UNIVERSITY OF SAN CARLOS SCHOOL OF BUSINESS AND ECONOMICS DEPARTMENT OF ACCOUNTANCY MIDTERM DEPARTMENTAL EXAM (OCTOBER 2019) AC 2101 “HE WHO DOES NOTHING MAKES NO MISTAKES, HE WHO MAKES NO MISTAKES LEARNS NOTHING.” > LUCA PACIOLT CHOOSE THE BEST ANSWER (NX2) 1. Classify properly the following items: [Asa reward of past services, Company B offers to sell shares at a discount of 10% oftheir market price to all of its employees, but not to shareholders who are not employees. There are no conditions attached to the share other than paying the subscription price. Employee E, who is a shareholder f B, purchases such a share. II Company C makes & rights issue to all of its shareholders in which shares are offered at a discount of 10%of their market price. There are no conditions attached to the shares other than paping the subscription pricy, Employée E,who is a shareholder of C,purchases such a share. = he a. Both scenarios are share based payment transactions b. Both scenarios are based payment transactions ¢. Only the 1% scenario a share-based payment transaction <4, Only the 2» scenario a share-hased payment transaction @ Hmmm. % 2, Acontract that gives the holder the right, but not the obligation, to subseribe tothe entity's shares at a fixed or determinable price for a specified period oftime. “a, Share options Intrinsic value Equity instrument ’. Vesting condition 4. Performance condition 3, Which of the following is correct in relation to the modification of vesting? ‘a. Modification of vesting is not beneficial to the ‘employees if there is an decrease in option price, thus compensation expense is computed based on the original condition disregarding the modification. b, Modification of vesting is not beneficial to the employees if there is an increase in option price, thus the compensation expense 1s computed based on the original condition and the modification. c. Modification of vesting is beneficial to the employees if there is a increase in option rice, thus compensation expense is computed based on the original condition disregarding the modification. 4. Modification of vesting is beneficial to the employees if there is a decrease in option price, thus compensation expense is computed based on the original condition and the modification. e, None of the above. 4, How many of those items are considered as Agricultural Activity? 1 Managing animal - related recreational activities - ~ I[-- Natural breeding of animals in z00s and game parks ~ II - Ocean fishing IV -Fish Farming V — Development of living organisms such as cultures, research purposes. ~ ‘VI__ Growing of plants to be used in the production of drugs ~~ a. Two items or less “Four items e. Six Items >. Three items 4. Five items I, bacteria and viruses for MIDTERM DEPARTMENTAL EXAM 2019 ~ AC2101 (ROA) ed Scanned with CamScannera Biological aan is incorrect? S tSSetS ate t Yeport ri ‘© be measured o valet Peod at thy red ou lnitial recognition and at the end of each ®. priggentat be Measured reliably n*C*mMted cont to ell except where the fait + etal produce i fair val ‘ed from an entity's biologica assets should be m¢ © The pr mie estimated costs to sell at the Vine fare measured that presumption syenttfAt value enn be menaured rliehy for a biological asset, & The gain or tae yt be butted, only atthe time af intial secoget included in other int om the initial recognition of agricultural produee should be 7 ein other comprehensive income None of the above. 6. With rey Bards the initial me a 2 ‘The cost of purchase tase ‘asurement of inventory, which of the following is incorrect? comprise the purchase price, import duties and other recoverable ; transport, handling and other cost direct finished goods, materials and services, ‘The cost of conversion of inventories produstion, dire ly attributable to the acquisition of include cost directly related to the units of such as direct labor and the systematic allocation and variable production overheads that are incurred in converting materials into finished goods, & Other costs that may be appropriate to include-as part of the inventory are non production overheads or the cost of designing products for specific customers in the cost of inventories, ‘The cost of inventoriés of service provider does not include profit margins or non: attributable overheads that are often factored into prices charged by service providers, “ + Which of the following is/are correct in relation to the standard number and title? 