Mid Term Exam FIN 3-Aug 2013

General Instructions: 1. Be sure to read carefully the problem carefully and answer it with caution. Remember, this is your mid-term exam. Forty percent of your grade will come from this exam. 2. Write your answers in the answer sheet provided. Be sure to shade the letter of your choice properly, like how it was shown below: Proper: Improper: A B C D E A B C D E 1. 31. [ ] 3. Use a pencil no. 2 in shading your answer and black pen for any other information needed. The answer sheet of those who will not follow this simple instruction will not be corrected. It is good as ZERO. 4. You are allowed to bring one whole sheet of clean paper only. You can write anything in the questionnaire. It’s all yours after the exam. 5. Any clarification will be asked directly to the teacher. Just approached him wherever he/she is. Talking to your classmate is not allowed during the exam. 6. Any forms of cheating are prohibited. Those caught cheating will automatically be given a “5.0” grade and will be advised to shift to another course. 7. Be sure to pass your answer sheet after the end of the exam. Any late papers will not be accepted. 8. The exam is good for 3 hours.

“Life has two rules: #1 Never quit #2 Always remember rule #1.”-Unknown Page 2

Multiple Choice. Choose the letter of the best answer. 1.

An entity is permitted to depart from a particular standard if all of the following conditions are satisfied, EXCEPT? a. When departure from the standard is necessary to achieve fair presentation. b. In extremely rare circumstances. c. When management concludes that compliance with the standard would be misery. d. When the regulatory Conceptual Framework may not prohibit such departure.

2.

The term “recognized” is synonymous with the term? a. Realized c. Recorded b. Matched d. Allocated

3.

Which of the following would most likely prepare the most accurate financial forecast for an entity based on empirical evidence? a. Investors using statistical models to generate forecasts. b. Corporate management c. Financial analysis. d. Independent certified public accountants.

4.

The information provided by financial reporting pertains to a. Individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers. b. Business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers. c. Individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers. d. An economy as a whole and to members of society as consumers, rather than to individual enterprises or industries.

5. As part of the objective of financial reporting as part of the objective of generalpurpose financial reporting, there is an emphasis on “assessing cash flow prospects.” Under International Financial Reporting Standards (IFRS) this is interpreted to mean:


a. Cash basis accounting is preferred over accrual based accounting. b. Information about the financial effects of cash receipts and cash payments is generally considered the best indicator of a company’s present and continuing ability to generate favorable cash flows. c. Over the long run, trends in revenues and expenses are generally more meaningful than trends in cash receipts and disbursements. d. All of the choices are correct regarding “assessing cash flow prospects” under IFRS. 6. An entity must disclose information for a. The previous comparable period for all amounts reported. b. The previous comparable period for all amounts reported and for all narrative and descriptive information presented from the previous year. c. The previous comparable amount period for all amounts reported and for all narrative and descriptive information that is relevant to the current year. d. The previous two comparable periods for all amounts reported. 7. All of the following are required to achieve fair presentation of financial statements, EXCEPT? a. To present information in a manner that provides relevant and reliable financial information. b. To provide additional disclosures when compliance with specific PFRS is insufficient to understand the entity’s financial statements. c. To select and apply accounting policies in accordance with applicable PFRS. d. To apply the GAAP in the Philippines in preparing financial statements. 8. Which of the following statements in relation to financial reporting is INCORRECT? a. General purpose financial reports do not provide all of the information that primary users need. b. General purpose financial reports are designed to show the value of the reporting entity. c. General purpose financial reports are intended to provide common information to users. d. Financial reports are largely based on estimate and judgment rather than exact depiction.


9. During a period when an entity is under the direction of a particular management, financial reporting will directly provide information about? a. Both entity performance and management performance. b. Management performance but not entity performance. c. Entity performance but not management performance. d. Neither entity performance nor management performance. 10. Financial statements portray the financial effects of transactions and other events by grouping them into broad classes, according to their economic characteristics. These broad classes are termed as a. Elements of financial statements. b. Features of financial statements. c. Accounts. d. Quantitative characteristics. 11. The statement of financial position is useful for analyzing all of the following, EXCEPT? a. Liquidity. c. Viability. b. Solvency. d. Financial structure. 12. The basis for classifying assets as current or noncurrent is the period of time normally required by the accounting entity to convert cash invested in a. Inventory back into cash, or 12 months, whichever is shorter. b. Receivables back into cash, or 12 months, whichever is longer. c. Tangible fixed assets back into cash, or 12 months, whichever is longer. d. Inventory back into cash, or 12 months, whichever is longer. 13. When a portion of assets has been pledged as security on a liability, a. The value of the portion pledged should be subtracted from the debt. b. An equal amount of retained earnings should be appropriated. c. The fact should be disclosed but the amount of assets should not be affected. d. The cost of the pledged assets should be separated from its class into a separate account. 14. Within the statement of financial position companies should separately report all of the following EXCEPT?


