I
-

! : s�'l<)S. \�11,·urr1;"11t a�sc i ildd tor :>.tk r·::l I '.O P!'E ·_ lower bctWt:t:n carrying. antuttnt
s
. . · , , 1 1 "·

.1 � unHll <? l\\ll d:t�sitic·d ,\! h.:l<l for �.tlr ath. 1 .. -c.i : 1 .. 1:1t umoun1.

l)i_�continucd opcrntion - vpcrating i11':unic ''" oss, gain 01 loss from disposal of a">Stjts. •
·. .:-nnin:ui,,n <:t•st �:nd oth.:1 ;;: :>.pc>nscs d1rec1 ! • .. t ! ! 1 h u 1 .1 r ! e tc the cLs.::ont i11uance.

C h:lll).!l' in :1n·ou111in).! \'S l i m a i e - dwng<: !'. ,, ,,. 1 . · 1 : 1 c'. residual v:ilut> and deprec1atiu1l' mctlll>d
. .
\. h:tn�l' m al· cou n1i11g po li e�� - ch:rngt> ii: ill' "" , ,1 ::· . · ni•:tliotl. :.:o�t n:cove1•y lo per.:enta�i tuf
�,•mpletion. cost model to revaluation modi:! . 'ct• i ··i' f:.iir valut: model for investment p:oper':y.
,·�i:mse to n..:1' p0licy :is r e q u i red by nc" ! ' F l : ''

6. Re1\ort:thle •t•gm c n t

'.::- 1.:'<!lll<.:lll int\:"mal and extern•il revenue 1� l t •� u c" 1 1·:·Jrt: or in!crnal and external re ven ue l)l�!i •

segments

�gment protit 0r loss i-.: I 0% or nwre 1h� -e.n :1tcr between total profit of all prolitable
•

se�ments and tvtal loss u:' unprofitab1e sc-;:mt:.1!

:'�!!men! :issets are I 0% 0.
i
more of the 1 )t:: : ESd�. '· : . .II segmenl5.

l n rcrim reporting
\ ! locate rea l pruperty ta-.:es. yeur-emJ b . :h1::,c>.";. ·' :·, ·reciuti011. 1 11surance, major repairs a."l<l
,1thcr ex p1:nse.s that benefit the t:ntin' :- c·H1� \ 1 > 1 alloc:lle g•'in Or luss un disposal of :1SS!t.
tn t
.: ! .;c,m i ueJ v per..l io n . ad' ertising. in v en l 1 1· � t
\'. 1 11·.' down N rl':versal

8. l' :1sh - · ..:t\ins anJ \.'U1Te:1c� . petty 1;ash, :h.:1 !.. i 1 1 � .ir dem.:1!d d e pos i t . customers' checks.
:·,'�onal .:hecks. man.1gcr's checL. :e:· t i 1 i,·,1 ;:hecks, ir.0ney order. travdl!:· s check,
. 1 .:.:li\ .:rl'd u'lll(':my ,·hc-t KS. postdated c·. · . : : r . : · i d<s d::liverc"': . .

' . ·. � h tu · ,:1e pa) llll'll1 of habilil_) Ju1: 1 1 ulu:i

1 1 111,: -. u c vc,11 ·
J - .._ H
-. u rt'�1" !
i,.' :is]l fund for the acquisit ion of noncu rn· 1 1 t :1'\�".:1 .� uncurren i
•fl•

<.. :ish l'll llivalen ts - treasury bills, mont>y , , \ari..:t

.l!�ll time de po si t with maturity of 3 months or•
.:'� from rht dalt' of purdrnsr ·
•

5776.

.i
... _ --v..

--'°' �Y- r
·-· - ,...-
..._. .. .- -
. �-��-, ,
. ._ .,.
. ... _ ... . .. .. . ...... . .......
 �
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l
l' �
f
. ' Page 2
r ·1
�. 8*at n"<ODrili:arion .� �'
\•
'
charge
�� � �& - � .!Vlc: rccc iv&!>K •ullcc1;� ._� l�tk mir.u:. NSF and serviec: !·
.. �- �:i.: - 3lirl deposn in :ran:;: 1 . m:nus i'u;!.laJl<J in:; .:-hec�. �ertifitd checks an: no
ful.m."X'
!-.'El�"'� '':J:"Sl.l:'!J::\�. ;_<..
i
�V.·.�\tteHts tttti':ab� - ocginni�g balan� pl� -..: -�dit sales minus collections, sa les �iS4.:ot.1nlS.•
•
r
Xll� R'l�ff-' .ll ·.-: ..il:...�w .:.lh..'CS :ia� \\r..:eo1: . 1
�
from
•

�<."\.'..: \ � .'f ..l,'..x>cr:ts �ore. u;iles:? !nc;ude .1 i.n collections in thich case deduct f
I
,-,,;\�lk.>.. l.S-
I
'
f
'

�
,.
I .
I
:- m"7."m !:..� ,,:· .;,.'.:I.".;
: - �-<>uN.t-._,, �.::our.ts e\oen� I
.\11.)"�n "' ft .. : J�ub•id �('('UURtS - Alh•\�4Ul� t�ginning rlus recove� '
and doubtful acc�unts
:.\.;'<-"ll.."-.' tuiu� ''7'!(�•!1 �u:.b :.ll��w:m-:c �r;<"!ir. �-

� .i:�,:- j;).::! !-.'h.1� dirr\°:t ,-.ricinatibn cost incurred m1m1s

"���uttm�• <lf lu�n r�-cei\ :lble - - '
�;i ·.� l, :
, .- .: . ::, :-::>: : ' ·· ..: : :-: :r. -'':-L ··.,-::� lnJsn:: , � !� lll:li i c : i - c-\pc:11s�
� ·JSI is uutri!.!hl
of ca.5h inllows
•

l•�nnC"al - Cai-r; ii;:,: mxium of k�1r. :��i�able minus p��t value

of l�n .
•
0
U$!:lf 1r,... 1u"i�in*I �lf('Clin r.ate.
: .: . Ass�nmt"�l M �C'counts �ivabl�
Am,':.:r.! ...�!'! ...\:!.:-: m inu � �r..:.r.,"-" .:'.h2rg0t or u:.m mi°'.'> -� ('n equab :;ra\":ee<ls
•
••:ll C1l>Oll� \,[ ..\.'C'O UD($ f"n't'iV3bk • •
·\ -..."\.\.'-'
. nlS �"-ei,..>.t-k minus 1in.llk� clurgt. Mi.:11 •3':� and inter�• equals proceeds. If inte&·est is
�'-.'\I ,-.: ,, ,-�httJ :l\ C'!':i�C' 10 m�uuriC\·. u�e :.b:- J::, s.
I
.
I• •

"o'" n"n'I' ;abk dr.-C"\iunting i

!>rm�:i;:u! I us :tt·;-1.-� -� ""J.ii:> m:it1"rit: ·.-.uu.: . : l ! n � � ..i.s.:-uimt c...: :.ials prlX,�eJs
)�S\-'\.'l<:ni ��wl:: :lUl�ri!� v:llUc! tin�s dis.:oun: r..:i:: times di�c�unt periJI. I
. .
\. .l..il}ln!! �m,"'2:;( ,,f :�01.:- ��iv.Jbe mi�t:s �n ...- c ..- j� �·quJis !.!Jin
- or loss ',,) 11 di�ounti1wt:' .
•

i 3 . lalC'tllO�
f\)H s.happin� ;vim ,)r · uB ��!a
�UH �io.ui,· n •'r Fuil buyer
\.t._,>J:: t•u. ,,:� . .'n:::.�::!: . .:-��i ..nJ �-x.'<is hdJ ,·.. i " i � : '1m:1ell .