1* statement“ PFRS 2 — Share*based Payments 2! statement:PAS 2 — Inventories / 3 statement:PAS 41 — Biological Assets < +#* statement!PAS 16 - Property, Plant and Equipment “ a. Only one statement is correct b. Only two statements are correct _& Only three statements are correct 4. All statements are correct . None of the statements are correct inventory can be valued at? r va a. Sales price ¢. Historical cost b,_Net realizable value _d. Sales price reduced by estimated cost of disposal 8. When inventory declines in value below original cost what is the maximum amount that the 9. What is the effect of freight in on the cost retail ratio when using the conve retail method? a. Increase the cost retail ratio ¢. Depends on the amount of net markup ‘b. No effect on the cost retail ratio d. Decreases the cost retail ratio ey 10. Which of the following is/are considered as inventory? 1 Finished goods out on approval ~~ oe —Materials in transit shipped, FOB shipping point x it ~The cost of actually producing the computer software from masters and packaging it = e : a Goods held for sale fora brief period of time like emulsified asphalt that hl be used within a few hours after its receipt. (cannot be stored, sold immediately ve (MIDTERM DEPARTMENTAL EXAM 2019 ~ AC2103 (ROA) Scanned with CamScanner{ a. Tonly e1,1 andl D. Tand I only 4 @.1, 11, 1 and IV + T.Which of the following isfanp-sicorredy in relation o the definition of the terms as stated by the standard? =U atenientA shave: based puymentia a tr ces either as‘eonsideration for ity action in which the entity receives goods or juity instruments or by incurring liabilities for / ‘tmounts based on the frice of the entity's share or other equity instruments of the entity. | ce ot gal‘ lnventorioswze assets Hild forsale inthe ordinary cburse of business, in the the prada tetion for such sale or in th form of materials or supplies tobe consumed in the p roduction Process or in the rendering of services, ™ statement: Biological assot isa living animal or plant ewe ptel © yiiement: Property, plant and equipment are tangible assets that are held for use in fh Production or supply of goods or serviedy or rental ta others, or for administrative purposes, ‘nd ave expected to be used during moye than one period. — a. Only one statem ent is incorrect! b. Only two ‘tements are incorregt &--Only three statements are incorrect | d. Allofthe statements are incorrect e. Allof the statements are correct 2-How many of these item/s ial Equipment? ~ An entity owns a factory buildinjtin which it manufactures its products, Ty AR entity owns «building occupied by its administrate toot TIL ~ An entity owns a mator vehicle for the exclusive business and private use of its chief financial officer. IV— An entity acquired a license to operate a taxiin a major city, 3 \ ~ An entity. manufactures chemicals. It services ite manufacturing plant using common low value(foo/s acquired from a local hardware store, VI~ An entity that operates an executive aviation sevviee is required to have its jet aircraft inspected for faults by the national aviation authorities every two years. Aw inspection was made halfway through the current annual reporting period at a cost of P20 000 or a, Two or less £-Fouritems above e, All of the items above b. Three items above Five items above ‘are considered part of the cost of Property, Plant and —~ ae 13.Some major spare parts are properly classified a: subjected this to depreciation, Based on IAS 16 w! on these two different cases: I- Spare parts have been bou without interruptions. Il — Spare parts have been bought and keep in a warehouse to be used as a replacement part at some future time and you are sure that this part will be installed and put into use at a later date: a, On both instances the depreciation should start'immediately b. On both instances the depreciation will start once the