a. Assets and liabilities with different general liquidity characteristics. b. Assets and liabilities that have been financed with different types of instruments. c. Assets that differ in their expected function in the company’s central operations. d. Liabilities that differ in their amounts, timing, and nature. 15. PASSABLE EXAM, Inc. hired a new controller in late 2012. The controller has not prepared financial statements using IFRS before and needs your assistance. In compiling a complete set of financial statements under IFRS, in what order should the following items be reported in the equity section on the statement of financial position at December 31, 2013? I. Share premium II. Retained earnings III. Investments IV. Non-controlling interest V. Accumulated comprehensive income VI. Share capital a. I, VI, IV, II, V, III b. VI, I, II, V, IV

c. VI, I, IV, II, V d. III, VI, I, II, IV, V

16. The full disclosure principle, as adopted by the accounting profession, is best described by which of the following? a. Necessary information relevant and will cause financial statements to be fairly presented are to be disclosed. b. Information about each account balance appearing in the financial statements is to be included in the notes to the financial statements. c. Enough information should be disclosed in the financial statements so a person wishing to invest in the shares of the company can make a profitable decision. d. Disclosure of all financial facts significant enough to influence the judgment of an informed reader. 17. What is the proper order of presenting the notes to financial statements? I.

Statement of compliance with PFRS


II. III.

Other disclosures Supporting information for items presented on the face of the financial statements IV. Summary of significant accounting policies a. I, II, III & IV c. I,III,IV & II b. I,IV,III & II d. I,IV,II & III 18. The following are the standards effective starting January 1, 2013 but are still needed approval from BOA/PRC, EXCEPT? a. PFRS 13: Fair Value Measurement b. PFRS 12: Disclosures of Shares in Other Entities c. PFRS 11: Joint Arrangement d. PFRS 10: Consolidated Financial Statement 19. Which of the following do not belong to the group in the notes to financial statement? a. The financial statements have been prepared in compliance with the PFRS and SEC. b. The financial statements have been prepared on the basis of historical cost. Measurement Basis c. The inventories are measured at the lower of FIFO cost or net realizable value. Inventories d. All expenditures for research and development are charged to expense in the year incurred. Research and Development. 20. Which of the following is a purpose of notes to financial statement? a. To present information about the basis of preparation of the financial statements and the erroneous accounting policies used. b. To disclose the information required by Philippine Financial Reporting Standards that is not presented elsewhere in the financial statements. c. To provide additional information which is not presented in the financial statements but that is necessary for a misleading presentation. d. To provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions.


21. Which of the following statements is true concerning disclosure of related party transactions? I. Transactions with government that has control, joint control or insignificant influence over the entity must be disclosed, from its amount, outstanding balances with their terms and conditions and if secured or unsecured. II. Disclosure of transactions between members of a joint venture is unnecessary in consolidated financial statements of the ventures. a. I only c. Both I & II b. II only d. Neither I nor II 22. Related parties include all of the following, EXCEPT? a. Parent, subsidiary and fellow subsidiaries b. Associates c. Government that has control over the entity d. Entities with interlocking directors 23. What are those events, whether favorable or unfavorable, that occurs between the end of the reporting period and the date on which the financial statements are authorized for issue? a. Important events c. Events after the midterm b. Significant events d. Subsequent events 24. Which of the following events that requires an adjusting entry and necessary disclosures in the financial statement? a. Change in tax rate enacted or announced after the end of the reporting period that has a significant effect on current and deferred tax liability. b. The discovery of fraud or errors that show the financial statements were incorrect. c. Commencing major litigation from events arising from the inception of business dealings which commenced after the reporting period. d. Sale of inventories after the reporting period may give the evidence about the net realizable value at reporting date. 25. An entity is preparing the financial statements for the year ended June 30, 2013. The management reviewed the final draft financial statements and authorized them for