.ti..� "'" �� i'� b1H ,.( :��i n� �1hl uust ��ipt .t1.�p'tcd by buyer
i°lfl) f"-•r._�j.: :U':J flf( I �f!..."t!�I
�\·\�i�h�(.-J �•'-a.:�� - 1-..;�; . ...'.:i.: �nJ �ov �·:,; �\\ c;'f"..\ti " - �rpelu.'ll
. 11 .�.I 1· . .
'
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'° t\. �-� .... � '. :; �un1 : ni ::C'. u•g !)Tl\:C' mHw:' .:.�,,! ! . i ...·,,mµl�1c ;.111J .::ost of disposal
Afk-\\ ;���· mt: . .-..J ,,r I· � merhod t'

. .;_ �ru::.s ua-vlit mc:-•huJ

• (.;,w_, · ' ' .a.1t-�.: ;�·; ::;;: . : min� ��'SI {,( ��'l<'>ds $•)! �1uls ending inventory •.

1.:-..'--;i \.� i" �" 'I,,�$ :;,,:J ��-· · · : :: .--r: �ks unu.� Ctbt r:1lio or net £ales djvide<l cost rntio
ces
:\'C'C �ks ('QU.l :. �:-_,:;._.- �k-; m;r.l.$ �•a!e::- ...-Lu; ,)! s.��t's retl!m an<l allowan
l�thu;.· �k:' .J:-:,.:"-..' .tnb .m-..i saic� ;iUv\\�;;c:..·�
.

f.

5776
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•ii' !

Png� 3 ·
11•
· 1; iolo gic al ass et
' :cti11 from 1.. han11e
•
·
c- 111 t·au · . .

vn 1 ue due 10 g.1 1 1\\'l h i > : · •:·ic<.: ;: i a\ll\!.<.' 111111 11s lo:>s I m m change.: 111 tnu·
. . •

v,1, 1 ue due to h'll'v

.
'
f- a 1 r value o f ha rvc · t
e., .
..1 01 pncc change c:: q u•lls
..
·
· . .
n e t 11 :d n from l 1 1 1 1 l 1;g1cnl ai.sl'I
s is · · a 1 cost o l inventory anl gni n 1'ro111 a�ricultu rnl p1-.iduc ..:.
· l· llllt
( 1 7 1 nnst mcnt
P,\S J'J
l·k ld 1i.1r tra d111 g 1 1 ·Id !'or 1ratl 111);!
.'\\'it i IJl>l e for 'ia le 1 ; 11111;ial as�\:1 al FVT0 1:· 1
l·l1· ld to m a t u .-ity
Li111n� Hiid rci:e ivab le
,,
Trn11sa ctio11 costs - c x p c·n sed foi lina:�c·'.:.i! :i:::::i lwld hr 1 r;1lii : , g. nnd c:i p i l :l lizctl for A FS or.

.
,
I
f1 na 11 c i a l asset at F V l ( 1 C I and ti mnll.: i a l a '\'..:' ; · 1
i\ \'ail;1 b l c for s a l e - dc�i . · iiatet! · oi n:.-. i d u ;d i i . ,1,;., 1.ti
1:·\: u 1 1 i:-1.:d ,vii

<l'· ., h o t ltcr 1 1 1 . 111 he l d li.n tradw1g. HTM

:.
rnd lua11: , and n::ce i v; i.ik . l st::m:ral l y 1 1 1 . 1 . 1 1 tc 1 1 d 1 !I t u ·..: .i•. ,ld i l l th�· 111:u1-. 1enn nnd \VOtiliJ be
soltl wlil!n need arist·s.
•
· • 1

l• in11n ci:il
:1sset :ii F V T U C I _ designatco 11.,.�, 1,r;•ht� 1 1 11 .
1 1 1 ·.-·:· 1 1 1 t' l ll i 1 e q u i l _v i 11 s l ru111 c 1 1 t 1 1 0 1• •

hcl d for l rn tl i n g
.
I · a i r value option - dcsii!nntl·d irrcvuca b tv. '-" ' ..: n 1 1 ° t i le :imonizcu cost rt> q u : n.:mcnt is sa1 1 s tied .
·
·\ n y changes in foir val1 ;� u re inclu<le<l 1 1 pre· : ! ! 1:· ; h):.;�. . T h 1. , is :1ppl ic,1bk lLl i 1 1 vesl 1 11 rn 1 i n
h o 11tls a n ti o t h e r debt in�·cstment s
•
I •
•

I· i n a n c i a l as·;t'l at amurt i z �·d cost l bond">) - · heiJ ! . i , cullt'Ctiun

l·,i11arn.:i;.il as:>d al fair val Jc (shan.:s) - not held i ·ur ' ;.i lieclion

1 " 1· ITcd i n i n t crc·st method

1 n tcrcst n· ccivcd cquab ! ::t C I! v n l u c 1 1 1 n e s 1 u11 1 i rlal ;1tc
i n t erest income l.!quab c.1rrying �1111 oun t a ! bq1 1 1; 1 1 1 I!:' l l lll<-'S e l fcL· t i ve rat.:.
-
i hL' d i tl.:: 1 ,·11cL' llctwc-.:11 1 1 1 11:: rest reccivL'll . n i.1 1! tt'l'L'!>l inc111nl:' �qunb discount or pnm1ium
;t11lllrl ! l.1l illl
t 1 i snn1111 a11 . vrtiz:1tio11 inn·cascs carry 1 11g amo•:n1 : 1 1 lll 1nti:re�1 i 1:con1c
� >rc1 1 1 i u m a11 1<>rti 1.atio11 decreases curryrnµ :uno11111 ,.;1J 1111-:: n::'.;1 1m:ome

I' I 1 v n tllll'lll iu a - ·.ori:t t •·

� ..1rry111g. a111ount equals acquisition cost plus .slrn "• in 1)et 1 11comc ·ur •IRltcs1ee and excess fair

,·atuc minus sh:tre in c a ,;h d i v iacnd and <1mm·1. 1 z.·. 1 1( r. oi e:-:c :'' •J l •.:os 1 .
'.- \t:CSS O ! ' C0�1 a t : r i but;ibj,- to govJWilJ i.lnJ l:;iij i:o. I u '. 1llllUl"[ii'...:d
l n v es1111c111 in-:u.nc ..:4u;.is share i n• .net : : 1'-om.: u1 · 1 1 n e:;i•. � plus 1.:.xc1;ss l<1ir \'Jlue minus
:11110rt1zat i · rn o! exc.:ss , ( 1:0�1.
1 11\'Cstmcnt in assoc iate in s t a ges - f a i r . :du: ,, J!d i ; 1: trl·, "i ll'i co�·. , , f :10.:"' in terest 1:qual �
total cost of in\'cstment ninus carrying .1mou111 . ,r rn:t as�e : �; :.cq•.1 i red -=quols e:-;cess of c.:051.