spare parts is installed and brought into use. PPE of TRABAHO KO COMPANY and ‘hen are you going to begin the depreciation ight and keep in a warehouse to ensure smooth operation On scenario I, the depreciation will start immediately while scenario II, the 7 depreciation will start once the spare pats is installed and bought into use, d. On scenario I, the depreciation will start once the item is installed and ‘bought into ~ use while scenario If, the depreciation will start immediately, e. It is the prerogative of the accountant when to start the depreciation as the standard is generally silent about depreciation, MIDTERM DEPARTMENTALEXAM 2019 ~ ACZ104(RDA)_ Scanned with CamScanner14.16 the PPE y : Was acquired ¢ substance, the new PPE wine i Be Pan, Vue of asset given up oatt Value of asset received Carrying amount of the ‘arrying amount of the & Ateost ‘change and determine id that there was a commerci sured at a Asset given up Wsset received 15. Which of the following do of depreciation, { Composite method ~ Sum of the year's digits ©. Declining balance method 4. Double declining balance © Allof the above ate decreasing charge method. 16. On January 1, 2014, Barbarossa Company grante cin tocertain key employees as additional compensation, The options vet logo linary shares of P10 par value 4 The pantion price ofP15 per share. Market price ofthis share on January 1, 2014 wae oo. {rie fair value of each share option on January 1, 2014 i4 P& he options wore cance” beginning January 1, 2014 ces ire on December 31, 2016. On December 31, 2014, when ‘Preciation method is not considered a decreasing charge method the share was trading at(P21) all share options ‘were exercised, Whet amount of compensation expense shouild-b6 reported in 2014 in connection with the share options? a. P800,000 «. P2,000,000 «. PGG8,667 b. 266,667 4 P1,500,000 17.At the beginning of year 1, an entity grants 1,000 share options t0 dmployees. The share options will vest at the end of yeaf 3, provided the employees remain in service until then. The share options have a life of 10 years. The exercise prie is POD And the entity's share rice is also(P60 at the date of grant. At the date of grant, the entity concludes that it cannot. estimate_reliably the fair value of the. share option-granted. At the end of year 1, three employees have ceased employment and the entity estimates that a further seven eriployees will leave dui Pand'3- Hence the entity, estimates that 80% of the share options will vest, = a ‘Two'employees leave during year 2, and the entity revises its estimate of the number of share options that it expects will vest to 86%, ‘Two employees leave during year‘3, Hence 43,000 share options vested at the end of year 3, re The entity share pice during years 1°5, and the number of share options exercised during 4-5, are set out below. Share options that were exercised during a particular year were all exercised at the end of the year. ‘Year | Share price at year end_| # of share options exercised at year end 1 P63, 0 oy : 2 65 0 . £3) 75, 0 £ 88. 6,000 i 5 85 #000 ¥ much is the compensation expense in year 3? ev "501,667 ne ©, PA13,333 e. P492,000 b, P495,000 ~ 4.P430,000 4 i (MIDTERM DEPARTMENTAL EXAM 2019 - AC2101 (RDA) { ‘os Sg SG giao a ia ae Sd Scanned with CamScanneraw eee ee ait , has granted 20, Use the following information for #18-#19, Jayruch, 4 public utility’ co aehts se duo tooat appreciation rights to each ofits $00 employees on January 1, 2025 9°” ono that 80% ofthe December 31, 2024 with payment being made on December 31, 2020 awards vest. Share prices are as follows: [January 1, 2021] P30] ov Jonge? x vo =k ye | Decembay 81, 2021 December 31, 2024 [Decembes 31, 2025 | (38 |/ 18. What is the lability willbe vecogniagdl on Deoember 81, 2024 for sa the share appreciation rights? a. 300,000 c. P420,000 e, P150,000 b. P96,000 4, P120,000 2 19, How should the settlement of thé ae be aczpunted for on December 81, 2025? 