E1.

In the AI partnership, AKO’s capital is P140,000 and IKAW’s capital is

P40,000 and they share income in a 3:1 ratio, respectively. They decide to
admit SIYA to the partnership. Each of the following questions is independent
of the others. AKO and IKAW agree that some of the inventory is obsolete. The
NFJPIA CUP- MASTER IN PRAC ACCTNG

inventory account is decreased before SIYA is admitted. SIYA invests P40,000

for a 1/5 interest. What is the amount of the inventory write down?

E1. In the AI partnership, AKO’s capital is P140,000 and IKAW’s capital is

P40,000 and they share income in a 3:1 ratio, respectively. They decide to
admit SIYA to the partnership. Each of the following questions is independent
of the others. AKO and IKAW agree that some of the inventory is obsolete. The
NFJPIA CUP- MASTER IN PRAC ACCTNG

inventory account is decreased before SIYA is admitted. SIYA invests P40,000

for a 1/5 interest. What is the amount of the inventory write down?

E1. In the AI partnership, AKO’s capital is P140,000 and IKAW’s capital is

P40,000 and they share income in a 3:1 ratio, respectively. They decide to
admit SIYA to the partnership. Each of the following questions is independent
of the others. AKO and IKAW agree that some of the inventory is obsolete. The
NFJPIA CUP- MASTER IN PRAC ACCTNG

inventory account is decreased before SIYA is admitted. SIYA invests P40,000

for a 1/5 interest. What is the amount of the inventory write down?

E1. In the AI partnership, AKO’s capital is P140,000 and IKAW’s capital is

P40,000 and they share income in a 3:1 ratio, respectively. They decide to
admit SIYA to the partnership. Each of the following questions is independent
of the others. AKO and IKAW agree that some of the inventory is obsolete. The
NFJPIA CUP- MASTER IN PRAC ACCTNG

inventory account is decreased before SIYA is admitted. SIYA invests P40,000

for a 1/5 interest. What is the amount of the inventory write down?
 E2. On December 1, 2011, YOU Company leased office space for five years at a
monthly rental of P600, 000. On the same date, YOU Company paid the lessor
the following amounts:
• Bonus to obtain lease 300,000
• First month’s rent 600,000
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• Last month’s rent 600,000

• Security deposit (refundable at lease expiration) 800,000
• Installation of new walls and offices 3,600,000
What total amount of the expenses relating to utilization of the office space
should be reported for 2011?

E2. On December 1, 2011, YOU Company leased office space for five years at a
monthly rental of P600, 000. On the same date, YOU Company paid the lessor
the following amounts:
• Bonus to obtain lease 300,000
• First month’s rent 600,000
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• Last month’s rent 600,000

• Security deposit (refundable at lease expiration) 800,000
• Installation of new walls and offices 3,600,000
What total amount of the expenses relating to utilization of the office space
should be reported for 2011?

E2. On December 1, 2011, YOU Company leased office space for five years at a
monthly rental of P600, 000. On the same date, YOU Company paid the lessor
the following amounts:
• Bonus to obtain lease 300,000
• First month’s rent 600,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

• Last month’s rent 600,000

• Security deposit (refundable at lease expiration) 800,000
• Installation of new walls and offices 3,600,000
What total amount of the expenses relating to utilization of the office space
should be reported for 2011?

E2. On December 1, 2011, YOU Company leased office space for five years at a
monthly rental of P600, 000. On the same date, YOU Company paid the lessor
the following amounts:
• Bonus to obtain lease 300,000
• First month’s rent 600,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

• Last month’s rent 600,000

• Security deposit (refundable at lease expiration) 800,000
• Installation of new walls and offices 3,600,000
What total amount of the expenses relating to utilization of the office space
should be reported for 2011?
 E3. On January 2, 2012, MY Company received a consolidated grant of P
240,000,000. Three-fourths of the grant is to be utilized to purchase a
college building for students from underdeveloped or developing countries.
The balance of the grant is for subsidizing the tuition costs of those
students for four years from the date of the grant. The expected college
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life of the building is 10 years and the company uses the straight-line
method of depreciation. Applying IAS 20 – Accounting for government grants
and disclosure of government assistance, what amount of the grant is
recognized as income for the year ended December 31, 2012?

E3. On January 2, 2012, MY Company received a consolidated grant of P

240,000,000. Three-fourths of the grant is to be utilized to purchase a
college building for students from underdeveloped or developing countries.
The balance of the grant is for subsidizing the tuition costs of those
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students for four years from the date of the grant. The expected college life
of the building is 10 years and the company uses the straight-line method of
depreciation. Applying IAS 20 – Accounting for government grants and
disclosure of government assistance, what amount of the grant is recognized
as income for the year ended December 31, 2012?