�1. l n ,·t:o.t mcut proper�

·

JnJ <1!· bu i l J in;; 1;,Jr n:r1t. I ur L.lp11i!I ;1 p p11:1.:1,i1 1\1l1 .•

: .. nd l 1 c l d !( r ·'uikl m t: : !11J.:1 .... . . ; . .. : .:c.: t .ull : : d s -.: <b 1 1 1 Vt:sl 1 1 1t:nt proper!\
u1�d::t :: rn 1 1 i : J u: .: .
·
l .
••

L:md ;ind building leased by r a 1·ent 0 to tht.: sut s i : i:irv 11nd � r ::in 0pera1 i 1 1g lessee - inve�lt1h!11t
propl"rty 101 Sl'(l:t r:t tl· I "· ;::d I PE 1 01 L:n11-;,;ltd:1 nl f S
! 4uipmclll : nd other nh>' .1hk pmpcrt:i fo1 ;-.;:n1.j: - •.' l ' E

l · ost �L.:JJCCt I v ,.q Jrc1: ia1i011 ;

muJcl
1· .. ir '·;ilue tnodc·I
·

- t� . . d ·pr.!c.: iauon 1-·ut �

:u . :, �· .�: 1i.· . . . 1 , 1:!;r 1 d e : : :1•": in, · iuded in f)l'O tit or · oss

l 11 f (•n· �t rac.: �, .. :tfl

-.!.m,•: l 1 .1tc •I 1P;·:rcs! i -. t1!!,h._r t l : a n • 1 1 1c.!.: : , i :1 ·. • ; ,· . i.:: '. 1 a�· . c . r . v: .1 1 1·�· ·: s�'l.·i
• •

-
·

· ·
\1:irket rntc :)f 1r.:eres1 is lower than llnde1� v i 1 fl.!
.. .
i n t · .. ��· :�:ite 1 k r i -. � i i v,· l !<. h i l i l v. ·
t · all opt ion
\la.n.ct pril:l· 1.:> higher th.111 uption pn..:c Jt"fl\l1l 1> ' l' a :sl·t
- t!!nt.•rd. .
• •

Markc:t pricl· 1s luwer 1ha1 1 option price 11 .. ·l ' ' j. , _. ,. . . , · �1�: and :101 . 1 1 ! obligation.
I �776
.
._ ..... .

. .. - . .
.. ':.. _... ,,. -- -· --� - -�-�"t"-�,_-·,...... .r ..."':".;_-�::,�,�•·-t·�-: ��....:...·.;;•.i;.-�..,.. -� .;.a-· · ., · • . . ..... .. •'··?.,;.. -. .,. ..,.., .........-... � .
....
.

• • ._ : _ ..;,_ .::::::. .,;:..�_·..;,: • • . . , ( .PCP ·•. ' . --- ·

. . . ..... ., . •�.._ • ., ;•. ' ·.:· ••-·:::·:..... .:::�...- _,
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'" l'\'(l1wrt)1, 1>lun 1 and el1uipme nl •
i
( 1n ;1vn 111n1 l n v u icL" prn.:e less d i scuunt wl tether .,1kc11 or 1 1ut taktn
I· -·

t 111 i ns1all mt·111 -- Cash p1'il:e or PV of ful\:re pay1n-:!'lS

hs11:mrc 0 1 ' slrnn:s - FY o f nssd. FV M shares or : · �Ir valuL" ol �;!rnres
ls-. 11<1111: 1.'. uf honds pay:.ic lc - FY o f bund s pn:. ; 1 l) k . i7V ul ;1 :,:, <." .. :· f o..: c V it l uc o f bl l1id" JM)'11l i k .
•

l: \chanµc v•i t h \.'.Otnrne1 c i a l sub s tance .. I· v c . f : :> Se l g! \ t1; i·, : u�. i... a sh paymcn r '·" ' t h•: 1af l o r .
' .

p;1yl11· o; m i n us 1:ash : ·ec e i v cd on t h e p:irl ul recipie111. !

•

I · \chanµt• wit h1.\11t commercial subst<mce - C a rn : H! anwu1 1 l of asscl g iven plus c>1:{l1 paymc;nl or
·

1 11i 1111s c.1sh 1 _·ct'iwJ. Ntl g a i : 1 l1r luss u : l :.::-.1.':1:t 1 1 !,'. I.'. : : ; ret:<•g:11/'cd.

' · ; L owrn nu· n t �nu1l

C rn n t rdutcd to income match -

w i t h tu� ur� ell� t::. H u wewr if the cost� arc ulrc11dy inn1rrcd.
11 11.· t!- r; . nt is n u t right i m:utnt: .
·
( ; rn ut rl'latcd t u d e p r e c i a b le asset - O\'t'r th� l i t·: of the ; 1-; ,et : l ! 1d i 1 1 p1 oport io11•10 dl'pr....-1:i ·11i11 11.
. . .
rlw !�l':lllt lllay he ret.:o g 1 1 1zed :lS d e terred 111 C Ollll: or '1$ dvuudiOll from lh\.'. (.OSI of' t ! I·: ;1S� l .

.'\ 11�· n·p a y n u.· 11 1 of g r a n t i s recogni zed :i s loss t, t h l! extcn: e l' the c."<C•:�s of the f1aymcnt over
l hl· h:i l:11h't' of !he dd'erred income: .
. .
'-l .
•l . u u d c o _, t of demolition ic;s proceeds from sal ' �!�. it:gai kc.:s. title search :.1110 in:;urancc. 'o�t
1 1 !' rl'lul· a t i 1 1 g :-.qunl!crs. :.pet.:iul as�t:ssme111 . prupl'.�t:. t;L\ 1 1 1 ;,r: 1:: <11 :; .1�.suin..:<l . sur·1i.:y. dc�11 rnµ .111d
l .i1hl Ii 1 1 . ll 1lirt�;1g.e a s s u me d Opc i un n 1one:. 1 :; i..: <i[li l<ll izi.:d ! I. b1tl 1$ u l t 1 1na1cl y acquin.:ff . '
.

l >thc:rw ise. it is expcn sd :

Nolt· - that uncli.:r P I C l � tcrprc t a t i o n , the c0:-:t 1 J t' d....- m otishin� lh\.: olll b 1 1 i ld i ng m:t o r ' �.a l� a gc.
µrut.:1..·1..·ds t•) ma k e rooir for tht: constrnt.: l i oii .. - : 1 n..:" bui 1 u i r, r.! i s cat,i!a lizc<l ;is l'Ost .,f 11cw
h u i ltlin g
•
. .
.
I .a n ti i m p rovements - :.idi:walhs. street. p;;\!-=IH-:n<:.; parl.i1�g .ol. d 1 i v e :. u y . �ukl) l i gh l i • :l!-. �llSI •
• ut' landst:uping. new len•:e •