2, Payment to employees of P96,060; no gain }, Payment to employees of P64,000, gain of P32,000 Na, 6 ‘c~ Payment to employees of P96,000; with gain of P16,000 d. Payment to employees of P32,000, gain of P64,000 , Payment to employees of P64,000, no gain Use the following information for #20#22.'On January 1, 2024, JM Company granted to an employee the right to choose either shares or cash payment. The choices are.ag follows ‘Share Alternative equal ‘og sostie with par valueofP45) J, 87,.v6 Cash Alternative ~ cash equal to the market value of £30,009 shares 3oyovo 7h Myo ‘The grant is conditional upon the completion of three years of service. On grant date, on January 1, 2024, the share pri E10 Te share prices for-the.three year vesting period ar€P8Don December 31, 2024, mn December 31, 2025 and £97.50 bn December 31, 2026. After taking into account the effect-of vesting restrictions, the entity has estimated that the fair value of the share alternative i P12, ) 303,79 30%. 20. What is the compensation expense for 2026? Tt BI. a. P1,305,000. ‘c. P945,000 e.P2,115,000 74 b. P1,350,000 4. P1,080,000 igor 21, What is the share premium if the employee has chosen the share alternative on December 31, 2026? a, P1,980,000 «. P1,687,500 , P1,525,000 b, P1,237,500 4. 1,642,500 2, What is the share premium if the employee has chosen the cash alternative on December 31, 2026? a. PO , PA05,000 e. P2,925,000 b, P1,575,000 4. P1,642,500 23.A physical count on December 31, 2025 revealed that Trololo Company had inventory with a cost of PS, 500) The following items were excluded from this amount: ‘« Merchandise costing P382,500 purchased FOB shipping point was shipped by the supplior on December 31, 2025 and received by Trololo on January 5, 2026 ~~ «Merchandise costing P622,500 shipped by a vendor FOB destination on December 81, 15 was received by Trololo on January 15, 2026 . + Merchandise costing (P345,000 was shipped by Trololo FOB shipping point to a customer on December 29, 2025. The customer was expected to reesive the goods on January 10, 2026. ae : “Merchandise costing(P 457,500 is held by Trololo on consignment. _ > Merchanise costing P285600 was shipped by Trulslo FOB destination toa customer on December 31, 2025. The customer was expected to receive the goods on January 6, 2026, . it amount of inventory should be reported on December 31, 2025? MIDTERM DEPARTMENTAL EXAM 2019 ~ AC2101 (RDA) Scanned with CamScanner: ©. P3,975,000 e. P5,400,000 b, P2,850,000 4, P3,690,000 at 24. KULBA HINAM COMPANY began operation in 2025 expenditures in purchasiny * Purchase In 2025 it incurred the following if materials for producing its product! Price of raw materials — P3,000,000 = ,3w 000 Import duties and other non-refundable purchase taxes ~ P800,000 Other fees to process the purchase ~ P200,000 * Refundable purchase taxes ~ P100,000 * Freight costs for bringing the goods from the supplier to the factory raw material ‘storeroom - P300,000 Cost of unloading the materials into the raw material storeroom ~ P2,000 On December 31, 2025 the entity received P53,000 for volume rebate from a supplier: for Purchasing more than P1,500,000 from the supplier during the year. How much is the total cost of purchase? a,-P4,349,000 c. P4,300,000 e. None of the above “b. Pé.249,000 4. P3,000,000 - 25.Poor Company measured inventory at a lower of cost arid net realizable value. Data regarding the items in the inventory are as follows: Bond Papers | Intermediate Pad | Yellow Pad Historical Cost 120,000 94,000 [150,000 ‘Selling Price 180,000 125,000 | 180,000 Estimated cost to complete 24,000 25,000 34,000 Replacement cost 104,000 84,000] 159,000 [Profit margin 25% 25% 10% What is the measurement ofinventory? a. P347,000 — b. P338,000 ©. 364,000 4. 360,000 26.Based on a physical count at year end, Cherry Company determined the candle inventory on a Weighted average basis at P9,100,000 with a replacement cost of P8,750,000, 3/0) Cts Cherry Company estimated that, after further processing costs of P4,200,000, the candle could be sold as finished items for P14,000,000. The normal profit margin is 15% sales. How much will be the loss on inventory writedown? a, P700,000 : e. P1,400,000 PO . P1,050,000 d. P350,000 Use the following information for items #27428, Di the following information pertaining its inventory: ee Units [Unit Cost [Total Cost. i January 1 Balance | 20,000 | P10__| 200,000 ‘ Sales ~Jan15 |" 15,000 Purchase - Jan 181 20,0007) 11 uring January 2022 Forlorn Company recorded 220,000 Purchase — Jan 20| 15,000.) . 