issue on August 15, 2013. The earnings figure and key data are issued to the supervisory board on September 15, 2013 which approves the financial statements on September 30, 2013. The financial statements are issued to shareholders on October 15, 2013 and approved by shareholders on October 31, 2013. The period in respect of which the entity would consider events after the reporting period are from June 30, 2013 to? a. August 15, 2013 c. September 30, 2013 b. September 15, 2013 d. October 31, 2013 26. The major elements of the income statement are a. Sales, cost of goods sold, selling expenses, and general expense. b. Operating section, nonoperating section, discontinued operations and cumulative effect. c. Revenues, expenses, gains, and losses. d. All of these. 27. The income statement reveals a. Resources and equities of a firm at a point in time. b. Resources and equities of a firm for a period of time. c. Net earnings of a firm at a point in time. d. Net earnings of a firm for a period of time. 28. Other comprehensive income includes all of the following EXCEPT? a. Unrealized gain or loss on a derivative contract designated as cash flow hedge b. Loss from translating the financial statements of a foreign operation c. Actuarial gain on defined benefit plan that is fully recognized. d. Unrealized gain or loss from increase in fair value of financial assets at fair value through income statement. 29. Conceptually, net income is a measure of a. Wealth b. Change of wealth

c. Capital maintenance d. Cash flow

30. Which of the following is NOT included in the definition of a highly probable sale? a. The management is committed to sell the asset or disposal group b. It initiated an active program to locate a buyer.


c. Sale is expected to be completed within 15 months; the country is experiencing great drought currently until the 4th month. d. The asset was actively marketed for a sale price that is reasonable in relation its fair value. 31. An entity shall measure a noncurrent asset or disposal group classified as held for sale at a. Carrying amount b. Fair value less cost of disposal c. Lower of carrying amount and fair value less cost of disposal d. Higher of carrying amount and fair value less cost of disposal 32. An entity acquires a subsidiary exclusively with a view to resale. The subsidiary meets the criteria to be classified as held for sale. At the end of the reporting period, the subsidiary has not yet been sold, and 15 months have passed since its acquisition and it has been 3 months that a tsunami hit the country. How will the subsidiary be measured in the statement of financial position at the date of the first financial statements after acquisition? a. b. c. d.

At fair value At the lower of cost fair value less cost of disposal At the carrying amount In accordance with other applicable standard.

33. Which of the following most likely would be considered a discontinued operation? a. A total abandonment of CMU Income Generating Projects of its sugarcane production project. b. Phasing out of baking line from the total services and products offered by CMU Food & Lodging Services. c. Selling by a diversified entity of a major division that represents the entity’s only activity in academic industry. d. Selling the rice & grains project of CMU Income Generating Projects. 34. Which of the following is NOT treated as a change in accounting policy? a. A change from average cost to FIFO for inventory valuation. b. A change to a different method of depreciation for plant assets


c. A change from full-cost to successful efforts in the extractive industry d. A change from cost-recovery to percentage-of-completion 35. Which of the following is NOT a retrospective-type accounting change? a. Cost-recovery method to the percentage-of-completion method for long-term contracts b. Cost-recovery method to the FIFO method for inventory valuation c. Sum-of-the-years'-digits method to the straight-line method d. "Full cost" method to another method in the extractive industry 36. An example of a correction of an error in previously issued financial statements is a change a. From the FIFO method of inventory valuation to the average cost method. b. In the service life of plant assets, based on changes in the economic environment. c. From the cost basis of accounting inventories to LCNRV basis of accounting. d. In the tax assessment related to a prior period. 37. A company using a perpetual inventory system neglected to record a purchase of merchandise on account at year end. This merchandise was omitted from the yearend physical count. How will these errors affect assets, liabilities, and equity at year end and net income for the year? a. b. c. d.

Assets No effect No effect Understate Understate

Liabilities Understate Overstate Understate No effect

Equity Overstate Understate No effect Understate

Net Income Overstate. Understate. No effect. Understate.

38. An entity changed from an accounting principle that is not generally accepted to one that is generally accepted. The effect of the change shall be reported, net of applicable income tax, in the current a. Income statement as component from continuing operations. b. Income statement as component of discontinued operations. c. Retained earnings statement as an adjustment of the opening balance. d. Retained earnings statement after net income but before dividends.


39. A company using a periodic inventory system neglected to record a purchase of merchandise on account at year end. This merchandise was included in the year-end physical count. How will these errors affect assets, liabilities, and equity at year end and net income for the year? a. b. c. d.