B u i lding -- Architect le•:, pb1 and �pel·i ticn : : un� . �rm . r . insun u:e during contribution.
1: \c;1va1iun. saf'c·ty fence during construction and 1 _.mov<!I 0 1· s;1tc!y ti:nce. temporary b u i l c'. i11l:_! l'or
\H>rk1.·rs. kmporary b u i ld i n g. for t ool s and maien:d s.
\
i ' l a c l t i 1 1 1.· n - l nstalla1 i d n . test ing. fr e i gh 1 . ·i1.�u ·;�111:, w h 1 k in trun:.it. !-.:lkty U\!vicc. safety
pl:i1 Jun 11. 1..·sti mn1cct d i sman t l ing t.:ost req ui rul hy !;"' or cc11: t rn c t . �.i i i.: pn.:parutio n .
1 1 1 1 11 n· fiuul111Jlc purcha:SI:' la\ es

· � . .l.,pt•t•ific horrowin� -· 1\ ctual i n t e re:; t incurn::t! d:: ·1 1 11,'. co11s 1 :· 1 k t 1 0 1 1 i'cri<d minu.s intt:rest inc:o111L"
1 1 11 the tempornrv i n veq llt'lll o f the b01Tl l'' i n �

c·l'l l l't':tl l'lltToWill� · \Vci!.!lHcJ � ·, pe1 1. .! 1 t u ;·..:. " ; . : : •...: : , . _ _ 1 . 1...: 1 .: . .t r.. 1<; ...:t.1'l 1 . .! . ; ..:;11>il«l 1 1�1bk
.
.
� -
. • .- •• ! •Ss• .
i nterest b u t c a n n o t exct· e d actual mterest inc 1Trr1;d l n ll! r e s t 1 ·1�c·mc on 1 1 1 ves1mc.-nt ol lj1c !!Cnt:ral
.

h.lll'l'\)\\lillg is ignored. I r expenditures <li'<:' in�U rt":U nenly ci•.1: !) g the yc.ar_ t h: average q••il .
i�
ft> thl· to l a l c\pcndit ures d e v id ed 2 .
•
�6 . f h•p n• d a t ion - srraight l i ne. production melh ·. d. � �'D ::nJ . l v . . l>k declining buiunce
·

({csitl ual v a l ue - I gnore for d o u b l e dec l i n

i 1 1 g ba! . . ice
�
•

F u l l (kpn:ci ; i t i o 1 1 i n the vear of acquisit

io1� �111·.I _nli ' �prec �ut�un in tht: year <li:1�1saL
a nd ! �1 1 1 oeprer n.111011 ;n tne yc:1r ot d1sposc1l
Nn ckprec i a t ion i n the year of acq_uisi rion
1 kprec iatiu n is based 0 1 1 near est l u l l mon th.
.
2 7 . Dqilctaon - I) t"P . I e1 a l) k amount equate ' - aqt. !�. i ·.�l• 1 .;l: st pt us : \ .p1orat: )11 cost 1.icn:lopnwnt cost •

" . l : . 1. l . 1.11.. 01. rc!>1Ul

.
: la . 1 v,.lut:
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f 'o ' restL>n lll\111 t.:O:>tjH ! dlllS utlt' •
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sc11 t u , . t ;. 111,a1ed
prl' va1u c •
;ind _
H : . n�L"s ck .,1.; , ! ;n :·a1c ::'i.:r u1111
_. . .

- " i'' il•t:!t.\

P"'
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I (1ta I l \ ep I L' l i u n d u n .ll =-
kp kl inn 1 11 c l ude<l 1n cus t ot
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.

s.t l c s U
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i ' ; � " dti)k: '' ·! ·. rnk pc:· •. 1ni 1
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n!S .im :,un t

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. Ll<I n d n11 uc 111 111� _, .:;ar:yi
: s . n r v n l u i1 t wn sur plu s - "4
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\'a I U c 1 depr
.
c,c i ''1 ted re·�; , Cl."lfl ·� nt
So1 11 1d v a l t 1 e eq u a l s fair
0
. .i , 1 . . . r . , . . ,_, i i ;n:;u�I; :1:1 a i n.:cl ca1:nings over
0 1 1 i zt:J n t:I ol t.i .•. ,u. . : � .1
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. . . . 1. s i.eco. "'
I ht.: rern l u�111 on su1 plu�
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I I ll. I t. 1 1 I'd '1 11i n1.?. l i fe , , j t ht· as� � i
·1s l he

�oi:i� anJ
n·.·a h 1 l" <!'�·• >t.n t 11. .-. "(•ve":-.ble amount
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t e��
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· m1m1
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�y, tn_ l! ' amo unt

I m p a i rmen t loss equa I s can ,_.,,t u·� ::-. :.�· ··
•

cos t 0, 1 d.151· ·
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h i o� hcr herw{!ell fai r v a l ue les s
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. I l ' U h'll\ I ) \ �·r 1 1 1 1· s h o r h• r l•l
llSl'llil
' \ Wl'l' l l lqwl ; . ; c u l ,, 'o l·m:; 1111d l i t�·
l ' l'lldi•11i11 i·I, 1 :: l\tlt i l l l \ 1 1 1 \ 1
'\'1 1 h 1 1t ll'S(<',! , , • ' • "I' t l o l : il'll l lll k.1 -.1 . l l lllllll i l �
\,otnlwlll i:. l\ll\ l l l l h ll l l /1\l ll\ll ICS\C\I " " i . ti))(llt'l�ll'l l !ti kttsl lllllllltlll y .
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O.fl!Ct I HIS 'li\: 11 IC;·ed
I"" :t 1 I
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111 H'\I \'l l't\.', I l11wn 1.·r. 1 I l I ll' pl'

' • 111·1·h
l { t•s1 1' X \ ll'l l:1\'. I ) n·d11p1 11n11 I • •
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l�'l'.hll il'ltl f1•11s i h i l 1 t y tit' t'1' ,1t111 1 1 1 k v i nhi l i l " ' .II\\' I•.'' , !1" lll\Clll l'll�I IS cupit11l i zcd.
I )l'JJ.ll lli'l.ll lWll l'llS1 \:. 1 1 1 1 , \ j l1.'l\S\'

l nl tlllJ.:lhh- :1 ss 1• t with l'i 1 1 i l 1· 11 1'1' is : a 1 1>i· ·1 1 ' ' ' . 1 1 1 1 1 1 1 1 1n t in1 1 nnd t.:s l t·d l i 1 r i 1 1 1 pn i rn 1l'lll w hc n i'l·:cre
is 1111 i11d1rn ti1111 1 1 l i 1 1 1 1 1:111·111 cn1.
l 11 111111!ihl1• :ISM'I w 1 1 h l1 1 1 kl'i 1 1 i l l' llfo 1 • �
111 1 ; 1111 11r u i d bllt ll:�tcd l\w itllfl:lirmcnl at ka st ann � ally
: 1 1 1 d wh1·11 tl tl't'\' i s :111 1 1 1d1i.:ul11>11 1 1 I imp.1irnw1:1