12 180,000 {yrisie Sales — Jan 25 | 14,000 15, 210,000 [6s Purchase - Jan 30 10,000 27-If the company is using the moving average method, what amount of inventory should Forlorn Company report in its January 2022 statement of financial position? 240,000 ©. P280,000 ‘ee 260,000 -—~ 4. P300,000 26, fthe company is using the FIFO, what amount of inventory should Forlorn Company report __ in its January 2022 statement of financial position? y , ee ‘240,000 . P280,000. P10 Die. > 6 _b, P260,000 4. P282,000 He / 7h ow | i (MIDTERM DEPARTMENTAL EXAM 2019 - AC2101 (RDA) | ‘Scanned with CamScanner: 2019, a fire broke out in’ warehouse of Regal Company destroying all inventory. current year, 7 pocaoo0] '1%70 —E"7o,000} | 3170 5,960,000 9 400,000) J T,on “100,000 77,09 0 supplie Goods ow on consignment at sales price fie 4 Salvage value of inventory iI | __ 30,000) 29.1f the gross profit 25% hhasod on sales, how much will be the inventory fire loss a. P245,000 ~ c. P180,000 08 | ‘b, P270,000 \ d, P155,000 30.If the gross profit ig 25% based on cost, how much will be the inventory fire loss? a. P50,000 _ c. P70,000 e. none of the above b. P2,000 * d. P22,000 Uso the following information for items #31#33. Grotesque Company has employed the retail method of valuing it inventory. The inventory dat ae as ellos ‘Cost | Retail 6 fe Beginning Inventory 'P250,000 | P385,000 Purchases 1,539,000 [2,155,500 ‘Transportation In 35,000 216,599 Purchase Return 12,500)| 20,000 Purchase Discount 22,500 to Mark Up _——| 60,000 ‘Markdown, Team (76,0003) 202 ‘Cancelation of Markup 16,000) ~~ 70, bee Cancelation of Markdown 5,000)} 2 a5 ( [Abnormal Spoilage 4000; 6500) 4G 4 oles} [Sales Gane _[——— [900,000 | [Sales Return Tbs) Tite we | (40,000) Sales Discount 10,000] |) poy, ow Employee discount 500,000 | | ————— \_ [Estimated normal shoplifting losses 600,000)" 40 31.lf the company uses the average method, how much is the cost of ending inventor}? a. P301,000 . P294,000 eP3I925 yy . P315,000 a. 322,500 sie 32. f the company uses the conservative method, how much is the cost of ending inventory? a. P801,000 . P294,000 ©, P819,125, ». 315,000 4. P322,500 38.1f the company uses the FIFO method, how much is the cost of ending inventory? a, P319,200 —" P827,685 ©. P822,500 a b, 323,400 d.P319,125 seen, Use the following information for items #34-/#35)On November 15, 2019, Diamond Company centered into a commitment to purchase 15,000 ounces of gold on February 16, 2020 at a price of P310 per ounce. On December $1, 2019, the market price of gold is P270 per ounce. On February 5, 2020, the price of gold is 2820 per ounces "7 ve NRE 34, What amount should be debited to Purchases on February 15, 2020? ‘a. P4,800,000° =~" 4,650,000 Zoe Bae \ ~_ b. ‘P4,050,000 d. P4,725,000 35. What is the gain/loss on purchase commitment to be recognized on February 15, 20202 ‘ay Loss of P750,000 © ———~€. Loss of P450,000 ¢,Gain of P600,000 | b. Gain of P450,000 4. Gain of P750,000 ms MIDTERM DEPARTMENTAL EXAM 2019 ~ AC2101 (RDA) Scanned with CamScanner(rhe following information for items #36-437. A public limited company Cornell Dairy products Produces milk on. its farms, As of January 1, 2018 Cornell has a stock of {(050.cows (ave a 2 sears old) and 150 catabaos (average age, 1 year old). Cornell purchased 375 darabaos, average age I year old, on July 1, 2018, No animals were born or sold during the year. The unit values less estimated costs to sell were: * Lyear old animal at December 31, 2018 ~ P3,200 ce ar old animal at December 31, 2018 + 4,600 + 8,600 © 1.5 year old animal at December 31, 2018 000 © 3year old animal at December 31, 2018 : : © Lyoar old animal at January 1, 2018 and July 1, 2018 3,000 277 1 + 2year old at January 1, 2018 4,000 ¥ hore = 4 200, 05 Tov 36, The increase in value of biological assets in 2018 due to price change is? ¥ ‘ a P630,000 —~e, P1,500,000 hie 7 b. 870,000 d, P750,000 37. The increase of b | asset in 2018 due to physical change is? a, P630,000~ , P1,600,000 b, P870,000 dd, P750,000 498-#40. KulangStudyMagML.TA Company had che d Equipment at'the beginning of the year: Land — = P2,450,000. The following are transactions related Use the following information for items following.balances of Property~Plant anc 8,500,000; Building ~ Pa :00000;Machinery’ to these-accounts for the year a¥€ as follows: a ‘+ Additional land and building are acquired at a single cost of 8,250,000. 