E3. On January 2, 2012, MY Company received a consolidated grant of P

240,000,000. Three-fourths of the grant is to be utilized to purchase a
college building for students from underdeveloped or developing countries.
The balance of the grant is for subsidizing the tuition costs of those
NFJPIA CUP- MASTER IN PRAC ACCTNG

students for four years from the date of the grant. The expected college life
of the building is 10 years and the company uses the straight-line method of
depreciation. Applying IAS 20 – Accounting for government grants and
disclosure of government assistance, what amount of the grant is recognized
as income for the year ended December 31, 2012?

E3. On January 2, 2012, MY Company received a consolidated grant of P

240,000,000. Three-fourths of the grant is to be utilized to purchase a
college building for students from underdeveloped or developing countries.
NFJPIA CUP- MASTER IN PRAC ACCTNG

The balance of the grant is for subsidizing the tuition costs of those
students for four years from the date of the grant. The expected college life
of the building is 10 years and the company uses the straight-line method of
depreciation. Applying IAS 20 – Accounting for government grants and
disclosure of government assistance, what amount of the grant is recognized
as income for the year ended December 31, 2012?
 E4. HAUNTED Hospital, a nonprofit affiliated with a religious group, reported
the following information for the year ended December 31, 2011:
• Gross patient service revenue at the hospital’s full established rates
980,000
• Bad debts expense 10,000
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• Contractual adjustment with the third-party payors 115,000

• Allowance for discounts to hospital employees 15,000
On the hospital’s statement of operations for the year ended December 31,
2011, what amount should be reported as net patient service revenue?

E4. HAUNTED Hospital, a nonprofit affiliated with a religious group, reported

the following information for the year ended December 31, 2011:
• Gross patient service revenue at the hospital’s full established rates
980,000
• Bad debts expense 10,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

• Contractual adjustment with the third-party payors 115,000

• Allowance for discounts to hospital employees 15,000
On the hospital’s statement of operations for the year ended December 31,
2011, what amount should be reported as net patient service revenue?

E4. HAUNTED Hospital, a nonprofit affiliated with a religious group, reported

the following information for the year ended December 31, 2011:
• Gross patient service revenue at the hospital’s full established rates
980,000
• Bad debts expense 10,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

• Contractual adjustment with the third-party payors 115,000

• Allowance for discounts to hospital employees 15,000
On the hospital’s statement of operations for the year ended December 31,
2011, what amount should be reported as net patient service revenue?

E4. HAUNTED Hospital, a nonprofit affiliated with a religious group, reported

the following information for the year ended December 31, 2011:
• Gross patient service revenue at the hospital’s full established rates
980,000
• Bad debts expense 10,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

• Contractual adjustment with the third-party payors 115,000

• Allowance for discounts to hospital employees 15,000
On the hospital’s statement of operations for the year ended December 31,
2011, what amount should be reported as net patient service revenue?
 E5. THEIR Company declared a 5% dividend on its 100,000 issued and
outstanding shares of P20 par value, which had a fair value of P50 per share
before the stock dividend was declared. This stock dividend was distributed
60 days after the declaration date. What is the increase in current
NFJPIA CUP- MASTER IN PRAC ACCTNG

liabilities as a result of the stock dividend declaration?

E5. THEIR Company declared a 5% dividend on its 100,000 issued and

outstanding shares of P20 par value, which had a fair value of P50 per share
before the stock dividend was declared. This stock dividend was distributed
60 days after the declaration date. What is the increase in current
NFJPIA CUP- MASTER IN PRAC ACCTNG

liabilities as a result of the stock dividend declaration?

E5. THEIR Company declared a 5% dividend on its 100,000 issued and

outstanding shares of P20 par value, which had a fair value of P50 per share
before the stock dividend was declared. This stock dividend was distributed
60 days after the declaration date. What is the increase in current
NFJPIA CUP- MASTER IN PRAC ACCTNG

liabilities as a result of the stock dividend declaration?

E5. THEIR Company declared a 5% dividend on its 100,000 issued and

outstanding shares of P20 par value, which had a fair value of P50 per share
before the stock dividend was declared. This stock dividend was distributed
60 days after the declaration date. What is the increase in current
NFJPIA CUP- MASTER IN PRAC ACCTNG

liabilities as a result of the stock dividend declaration?