"1 l ' rrn1 i 1 1 1 1 1 l i a h l l i t y

I ' 1 1::1 1 t l ) 1 1 \' l l l l l l l l l f l l l l \, \'11·,\ \)\ d1 -.. 1 ri''llli1 • f ll l ' :t • · 1 1 1 i l l1111.:.: 1 1 " 1 1 1 ,·11st1Hner .:qu.tls ,·sr1:11 : ;1.· p.:r

1 1 1\'l l l l l l l l l
'11 '
1l·d1·e1m·d c1 1 :1:tls ti':: pr•:111 iu11) li:1bi l i t y '. '
l 1�1:tl i
I n lw n:d,·1 · 111<.'d minus
'
\Va1 r:rnly l i: 1 l 1 l l l t y

1 · 1 l l' 1111111hc1 nt' 1111 i 1 :; ::old 1i 1tll'S the ,._., 1rr. 1 1 1 1 y ..:";;1 l ' .'f \11\il cquub th..: cxpc:nsc ininu;; th..: pnym..:n1 ·

l'ljllllls \\·l11 ra111� liah i l i 1 1•

.1 1 . llo11tls puya hl,·

Bollll isstH' cusls i 1 1 d 1 1dc· pnmH11:01. n·:.1. . -11gra\ ' i1tl,!. and pri ntin g <.:OSI. unden� r i ce r
1:1 1 1 1 1 1 1 1 i ssiot t . kµal kc:; and lees p:11.t i. .1,·..:1.111 1 : 1111s li1r rt.'gi�trut1un. Thi: nmo.u n 1 is adtkd to
di:.rounl • >1 1 bn11ds 11ny.1hlc ur dcdlll'tcd • : 1 • : ' ! 1 1 1 , 1 1 : 1 1111 1 1 1 1 l'utlds payable

I 11 h'n·sl 1• xpc11s1• l·qu:ils ,·arr)' llll! :inw u n · 1 1 1llt.:' ,·1 • ·, 11 ,.c r:lll'

l 1 1 1 l·n·st p:ml 1.· 1111uls la..:' v11 l l ll' 11 11 1c�• m 1 1 . . . nal · ·.,: ..
..
1 'hc difli.Tl' ll..:..: hctw,·..:1 1 i n1..:r1.·s1 c':p<.: • 1 l' ·1.i.� 1 : 1 '. \'re�c J!.ml ts the discount 1ir pn:mntm

;1111ur1 11.alio11. , i
. \
I l t l· 11111ml i 1 nl io 1 , ut ' disn11111l im-r1·11S\'' iJll · :1•:!\I c-. 1 .·1 1:;\' :ind 1·.11 1 v i11g .1111011111 ol' b1)11ds p:i) · '�! e
I

• h.: :11111i1 1 1 1 :1 t i rn 1 111' 111\·1 1 1 i 1 1 1 1 1 d('l'l'l'llSl'S . 1 1 h · 1 .:· · 1 · ! ·•·11se :111d cu 1 � i11µ .1111011lll l1 f' bu nd � p:i.::11.)k.

• l l 11111ls payahk 1sM1cd " it h shnrc " a rr . 1 1 1 1 .'I · 1 1 1• .I 1�su; prtl'l ,.r· bonds puyabl:: w i 1 l1 \\':trrants
1 1 1 i 1 1 11s 1 1 1ark1 1 v;ilu.: 1 I h,>t ! tb p.t) :tbk •• 1 1 1 1 1 1 1 1 1 '' . t r 1 :1 1 1 b ,·,1u.11s shui -..: p n.:,.tn i l l l l l ur t 1 1l·r..:;1�·: 111 .
,·q u i I!'· • , ,
•
( ' a u 1 i11H - 1 1 th1.:rc i :-- 111i 1 1 1 : 1 1 k c 1 pri1·· ur 1 1 1;1rt.. �· 1 1 ·. 1 1- ,·,·q 1 : 11t· ,,, l'lllld� wi1hou1 \\arr.inls :111d j 1 he
11i.1 1-ki.: 1 v u l lll' 1 i l ' th.: " <llTallls 1s l.! l'.'l' l l . 1 i it: :1 1 1 : 1 1 1 , :'ue price ,, 1· 1 ht' b1rnds wi1h �
'' <llT:llllS mi 1ll�
•
•

'l hl' 11111rkl'I val1tl' 1 1 1 w 1rr:111ts n) t;:ll �: n � I! k·.-1 ::,! \ · 1( bP11d.; �' i1 h11u1 '.\':lrrnrolS

\ .'1111v1Tlil>lc l>011ds pay11l>k - I otal 1s.1· · 1'r1,:·: ·! ,·onvcrt i bk bonds p:i�·uble 111inus ma�kct ·
1·alttl' 1>1' lH.1ml·: p:1v.1hk w i t h o u t 1·(1o1 n.·l"il ! · 1 \ ilcg.: .:qu.11,. sharl· p1 -.-11w1111

i i i >perating k:1 s1•

( ' 1 1 1 a l n.pcnsl'S 11f lc�sc1· induJc <1111111<1: .. , 11 ,; �I . .111,i: '.ional r.:111 ba�cd 1111 saks. amur1iz:111uu llt'
k:1�.1· ho 1 1 1 11s. d<:p r1.·1· 1:11 i1111 ,,r kw.i:l 1 ·!,I 11:11 · · . .:m.:111' .111,I otht:r i:xpcnscs cha1 �ed by
1l1t· k�.:--1 1r :ig.1111s 1 thl· k�st.:,·. su..:h .1s t . 1 ' . •. , 1 1 1 . . 111 . . 1 · .:,·. t \!j)llt l > .ind llt h .:-r t:xccucory ,·,is1 �
f�d n· 1 1 t i 1 1 l' o 1 1 1 c of f,·ssor l:' qtt;tl�. "' . . 11;1 1 1· ·. t :md t111111r:1 .>:llitin ,i f lcu sl' h1) n us mi· rns
dt.:pri:1.: 1 : 1 1 i1rn of lca:-.cJ assi:t. propc1 ; , :;n1: ' . · . 1 � urance .111,! amor frtation of finder r(:, or

1 1 1 1 1 i a l d i 1 cl:l costs nv,·r th·: k:1st• rnn�

\: hn:mt·c h-:1�c - h·sst:1·

. fo· 1 ust 1 1 1' 1! 1.: :1sscl and i n 1 1 ial kasl· ! 1,•l,: 1 . : . 1 , •• u:il to the l o w e r bl'!ween th<:" prncnt rnluc .
ul 111111111111111 h:a::c puyllll'. tlls and fnir v11h11· ol :1,�1·:

paid h:,. l l':-.� . .:1· � : ; u : .. .

l 1 1 1 t 1 a 1 d i l l.'.\' c o :-. t !ht: · '"'"'' .
• liahility.
l>i:pn·1·ialit111 j., ba�t:'J .in thl: I t h' ot ! l 1..: .i: . . ,l i! 1i1c �riteriun 1:> transkr ,>f 1 1 1 k ,;r
hargnin purchase;: option. Othcrwi;.:·. i . i l w :ri 1 . :·i11n i� 75� •• \If llSt!t 't tl l i f1.• 1•r 90% or 11 11:• !fair'
value of the asset. the shorter bcl\\i<.:e1 1 l ' l t.: 1 , · �· . , · dll.' ns:;et o:· lensc 11.:nn is used. .'
 l
..