3 values were determined during the purchase. Carrying Amounte | Fair Values ‘3,250,000 | _P4,900,000 he following ‘Land ‘Building 5,000,000 | ~ 6,000,000 + Purchased a machinery foryP120,000, “The company uses the gross method of fiscount period. The entity incurred cost of P25,000 in removing the old machine prior to'the installation of the new one. >< «Purchased a building for(P750,000 down and four monthly installment of P1,875,000. The cash price equivalent of the machine was P7,050,000 a Purchased a land at the beginning of the year for P3,000,000 in exchange for a noninterest bearing note requiring four payments of P750,000 with interest of 16%. The first payment was made at the end of the current year. (Round off PV factor to two decimal places). ' ? + Purchased a machinery by issuing 5,000 shares with par value of P50. At the time of acquisition, the fair value of the machinery is P400,000 and the share is quoted at P90 per share. The carrying amount of the machinery based on the books of the seller was P425,000. + Anite land was acayized fora currently undetermined used by issuing bonds payable ‘with face amount of P5,000,000. At the time of acquisition, the fair value of the building is recording and paid beyond the 6,000,000 and the quoted price of the bonds is P5,800,000 Lanlgtecy + KifarigStudyMagML.TA Company and TeamAccounting.NoLife exchanged machineries. i KulangStudyMagML.TA | TeamAccounting NoLife Maehinery py idi09. P2,400,000 P3,000,000 Accumulated Depreciation 1,350,000, 2,025,000 Carrying. Amount 1,050,000 975,000 Fair Value : 900,000 1,200,000 Cash paid by 300,000 KulangStudyMagML.TA . Resaived aland ay joe shareholder as an inducement to locate a plant in the city. No payment was required but the entity paid for P75,000 for | s fe PEGS au cient aokee PT for legal expenses for land transfer. A buildit : rating ornoon by the. management as held for sale in the middle of the year 8 oe P Scanned with CamScannerthe Property, Pla * S8:A1 the ond of tho your, how much will be the value of Land under nt Equipment ‘tecount? 7 a. P13,463,700 c. 21,312,500 oe, P21, 262,50 b, Pan297,600 d. P15,497,500 39.At i end of the year, how much will be the value of Buil and Bquipmont account? a. P1,90,000 «6 P17,00,000 e. 1s, 800.000 b. P16,000,000 d, P1G,,050,000 10.At the end of the year, how much will fe the value of Machinery under tl and Equipment account? 000, . P2,967,600 ©, P2,992,600 70,000 d.P3,020,000 sing under the Property, Plany ‘he Property, Plant ‘1 Dating the yeur, Valix Company purehyised « new machine, P120,000 down payment Was Pade sand three monthly installmenjs:of P3G0,000. ‘The eadh price would have been P2.160,000. The entity paid no installition changes under the monthly plan but a 20,000 installation charge would have been iheurred with a eash purchase, What amount should be capitalized as cost of the machinery? a. P1,160,000 ¢.P1,200,000 _e. Pi,100,000 b. P1, 180,000 . P1,220,000 : {the following information or items #42842, Nicko Company purchased a tract of land as a factory sit id building was demolished and construction began on the new building. ed price of land and an old building “P4,500,000 Bair value of old building (250,000) Cost of demolishing old building 300,000: | urance and legal fees to purchase land [200,000 chitect foe 950,000 New building construction cost 8,000,000. Survey before construction I 100,000 Building permit or payment to eity hal for approval of bullding construction [iso 0001 | Excavation before new construction 200,000 | Liability insurance during construction 100;0007— New fence surrounding the new buildin 100,000]— Driveway, parking bay and safety lighting 550,000 Cost of trees, shrubs and other landscaping 300,000 | Cost of lighting and signage 100,000 | Salvage of materials resulting from