Assets No effect No effect Understate Understate

Liabilities Understate Overstate Understate No effect

Equity Overstate Understate No effect Understate

Net Income Overstate. Understate. No effect. Understate.

40. Which of the following is not an example of an accounting error? a. Misstatement of assets, liability & equity due to transposition and insertion errors and wrong information available. b. Increase in threshold classification of an expenditure as between expense and asset. c. Failure to recognize accrual and deferral and all proceeds were directly posted to its related income & expenses. d. Recognition of impairment on a crumbled building property which were recently destroyed by earthquake.

41. Presented below are data for KAYA-RA-NI Corp. (In Thousands of Philippine Peso) 2011 2012 Assets, January 1 5,400 6,480 Liabilities, January 1 3240 ? Shareholders’ Equity, Jan. 1 ? 3,132 Dividends paid 1,080 810 Increase in Share Capital-ordinary 972 864 Shareholders’ Equity, Dec.31 ? ? Net Income 1,080 864 How much is the net income for December 31, 2013? a. P 920,000 b. P 974,000

2013 ? 3,888 ? 918 920 3,078 ?


c. P 970,000

d. P 808,000

42. YEKO-LANG-‘TER Company provided the following information for 2013 January 1 December 31 Current Assets ? 222,000 Property, Plant & Equipment 1,600,000 1,700,000 Current Liabilities 148,000 ? Noncurrent Liabilities 580,000 ? Working capital of P 92,000 remained unchanged from January 1 to December 31, 2013. Net income in 2013 was P 64,000. No dividends were declared during 2013 and the only change in equity is that P 100,000 was appropriated for property acquisition. What is the amount of noncurrent liabilities on December 31, 2013? a. P 680,000 c. P 616,000 b. P 716,000 d. P 780,000

43. Flawless-na-Pagpasar Company carried a provision of P 2,000,000 in the draft financial statements of the year ended December 31, 2013 in relation to unresolved court case. On January 28, 2014, when the financial statements for the year ended December 31, 2013 had not yet been authorized for issue, the case was settled and the court decided the total damages to be paid by the entity at P 3,000,000 but the company filed a motion for reconsideration asking to lower down the penalty to P 2,500,000 for a major customer of the company went bankrupt on January 15, 2014 and was not able to collect half of the P 3,000,000 accounts receivable. According to the legal counsel, it is likely the petition will be accepted. But on April 15, 2014, the regional courts trashed the petition for the reason that the crime it committed will not be forgiven just because the defendant is suffering for financial difficulty and so on April 30, 2014, the company paid the P3,000,000 damages. What amount should be adjusted on December 31, 2013 as event after the reporting period if the financial statements were authorized for issue on April 1, 2014? a. P 1,000,000 c. P 3,000,000 b. P 2,000,000 d. P 1,500,000


44. I-feel that-I-am-going-to-pass-this-exam Company recognized the following information on December 31, 2013: 1/15/2014 P3,000,000 of accounts receivable was written off due to the bankruptcy of a major customer. 2/14/2014 A shipping vessel of the company with carrying amount of P 5,000,000 was completely lost at sea because of hurricane 3/11/2014 A court case involving the company as the defendant was settled and the entity was obligated to pay the plaintiff P 1,500,000. The company previously recognized a P 1,000,000 liability for the suit because management deemed is probable that the entity lose the case. 3/15/2014 One of the company’s factories with a carrying amount of P 15,000,000 was completely razed by forest fires in its vicinity. The management of the entity completed the draft of the financial statements for 2013 on February 10, 2014. On March 20, 2014, the board of directors authorized the financial statements for issue. The entity announced the profit and other selected information on March 22, 2014. The financial statements were made available to shareholders on April 2, 2014 at the annual shareholder’s meeting where the financial statements were approved. The financial statements were filed the Securities & Exchange Commission the very next day. How much will be adjusted on December 31, 2013 so that the company will not violate the PAS 10-Events after the reporting period? a. P 4,500,000 c. P 20,000,000 b. P 3,500,000 d. P 15,000,000

45. Hayag-pa-gamay-ang-pagpasar Company showed a net income of P 400,000 on December 31, 2013. The ending inventory is thrice the amount of the beginning inventory and of which it is thirty percent of the total cost of goods sold. The operating expenses is composed of administrative expenses and selling expenses. Administrative expense is equal to the twice the amount of selling expenses. Net income is one-fourth of operating expenses. The gross profit based on sales is forty percent. How much is the beginning inventory presented in the income statement? a. P 720,000 c. P 300,000 b. P 500,000 d. P 120,000