• •
Pa�e 6
· .:)ales type lca�c - tenor •

., · :!I'J�� r�ntaI�· p1 I!'> ···h,_ . ,.,,, ,.. nu��

=-· '"j1teed or un°uu "' rant��d.
'-lrt.iss •nv1:� tr.H:• . i ::gua''.; ' - ! · ; .�• -
. • t- \,
·
r'.�·;1u� · ' ' ·-

•. �·- ·AJ.
1: va! u"� ic:
- i·•norcd
"
•

·
Ie�<;c, . . . . -· ·-Stu , ·
·

dowt:v•: r tf the dk to t11c a.,se: Ii lr:r n � 1 -r:-• d : • .

· · ·
• n�
· · · �,,. ·

Net inve-,tment equals the presen1 valce <.t t�� p·')' :� r::n�ls aao :he re5i�ual value.
Gross inve�.tmei11 minus ne1 investmen: t"';�·:ll:. 'J <;1' ·::ied inlercs'. incomf •

'Net 11w1:strncnt minus cost of asset and if.itiai �ire::1 cost paid by lessot equals gross Profit. Tlie- • •
nc•. investment is the .:mount sal�s in sales � pt lea:;c !
1 ," I
1
::(, D1rtd linancin� l���c - lessor
t .; '
( 1 ross invc:;tment - samt: J.!> sales typi: le·�··
!· ·r l'- i:\ •1wc�tn11:nt equab (;ost of asset plu� =r.!:h' ,�:r ...t! cost
I� .
< irnss mve·;11ne1:1 minu:, t .:l inv.;stm�m -:011'i'!> on�ar:r-:d intere::.r incomt
•

i
:;·.: :\�srt swap - ·r :;c ('ifk:eace be!w�1, '.,·� !·:t�: Li . ,;.�d the L�� ing a ounl of the assec is 1he '1t
�;iin or loss on cxtinl!ui�h ment. I
! .
(j•1111 or luss 011 Jehl rl!structure - d!lfrrc no· ::e> .. e:::n the l1ao:iicy and ! fair value ot asset.

' i :1i 1 1 m l\ 1·,�. 011 t�.ch�u �e or dispo'ial ._ . r '.'!' •. �f - dit'ft:rence je1weeb fair value anJ c:crrying
� l l 1 luUJll \ I �' •.L

l·�q uity swap - T�e di:ference beh" � rht> faj.- ·1��ue ·or !he stiare�ar lhe fair value o f t he
liahi liry and .he <.i.11T) tn6 amount vfii_.hi!i!·• :.., he �in or less extinguishmenc.
I he t: x c c s � ol l'.w l<ti:· vL.tlue of shar;s O" · 1-w> :a : � ·
rJ�e of hzt:licy o·•dr the p<lr value of sh::tres
·�4u<ds sl1&n.: 1;r1:1 1 1 1 1 u 1 1 :,
!\ 'iou i lil.:a lion t•f t e r m s - The cld !i:1bil: n. ! :h. �C•L" prcst=nt "alue 01· the new li:: 1bili1 e u;d:;
y q
thi.: �;1i11 \.lr tm:; •Jn •!>Jinguishn�n1. "1:- -= ·. :: ! th� ::c....· !iabilii::r is compu1ed using tiie
<ll'igi11al cffrct ivt· nl le. l f the �h , : :,.,_ .·.:· �·�•inguisnmenl is ltss than 10% of rhe uld
l i ; d 1t l 1 t )' !h..: : 11odiJic;..1 t i�n :� nul ;en e 1 t !ng•Ji,f.i 1 1cnf.

;x, < 1 1 1 . . - c n t 1 : 1 :1; c \ p c nst· c�: 1,...il $ .;:ixaoh: :,1C•":1e !:r.-.·:: ...: \.. r.-ent tax r.. te.

o t : i l t a x ·: x pt· r> �c L"Cjt. d:., linrt:'.c:ai :nc.•11:� •. 1•!>· l· : to \ a x 1i:1;:::<; current tax rate. The tinancial
I
· •

: 1 1•:011 11:: ., ubJt:c.:! to Lli' mus1 cxchlde pcrman t'r

t differen ces.
l >e frrre1l I :·. "·· 1 : .·• :,,· •. ,: 1�,· - ' J l'.·'.• .i ·. r·11 f u -.<.· 1.1· �• ·,1· 111. : :·. -. ·:.!:· ·. -� . : : :: rences tames f •. '

uture c:nac:.:.-'I ta.x

• •
.·

r:tk·

IJcfcrrcd lax a�se1 i.:111.:;L f uturc tlt.uuctii lt. ; : r1.;A.-ra•� .:i r;·:!rences time5 r'llturc ena�lt� ta);
l;Jl.: .

F u t u n· fa .': : d • k it:ir•r•u , : ,, ; ;,.. 1 ff::-;-:r.c·:. r·: _ ·. . :: ; ... f· ;�h�r ftoaa.:i•il income ir, the .;urr\!nt y-:: ar.
Fu r u n· tll:!l11t:l : 1 ;!1: 1 .. , : , ! 'J:· J: ; 'J! l l .. ;1 . ·1; .: .. _ ; _ , . hi�ht: r L.\:, i,lt in�omc j:1 <he cmT�nt :'·..:_c.
ir .
-
• , . .•

. . .
'
-,,,) 'StT\' . l'(1 � t ·: r : t ! a ! �; c 1 1 n :: n 1 '->:!·\ :. : .: t O'
1n· .
, t. ">; · ::! • •• ,... . .:-.�\:o::! ;,r.: ;::in
!oss on plan seulernen!. in
;� l'i i 11 t t· n . ;1 . ..: :1 1 1: . i .
i : : I . :-.: ;! -=�.pi.:n, : . · : ; .,:� f · < , ; · :.!>-: ,..: � 1.-.: . .-'. m:n<1s : n1,,_-- re�·
� · 1 Hc omc on faj r _ .

vulw: vi plan a-;•.•:ts ,; · the ine.inr.m�· 1 1l'! ,;an!': discount rn1e must oe used.
•

E m ployee bcncfil cx p cme eq •'.jlS s�r . :·;: ('. ;: ; )It.;'.: llt:t i'.'1'..!::st plus !merest on the en�{ of
assc! n i l ing
f{c111cas11rc rncr1ts inci· :.ck <1•:11.::s_:-ia! ·� :i � ·� ; ··-· ' :·: Pe(,_ !L:: jitfcr:r.cc bct\\een ac!ua! rctun\ •

. .

011 pl a 1 1 assets and ::1!cre�t :nc0ml'!. ;:su ··r· change : r; :h:: et1ect of asset i.:eil;n!.! llt!t of •

in!t-rcs 1 nn rhe clkct of asse! <.:�: i l ing :; ! th•.' ':-:: !!<�!11g. R:::<i�,:easurements are accoum;<l for as·
L 01npl·; 1cnl of uthcr tcHnprcht"n�h
·c ,,, ce1.ic
Defined hcncfil l"OSf �--;u:.i!:, the cmp!u_.c,: �;-,:."!;'. ::-:pense ( '..s ttk net rem::asuremem !9ss or
• 1 1 i . 1 u.� ' i t•: nd rem�.i t1:emeu 1i.;. • n .
ii 1 ;1i.: <kful'.:u lwn.;li! '.: • 1 is 'iK r :· tJ,,,r, ll .. :1: r•'.:'J'.1••:i. -�� differ.=nce is lccru::d benefit cost

1 ( thi.: i.:ootribw .j:J ro:.1 ,; 11 1ure thun .j..: : : L·�d 1-�:�:;�1. the di!1t::rc!1Ce is prepaid 0.:-nciit i:vsL .