demolition 50,000} ~ [ Special assessment from the government 65,000 Cost of temporary building used as construction offices and tools 95,000 Immovable shelves, cabinets and partitions 25,500 Ventilating system and elevator installed during construction 230,000 |~~ Real property tax on land after purchase 18,000 42.How much will be the value of Land under the Property, Plant and Equipment _a—P4, 450,000 c. P4,615,000 e. P4,633,000 b. P4,850,000 4. P4,550,000 43.How much will be the value of Building under the Property, Plant and Equipment a. P9,950,000 _- _ ¢ P10,075,000 e. P10,000,500 b, P9,800,000 4, 9,700,000 + 44. During the current,year, Condrado Company incurred the following costs for a printing press: Ae * Purchase of collating and stapling attachment —_~ P840,000 * Installation of attachment ~ 960,000 Replacement parts for overhaul of press + 260,000 ‘* Labor and overhead in connection with overhaul - 140,000 MIDTERM DEPARTMENTAL EXAM 2019 ~ AC2101 (RDA) sna, Scanned with CamScannerpe eth resulted jn che Overhaul increased me eRificant sed inerea, ela the estimated useful leo sc Nether she setae ome 2P 1,600,000 . What total amount should be >. P1,200,000 ©. P840,000 PO : 4d, P620,000 i fe Use the following f Ing information foy useful life of 50 oh, ems #45'#46. Reiborn Company purchased a building with a ears. The pr ¢ P10,000, Purchase price was P15,000,000 with an estimated residual value of 's making a comp: trative analysis of its depreciation-me aves aly p thod and ranking expense will be. west. The proper ranking for the. 2"! year's depreciation’s aD ce declining method, Sum of the year’s digit, straight line method 6. Straight tt iit, Double declining method, Straight line method Tuite line method, Sum ofthe year's method, Double declining method e Souble declining method, straight line method, sum ofthe year's digit 6.1 the PumOt the year’s digit, straight line method, double declining method building will be sold at the end of the‘5" year for P12,200,000. Which of the following depreciation method will result to gain/loss on sale of PPE? __ Straight Line |_| /Sum of the year's digit’ | Double Declining rn Loss —_ [Loss g Loss Great! oe Loss [Loss Gain oa Loss, Gain Loss 56 Gain Loss. «| Loss DY None of the above ee uUe 47.JM Company is considering on the appropriate pattern to apply on one of its manufacturing equipment: ‘Year | Straight Line | Sum of the Years Digit | Double Declining 1 90,000 150,000 200,000 2 90,000 7 120,000 120,000 3 90,000 90,000 72,000 4 90,000 60,000 43,200 5 20,000 30,000 14,800, ‘The cost of the machine will be’ UT oh er yeh a-P450,000 ¢, P460,000 e. P520,000 b. P475,000 . P500,000 = hayes oU8 48.Eve Company purchased a machine on January 1,,2018 for P6,000,000. At the date of acquisition, the machine had a useful life of six years with no residwal_value. The machine is being depreciated using a straight line method. On January 1, 2021, Eve company change the estimated useful life and recorded a depreciation expense for the year of P600,000. The new estimated useful life of the equipment from the date of acquisition will be? a.” Syears ©. Tyears e. none of the above b-Byears d. 8years 49.0n January 1, 2021, Able Company purchased a machine with a useful life of 10 years with no residual value, The machine was depreciated by the double declining halance method. ‘The entity changed to the straight line method on January 1, 2023. The accumulated depreciation as of December 31, 2013 was P2,640,000. What was the original cost ofthe machine? a. P7,333,333, c. P9,428,571 e. none of the above b. P6,000,000. “4, 5,400,000 pr > 3 bo(S—-)* te weve Wet ME. treve Pe. v9, 00 a 3,09 +2, sew $ SRee Gyno Pe Sagan operas MIDTERM DEPARTMENTAL EXAM 2019: ~ACzI01 (RDA) 3 : y Vupee | "Scanned with CamScanner60 Silent Company provided the following schedule of machinery. Useful life i = Total Cost ‘Estimated Residual Value in P550,000 50,000 |-1.« Machine B 200,000] | 7%° 20,000 |" [Machine ie 40,000 [> 5\ What is the composite rate? 7 ee “ a. 6.25% 70% e. none of the above b. 91.14% a. 16% ‘HELP COMES TO THOSE WHO ARE AWAKE, NOE TO THOSE ASLEEP” - LUCA PACI OL Agahaver O88 Hae Scanned with CamScanner