46. Butan Csir Company accounts for noncurrent assets using the cost method. On October 1, 2013, the entity classified a geothermal plant a noncurrent asset held for sale. At that date, plants carrying amount was P 3,200,000, the fair value was estimated to be at P 2,200,000 and the following cost will be incurred: Levy to the Department of Energy P 100,000 Cost of minor repairs 50,000 Commission to Agents 75,000 Payment to BIR for taxes (90% is for transfer tax) 360,000 Interest expense 10,000 At what amount the geothermal plant held for sale will be carried from October 1, 2013 until the time it will be sold? a. P 1,615,000 c. P 1,651,000 b. P 1,701,000 d. P 1,989,000 47. Bahala-ka-sir Mopasar-lageh-ko Company, the following information is available (in thousands of pesos): Cost of goods sold Sales discounts Income tax expense

P 60,000 2,000 6,000

Operating expenses Sales

23,000 100,000

In Bahala-ka-sir income statement, how much is the net income? a. Should not be reported. b. Should be reported at 9,000,000. c. Should be reported at 38,000,000. d. Should be reported at 40,000,000. 48. I-know I-can-do it Company accounts for noncurrent assets using the cost model. October 30, 2013, the entity classified a noncurrent asset as held for sale. At that date, the asset’s carrying amount was P 1,500,000, the fair value was estimated at P 1,100,000 and the cost of disposal at P150,000. On November 20, 2013, the asset was sold for net proceeds of P800,000. What amount should the net income be decreased because of the above information? a. P 550,000 c. P 150,000 b. P 700,000 d. P 0


49. Dili-nako-mailad Nimo-Sir Company had two product lines, Pasar & Bagsak. In 2013, the entity decided to discontinue Bagsak and it is probable that the disposal will be completed early next year. The revenue & expenses are as follows: 2013 2012 Sales-Pasar 5,000,000 4,600,000 TOTAL nontax expenses-Pasar 4,400,000 4,100,000 Sales-Bagsak 3,500,000 5,100,000 TOTAL nontax expenses-Bagsak 3,900,000 4,500,000 Assuming that the income tax rate is 30%, how much should be reported as loss from discontinued operations? a. P 400,000 c. P 120,000 b. P 280,000 d. P 000,000 50. In 2013, I-have to believe-that-I-will-pass Company decided to discontinue its Pessimistic division and it qualify as held for sale. On December 31, 2013, the division has not yet been completely sold. However, it is probable that the disposal will be completed within a year. Analysis of the records for the year disclosed the following information relative to the Pessimistic Division: Operating loss for the year 8,000,000 Loss on disposal of some assets during the year 2013 500,000 Expected operating loss in 2014 preceeding final disposal 1,000,000 Expected gain in 2014 on disposal of division 2,000,000 What amount should be reported as pretax loss from discontinued operation in 2013? a. 8,000,000 c. 9,500,000 b. 8,500,000 d. 0,000,000 51. Jacob, Inc., changed from the average cost to the FIFO cost flow assumption in 2013. the increase in the prior year`s income before taxes is P1,100,000. The tax rate is 30%. Jacob’s 2013 journal entry to record the change in accounting policy will include. a. A credit to Retained Earnings for P1,100,000. b. A debit to Inventory for P770,000. c. A credit to deferred Tax Liability for P330,000.


d. No entry 52. On January 1, 2007, Paragon Company paid P6,000,000 to acquire a new barge. In the belief that it was entitled to refund of purchase taxes on the acquisition of the barge, the entity claimed and was refunded P600,000 by the local government. However in late 2013, the entity repaid the refund when it became apparent that it had made an error in making the claim from the local government as it had not been entitled to the refund of purchase taxes on acquisition of the barge. The useful life of the barge is 15 years from the date of acquisition. The residual value of the barge is NIL. In 2013, the period over which the barge is expected to be economically usable increased from 15-26 years. However, the entity expects to dispose of the barge after using it for 20 years from the date of acquisition. On December 31, 2013, the entity assessed the residual value of the barge at P800,000. What is the carrying amount of the barge on December 31, 2013? a. 3,600,000 c. 3,460,000 b. 3,400,000 d. 3,420,000 53. Accrued salaries expense of P51,000 were not recorded at December 31, 2012. Office supplies on hand of P24,000 at December 31, 2013 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. The effect of these two errors would cause? a. 2013 net income to be understated P75,000 and December 31, 2013 retained earnings to be understated P24,000. b. 2012 net income and December 31, 2012 retained earnings to be understated P51,000 each. c. 2012 net income to be overstated P27,000 and 2013 net income to be understated P24,000. d. 2013 net income and December 31, 2013 retained earnings to be understated P24,000 each. 54. A company reported net income of P9,000,000 in 2013. The audit of the records revealed that ending inventory of 2012 was understated by P500,000. Insurance payment of P900,000 in 2011 was charged to expense. The insurance coverage related equally to 2011, 2012 and 2013. Revenue received in advance of P1,000,000 in 2013 was treated as earned in 2013 but it will actually be earned in 2014. Interest