P B O cquc.ls th: ��j111,j , 1g ,�aiar(:t. ·> · , -

p l m ...: ui :·;;nt �·.:r_- c·:: �c�:.L pas t :,c:�·i�c cosL in tc>cSl and �xpc:nse
: ..
. · � .. }IlC <u:' <!firia1 oa·r ( · ' �c ...,,., , ... 11· PBOJ
·-.l
•"
J h • ;J mul'J .s t ..:. x · · "'
1- . .
=- �-- - � <e>... ,
·

ai.:1ua ri:1! lo>'. t incr;.:. . c � 1 1

· ,.. •

'
'''/I' A. I , ·! 1 .111111,,
· •.Ja . . j>lu" f·v·'•1 •II·,
· ·l'<I •1 .-- ·
•(i•. , :.!ld actu<!� : �!Um ruin us benciib paid
.

" l!ljll'.1 �.
- • •
,-,.;f.:

. •: · · • 1 1 : 1 · � · 1; t, : i . :� i . (• - � " · �- ; .:nic.J li:u;: :ii�-.

; ! t it\· l ' f�I J .
·
,
� ..�
. tI1c 1 ·· v l'A
ll. .
is more th un PB O . 1he d:n- pr,.
11 •·� 1·- id a��ef
• enit
_, f'..
-nce- i'"
•
.

5776
•
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�apitai plu� subscribed s h:110.• ..:apital les;

:!nd rel!llnt',i earnings unappwpriated and .

(
·l l \ 1·t1 1i1H•d \'n rni n11 s I•
'

� l 11d, 1lid1l 1·111I 1 1 1'

20" 11 1 , .- mu re is 1.'h,ll'I!•' -' I\ r,·dn.:d enrning.:, ut p111 or st11kcl .v uluc.
t h e d u l(' of•
1 111111 �o·•,;, is 1.: h�n.!1..'d w !: !:11ned eurni:1�s :•1 fa i r v11 l1 1 c on
1 111·1, d i v h h·1HI of ks�
.
d rd11 l' : l l it1 11 l l 111\ t'\ v 1 , t i :,'
l : 1 1 r \ ,1 l 11t· mus.' ll\" t•,· ' ' " -' ' ;han : ..,, :· \ al u1.· o r
stalnl \ ;t l u 1..· 111 " h 1ch
,·,t'"' l l h· p.t: \ . \ u{· '" � . . H\.' ll \· ,\ i l lc' l:"-1 \..·h . . : �c t \, · :.:! ; :t··. �\tL:! : �.�:"
pro p erly ull l l; e d .11� or
l ' ru p1' 1'I� 1 1 1 \ i1h'111I i:.
l.!�'d h\ r1.' l:l:l\t',:1.'11 II
·
. . _:_,rn .;:_ ra ; . \ :du 1..· l)f !Ill'
• 1kd:1r.11il1 n, •ll y1..-:1r-1.·1hi �nJ 1.hl11.: vi' ....ct\kn 1, • !, . the •
I l il· l'"'\ ll' rl \ t.1 :•t' .!i,1ri:11111.·d 1s mc,ism1..-.I ,11 1 1.·:1. -1. 1 111 ,II 1 1 1 : im1 cr bl:' t 1.\ o.:1..·1 1 c:1 1 T� 1 n � ainounl
.11hl 1:m 1. 1lu1.' kss 1.'vSt t1.) distn hlll1.'. • •

! ' 1 1 tlw dnt1.' 11f s1.• ttkmt'nt , the- Ji ll�n:ncc: �- ..:1,, _.,11 i 1,- ,i i ,·:dcmi :'.1ynbk and th..: can-�· ing rnnoun t
111 t lll' pr l1 p1..· rt � is �11in or loss on ll istrib11t 1011 ,. flrll[h:rt� ,f j , illed . •• •

1 ·ri1•t l'l'ri,1d •'rt\\i"S

��1·t i1 1,·,111w 111· k'�S
i ' i " id1·11ds 1k,·l:irt·d
l.'11:111�1..'s a..:n1un1ing l'll l i r y
l\1.· :1li1:1til'll ,,f r1.· ,·alu,11im1 surplus
' 'l'l'l "'tir i.11,•,\ r1.'t:1i1wd 1.':I? n i ng.s

·I ' S h : 1 n· 11 pti11us
.
F a i r ' uh11· "r �h:\r1.• 11p1 i,1 ·1s 0n th· 1bll' 111 �r;; • 1 1 . � h,· thi! ,·:Ju� is n>'I chnngL·d .

I 111 r i u s il' v n l 11 1..• ,11 ' shar,• " l'ti0n:· :it t·n· r� � \':I !'·\.'11.J u 1�it ! h,• ,; :11-: of s1..·�tkmcn1
. . lw 1.11:tl .-,1111 p ,·nsat 101 is :-i l l 1.lc111cd ,, , ,-1 ,h , ,;,;tin!:! pc'ri.-0ct. I f the shnn: option�. \'l.'SI
i m 111c.:1liatd) . tht' h\l;d c,,mpcnsnt il'll 1 . r1.·i.: ·. ·� 1 s,! in11nt',l!:::�ly.

:. h a n· 11pp1 1'l'i:11 i1111 ri�I Is

"" i l ,ll 1 1 l i 1� 101 llw n1111µeus.mon is ..:qu.u k• t:1-: .:�.:l..' s:. vi llll..' 111.1<i.�••mic..: u l the :.ll<1re 1.iv..:r a
pt t'dl'll'fl1\1111..·d !'rice. )uch liability is m�·as,:; «d 111 CH I")' y ea r-l·n tl u n til t h e · d11le of
' ,· 1 t kllll'll l .

· I � 1 \ ,1,11. \'alut' l' t' r 1•rl'lc'1\�111. l' ;md ordin �1ry sh:ir1..·

)
l 1 rd1·n·1H·1.· shnn· 1.•qu i h· 1.•,1u:1ls pr1.• frrt'1�1.' c.> ; ;-, , , ' : ,'tll�tan,i : n ,: plus l t1.H 1idation pr�mium ond

1 i,·i d 1.·1 hi � in :uTl.'!lr�. If ,·111m!l:i j, '" ;JI ..; 1 , :J,,nds 1 n <llTt::ir� ar..: pa i d . 11'
pr\' 11.•1\"lh'1.• ,

1111m·11 m1il11tivc, 1 n l � c11m:n1 venr ,Ji, 1,fl!n,l 1-. :·.111.l

I )rdi 1 1:1 r�· shun· cq u ir�· . -qu:ils i.•t:il :'lurc�"il,!1..· 1 : :.� ·. 1 i1� mi!1t.� prd-t!re1Kl' sh;m: t'qll1ty.