 E6. When computing the amount of interest cost to be capitalized, the concept
of “avoidable interest” refers to
a) The total interest cost actually incurred.
b) A cost of capital.
NFJPIA CUP- MASTER IN PRAC ACCTNG

c) That portion of total interest cost which would not have been incurred
if expenditure for asset construction had not been made.
d) That portion of average accumulated expenditures on which no interest
cost was incurred.

E6. When computing the amount of interest cost to be capitalized, the concept
of “avoidable interest” refers to
a) The total interest cost actually incurred.
b) A cost of capital.
NFJPIA CUP- MASTER IN PRAC ACCTNG

c) That portion of total interest cost which would not have been incurred
if expenditure for asset construction had not been made.
d) That portion of average accumulated expenditures on which no interest
cost was incurred.

E6. When computing the amount of interest cost to be capitalized, the concept
of “avoidable interest” refers to
a) The total interest cost actually incurred.
b) A cost of capital.
NFJPIA CUP- MASTER IN PRAC ACCTNG

c) That portion of total interest cost which would not have been incurred
if expenditure for asset construction had not been made.
d) That portion of average accumulated expenditures on which no interest
cost was incurred.

E6. When computing the amount of interest cost to be capitalized, the concept
of “avoidable interest” refers to
a) The total interest cost actually incurred.
b) A cost of capital.
NFJPIA CUP- MASTER IN PRAC ACCTNG

c) That portion of total interest cost which would not have been incurred
if expenditure for asset construction had not been made.
d) That portion of average accumulated expenditures on which no interest
cost was incurred.
 E7. MOTORSIKLO Motor Sales exchanged a car from its inventory for a computer
to be used as a long-term asset. The following information relates to this
exchange:
PRAC ACCTNG IN MAS

• Carrying amount of the car 600,000

• List selling price of the car 900,000
NFJPIAINCUP-MASTER

• Fair value of the computer 860,000

• Cash difference paid by MOTORSIKLO 100,000
What amount of gain should MOTORSIKLO recognize on the exchange?
NFJPIA CUP- MASTER

E7. MOTORSIKLO Motor Sales exchanged a car from its inventory for a computer
to be used as a long-term asset. The following information relates to this
exchange:
• Carrying amount of the car 600,000
• List selling price of the car 900,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

• Fair value of the computer 860,000

• Cash difference paid by MOTORSIKLO 100,000
What amount of gain should MOTORSIKLO recognize on the exchange?

E7. MOTORSIKLO Motor Sales exchanged a car from its inventory for a computer
to be used as a long-term asset. The following information relates to this
exchange:
• Carrying amount of the car 600,000
• List selling price of the car 900,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

• Fair value of the computer 860,000

• Cash difference paid by MOTORSIKLO 100,000
What amount of gain should MOTORSIKLO recognize on the exchange?

E7. MOTORSIKLO Motor Sales exchanged a car from its inventory for a computer
to be used as a long-term asset. The following information relates to this
exchange:
PRAC ACCTNG IN MAS

• Carrying amount of the car 600,000

• List selling price of the car 900,000
NFJPIAINCUP-MASTER

• Fair value of the computer 860,000

• Cash difference paid by MOTORSIKLO 100,000
What amount of gain should MOTORSIKLO recognize on the exchange?
NFJPIA CUP- MASTER
 E8. Agency VCD had the following account balances for the year 2011:
• Current Assets 10,000,000
• Investments and Fixed Assets 90,000,000
• Other Assets 5,000,000
• Liabilities
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18,000,000
• Contingent Liabilities 5,000,000
• Contingent Assets 3,000,000
Determine the Government Equity for the year 2011.

E8. Agency VCD had the following account balances for the year 2011:
• Current Assets 10,000,000
• Investments and Fixed Assets 90,000,000
• Other Assets 5,000,000
• Liabilities
NFJPIA CUP- MASTER IN PRAC ACCTNG

18,000,000
• Contingent Liabilities 5,000,000
• Contingent Assets 3,000,000
Determine the Government Equity for the year 2011.

E8. Agency VCD had the following account balances for the year 2011:
• Current Assets 10,000,000
• Investments and Fixed Assets 90,000,000
• Other Assets 5,000,000
• Liabilities
NFJPIA CUP- MASTER IN PRAC ACCTNG

18,000,000
• Contingent Liabilities 5,000,000
• Contingent Assets 3,000,000
Determine the Government Equity for the year 2011.