payable of P2,000,000 at the end of 2013 was not recorded. What is the corrected net income for 2013? a. 5,200,000 c. 6,000,000 b. 6,700,000 d. 7,200,000 55. Gamay Nalang Utong, Inc. is a calendar-year corporation whose financial statements for 2012 and 2013 included errors as follows: Year Ending Inventory Depreciation Expense 2012 162,000 overstated 135,000 overstated 2013 54,000 understated 45,000 understated Assume that purchases were recorded correctly and that no correcting entries were made at December 31, 2012, or at December 31, 2013. Ignoring income taxes, by how much should Black's retained earnings be retroactively adjusted at January 1, 2014? a. P 144,000 increase c. P 18,000 decrease b. P 36,000 increase d. P 9,000 increase 56. It-has-to-be Na-mopasar Company has the following data in 2013 for its after tax-net income from the start of its operations: 2013 2012 2011 2010 1,800,0000 2,000,000 1,500,000 1,000,000 At the end of 2013 after the books has been closed, the accountant, STATE YOUR NAME, CPA has discovered the following errors: Accrued Accrued Expense Unearned Income Prepaid Income Expense 2013 20,000 100,000 overstated 45,000 omitted excluded 2012 70,000 60,000 understated 50,000 understated omitted 2011 50,000 100,000 overstated 10,000 overstated 30,000 overstated understated 2010 70,000 30,000 understated 35,000 overstated 15,000 understated overstated How much is the correct retained earnings for the year ended 2012? a. P 4,400,000 c. P 4,460,000 b. P 4,423,000 d. P 4,472,000


57. Di-ko-mawadan ug-Paglaum Inc. provided the following account balance and related information on December 31, 2013 Cash and cash equivalents P 3,700,000 Accounts Receivable 1,500,000 Allowance for Doubtful Accounts (200,000) Inventories 2,000,000 Prepaid Insurance 300,000 P 7,300,000  The cash and cash equivalents include the following: Cash in Bank, net of bank overdraft of P300,000 in account 2 maintained in the same bank P 1,000,000 Cash set aside by the Board of Directors for the purchase of an inventories 2,000,000 Petty Cash 10,000 Cash withheld from wages for income tax of employees 190,000 General Cash 500,000  The accounts receivable balance includes past due accounts for 2 years in the amount of P 100,000.  The merchandise inventory includes goods held on consignment amounting to P 150,000 which were not included in the year-end inventory and goods of P 200,000 purchased and received on December 31, 2013.  The company has non-current assets amounting to P 15,000,000. How much is the liabilities & equity of Di-ko-mawadan ug-Paglaum Inc. as of December 31, 2013? a. P O d. Cannot be determined with b. P 22,300,000 the given data c. P 20,300,000 58. 3-NALANG JUD Company has the following items: share capital–ordinary, P720,000; treasury shares, P85,000; deferred taxes, P100,000 and retained earnings, P313,000. What total amount should Houghton Company report as shareholders’ equity? a. P 848,000 c. P 1,048,000 b. P 948,000 d. P 1,118,000


59.   

LAST TWO Corp. had the following infrequent transactions during 2013: A P 150,000 gain from selling its automotive division. A P 210,000 gain on the sale of investments. A P 70,000 loss on the write-down of inventories. In its 2013 income statement, what amount should Chase report as other income and expense? a. P80,000 c. P290,000 b. P140,000 d. P360,000

60.

On January 1, 2009, LAST NA JUD NI Co. purchased a patent for P595,000. The patent is being amortized over its remaining legal life of 15 years expiring on January 1, 2024. During 2012, LAST determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. What amount should be reported in the statement of financial position for the patent, net of accumulated amortization, at December 31, 2012? a. P357,000 c. P420,000 b. P408,000 d. P436,375


Mid Term Exam FIN 3-Aug 2013

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