· l ·I :--. in�lt• 1.·111 r \ ' form11l:1 fo1' tH' I incotul'

1 ·q11i l \' \'11Ji11g 111mus 1.'q u i l ) bq!111nin;! cqt::1!..; n'! . 1.-- �-.l:i, . l:r 1.b:n: . 1sc 111 cqu 1 l \ plus 1 t C'111s
1kd11t·h·d li-1'111 �-quity bu1 1101 pnl l it �r t..)�:-> ( d i ' 11.k 11-.:�, \\ i 1hJ1�1wals, t!rrurs) m i n u s i lt! 11 1 S added
1 1 1 1·q 1 1 i t \ b1.i 1wt pn,tlt ,, , J,1:;� t i ssue ,,f sh:ir,· c 1r i . I' ,., .t.ldith't ,!! !n' estrnent. dor.a1ed ..:ap 1 1 a l .
1· 1 1'111 � l \'1.] tt;ds t;t.:1 i111.'1 •n11 1'r ll':-;:.

-i ·, < '11111p11t:11i1lll 1)!' sales. pt! rl..'. h :-ises. t'xpense� :mdim" �m� 1)thc-1 1 h: :11 sales under l'ash h:1sis 8:11.'l
.

.1n·rual ha·;is

il · \ i t1lll' l :l l'\ .tSSl'1' - l ' : 1sl \ll' :Ill\ 1'1..'Ct':\ :1bk !ll i h n l :llllll t l l l l " ' . i l lOllC)

\ l111u•1:1ry t i : t h i l it il's '''I� p,n;tl)k i� li\.:d ; 1 1 11 1 1 1 1 ;1 , ,f !lli1 1 1 1.' \

• , •
I l
, t1lt1l'l;1 1 ) 1 1 \· lll� an· 1101
•

·1·st:lll'CI.
\J111111 11>11l'l<.1 � ll1'llb .ir,· : 1. �tat..:d. fh1..· for11111b 1 :. • �.. 1 ..; , .111 :: : . '.'.- : . . ! ' 1..'.1 1 - .;- 1 1,I 11\o;.'I' 1 1 1 1.1,·.x lH1
• al'quisi1i1lll d:lle m u l t 1 nlicd b\' histnri�:11 i;,,�i t' � 1 1 a b n·..; 1 a t 1-ll :1 m u u n 1 .

' " >r i11rtm1 I.' nt�d

1.!Xpcns1.:: • . t h e denon1ina:. .,· i:. q . .- . ' :r .L�\: 1 1 1,. • \ a 1 1 �1bt.:1,it1nn� the ) ear. · l ht
.
h..:g111ni11g md<.'x n u m :i,·r p!us the cnd111F i•11.k . 1: 1:· 1ht 1 , : ·. , " h' :' .... ,:u.tls 1 h e :11. nag...: 1 1 1�kx ·
! l l l l l l h1.·r.
i�
5776 .
•.
I

...
...-.� • -...- - . _ .- .... .. .
... - _...... v -�.._.. -. °"' - - �
·�.... -... .. _� ->.-�
-- ..
 '
"

l'age 3
. •1:4
•
•

ii ·7 . 13.us1c c11 rn rngs per s Itare

•
.
. .

d
Ne1 i n co1rn: minus annual p re fer e n c e d i v ide n d i v ded by aver;ige ord i na ry shares o u tstand i ng ·
I f r n m u l n t ive, 1 he annucd p re fe ren c � led t • c t e d from net income whether declar; d or
diviJemi is :

not. Ir n o n c u m u l a t iv e, t he a1inu:d pr�ferencl' d i v '. · 1.e n,l is deducted onl�· when clec l n red.
pl it s
D il u t ed earn ings per share - Adj usted net inco n .e d i v ided hv ordi nary shares <Httstandi ng
polt:: n tial ordinary share�.

P o t e n t i a l u nl i n a ry shil!'es

Ordinary sh a re s into which preference sh::ires are t onvertible

Ord i na ry shares into wh ich bo nds are convertibk
Ordinary shares covered by sh a re opiions m i nus a:;sumecl treasury shares.

Thl' nurnbvr of nssumee: treasury s hares i s equal <�> the pro�eeds fro m t he assumed exep:ise of
share options divided by the average m a rk�·t •price o t ' tl1•: share. The o p t i o i;i price mus t be
lower than the averLtge market pr�ce, Other•vise, tht' share o p t ion s are a n t i<..l ilutive. ane
therefore i g n o red · .

·1 hl:' a d j us 1 c d n e t i n c o m e is equal t o the ntl i1K1 1 111e pe-r bou!� p i u s i n terest expense on bonds,
lll"'t pf I ii \ . The :inm.al p re fere n ce- d i ·; i dcnd 1. nu lun �t·r dccl u d cd frorn net in�umc. The
share o p ti o n s do not atrec.-t
net incom�.
• ,

4 � . C u rrent c os t

F n r invent o ry ··· The realized h o l cl i n;!: g·ai n �.· ' -:1-;� is • h e d i ff�rL!nce b·�t .veen co�t of sales a t
:in·ragc cu rrent cost and cost o l' sales at h i s · \ < I il.'..d cu:;1.
Till! u n realized ho ldi n g gl1 in o r loss is the di tTere1:ce between c n d i nµ i n v e n t o n· at c u rrL! n t c�ist
.
.:tnd end ing i nventory at n i�torical cost. • •
.

•
fo r depreciable nsset - The real ized holding gai n o;· loss is d i fteren ce between depreci a t i o n
o n avt•ra gt· c u rrent cosr and deprec i ation o n h i s t ( r i ca l en->!.

I he u n realized holding gain or l os s i s tht di fference between t he net current wsl and cmryi n g.
: llllOllll l . .

'1 ' l O p e ra t i ng activities

4 �
: lrinc i 1 •1I revenue a c c i v i i . s of the e n i t y and uther ·1c t i v it1es L h a t are not i nvesti ng. or l i na n c i
: ng
; tClJ V .l l lL!S.
'
·
Opern t i n g :1ct i v i t ies ge n ua l l y res u l t l ro m t r.11b. 1L·1 . . i1::> ,1 nd t', ·,· 11 1 -. that 1:nte r into 1.lic
tklerm i 1 1ati J n o t " net i n c 1 1 1 11c or Loss.
.
.
� •• : •
t1rvcs ting n c t ivi ti es are the acquisition and d i s pos;ol of long- 1 e r m as.sets or n o n o p c ra t in g
assets nnd other i nvestm·:nts n o t included in ca s h 1·qu i vn l ent <.. .
�
F i n a n c i n g a c t iv i ties res u l t fro111 1ran ->f1Clions 11 : 1cl c 1.'e n t s all�ct 1 n � s h :.r..:huluer;;' e q u i t y a11d
n o n tra<lc liabili ties

50. S M E - Refor to 57 55. 5756, 5757

5 1 . Sd r Test - 5764. 5765

52. Final f>reboard

53. Preweek lecture - 577 1 , 5 772.5774

£ , 1 1)

5776
.
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