E8. Agency VCD had the following account balances for the year 2011:
• Current Assets 10,000,000
• Investments and Fixed Assets 90,000,000
• Other Assets 5,000,000
• Liabilities
NFJPIA CUP- MASTER IN PRAC ACCTNG

18,000,000
• Contingent Liabilities 5,000,000
• Contingent Assets 3,000,000
Determine the Government Equity for the year 2011.
 E9. On January 1, 2008, BROTHERHOOD Corporation acquired 25% of the shares of SISTERHOOD,
Inc. for P1,010,001. At that date, the equity of Twins was P4,000,000, with all the
identifiable assets and liabilities being measured at amounts equal to fair value. The
table below shows the profits and losses made by Twins during 2008 to 2012:
Year Profit (Loss)
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2008 P 200,000
2009 (2,000,000)
2010 (2,500,000)
2011 160,000
2012 300,000

Applying IAS – 28 – Investments in Associates, the income from investment in SISTERHOOD,

Inc. for year ended December 31, 2012 is _______________.

E9. On January 1, 2008, BROTHERHOOD Corporation acquired 25% of the shares of SISTERHOOD,
Inc. for P1,010,001. At that date, the equity of Twins was P4,000,000, with all the
identifiable assets and liabilities being measured at amounts equal to fair value. The
table below shows the profits and losses made by Twins during 2008 to 2012:
Year Profit (Loss)
NFJPIA CUP- MASTER IN PRAC ACCTNG

2008 P 200,000
2009 (2,000,000)
2010 (2,500,000)
2011 160,000
2012 300,000

Applying IAS – 28 – Investments in Associates, the income from investment in SISTERHOOD,

Inc. for year ended December 31, 2012 is _______________.

E9. On January 1, 2008, BROTHERHOOD Corporation acquired 25% of the shares of SISTERHOOD,
Inc. for P1,010,001. At that date, the equity of Twins was P4,000,000, with all the
identifiable assets and liabilities being measured at amounts equal to fair value. The
table below shows the profits and losses made by Twins during 2008 to 2012:
Year Profit (Loss)
2008 P 200,000
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2009 (2,000,000)
2010 (2,500,000)
2011 160,000
2012 300,000

Applying IAS – 28 – Investments in Associates, the income from investment in SISTERHOOD,

Inc. for year ended December 31, 2012 is _______________.

E9. On January 1, 2008, BROTHERHOOD Corporation acquired 25% of the shares of SISTERHOOD,
Inc. for P1,010,001. At that date, the equity of Twins was P4,000,000, with all the
identifiable assets and liabilities being measured at amounts equal to fair value. The
table below shows the profits and losses made by Twins during 2008 to 2012:
Year Profit (Loss)
2008 P 200,000
NFJPIA CUP- MASTER IN PRAC ACCTNG

2009 (2,000,000)
2010 (2,500,000)
2011 160,000
2012 300,000

Applying IAS – 28 – Investments in Associates, the income from investment in SISTERHOOD,

Inc. for year ended December 31, 2012 is _______________.
 E10. MIKAELA Company’s shareholders’ equity on December 31, 2011 is:

• 6% noncumulative preference share capital, P100 par,

liquidation value of P105 per share 1,000,000
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• Ordinary share capital, P100 par 3,000,000

• Retained Earnings 950,000
Preference dividends have been paid up to December 31, 2011. On December
31, 2011, what is the book value per ordinary share?

E10. MIKAELA Company’s shareholders’ equity on December 31, 2011 is:

• 6% noncumulative preference share capital, P100 par,

NFJPIA CUP- MASTER IN PRAC ACCTNG

liquidation value of P105 per share 1,000,000

• Ordinary share capital, P100 par 3,000,000
• Retained Earnings 950,000
Preference dividends have been paid up to December 31, 2011. On December 31,
2011, what is the book value per ordinary share?

E10. MIKAELA Company’s shareholders’ equity on December 31, 2011 is:

• 6% noncumulative preference share capital, P100 par,

NFJPIA CUP- MASTER IN PRAC ACCTNG

liquidation value of P105 per share 1,000,000

• Ordinary share capital, P100 par 3,000,000
• Retained Earnings 950,000
Preference dividends have been paid up to December 31, 2011. On December 31,
2011, what is the book value per ordinary share?

E10. MIKAELA Company’s shareholders’ equity on December 31, 2011 is:

• 6% noncumulative preference share capital, P100 par,

NFJPIA CUP- MASTER IN PRAC ACCTNG

liquidation value of P105 per share 1,000,000

• Ordinary share capital, P100 par 3,000,000
• Retained Earnings 950,000
Preference dividends have been paid up to December 31, 2011. On December 31,
2011, what is the book value per ordinary share?