4-5 Sales 2,000,000

Sales Discount - 20,000

Net Sales 1,980,000
Cost of Sales - 800,000
Gross Profit 1,180,000
Distribution Costs - 96,000
Administrative Costs - 240,000
Dividends received form investment in FVPL 24,000
Sahres in the profit of an associate 72,000
Unrealized gain on investment - FVPL 30,000
Casualty loss on typhoon - 40,000
Interest Expenses - 44,000
Profit before tax 886,000
Income tax expense - 300,000
Profit for the year 586,000
Other Comprehensive Income
Items that will not be reclassified subsequently to profit or loss:
Loss on revaluation - 26,000
Unrealized gain on investment in FVOCI 38,000
Remeasurement of defined benefit pension plans 22,000
34,000
Items that may be reclassified subsequently to profit or loss:
Loss on transaction of foreign operation - 8,000
Other Comprehensive Income FOR THE YEAR 26,000
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 612,000

31 Initial shareholders equity 180,000

Additional sahres issued 360,000
Add: Total income earnings 1,000,000
Less: Total incurred expenses - 560,000
Less: Declared dividends - 140,000
Total Shareholders equity 840,000 A

32 Ptofit 340,000
Depreciation - 100,000
Increase in Accounts Receivables - 260,000
Increase in Accounts Payable 120,000
Net cash from operating activities 100,000 D.
33 Cash receipts from sale of goods 650,000
Cash paid for purchase of inventory - 340,000
Interest Expenses - 20,000
Net Cash flows from operating activities 290,000 C

34 B. Only the Cash payment for the acquisition of PPE.

35 Gross Profit - 400,000

Rent income 150,000
Insurance expense - 120,000
Bad debts expenses - 30,000
Net cash flows from operating activities - 400,000 D

36 C. Based on the document's data, 400,000 is the total cash flows from investing activities.

37 Cash and Cash equivalents - 440,000 B.

65 Prepaid beg. 65,000 35,000 Accrued payable, beg.

Payments 150,000 95,000 Insurance expenses (squeeze) - D
85,000 Prepaid, end.

66 Accrued beg. 100,000 170,000 Unearned, beg.

Rent Income
C (Squeezed) 665,000 560,000 Payments received
Unearned, end. 85,000 200,000 Accrued, end.

Income tax payable

67 Tax payments 760,000 beg.
960,000 Current tax expenses (Squeezed)
end. 200,000

Income tax expense (squeezed) 1,090,000 A.

Less: Increase in DTL - 110,000
Less: Decrease in DTA - 20,000
Current tax expenses 960,000

68 Unadjusted profit before tax 200,000

Write-down if inventory -
Impairment of asset - 10,000
Unrealized gain 18,000
Depreciation - 15,000
Employee benefits - 35,000
Adjusted profti before tax 158,000
69 Sales 2,000,000
Cost of sales - 900,000
Gross income 1,100,000
Commission - 100,000
Bad debts - 20,000
Depreciation - 120,000
Incurance - 20,000
Property tax - 13,000
Advertising cost - 100,000
Staff bonuses - 46,000
Loss on sale - 60,000
Repairs - 24,000
Rent - 34,000
Other operating expenses - 240,000 - 777,000
Profit before bonus to key personnel 323,000
Bonus to key personal -32300
Profit for the first quarter 290,700

1st Quarter 2nd Quarter

70 Unadjusted profit before tax 1,760,000 1,840,000
Unfavorable variance - 48,000 -
Newspaper advertisement cost - - 60,000
Unrealized (loss) gain on investments - 200,000 240,000
Research and development expense - 20,000 - 24,000
Foregin exchange (loss) gain - 20,000 30,000
Impairment loss - 16,000
1,456,000 2,026,000

Unrelaized loss and gain on the held for trading securities are computed as follows:
1st Quarter 2nd Quarter
Carrying amount before end of quarter 400,000 200,000
Fair value as of end of quarter 200,000 440,000
Unrealzed gain (loss) for the quarter - 200,000 240,000
Recovery exceeded previous write-down by 40,000

Foreign exchange loss and gain on the foregin currency dominated receivables is computed as follows:
1st Quarter 2nd Quarter
Carrying amount vefore end of the quarter adjustment 80,000 60,000
Translated at current exchange rate as of end of the quarter 60,000 90,000
FOREX (loss) gain 20,000 - 30,000

1st Quarter 2nd Quarter

71 a. Inventory write-down - 200,000
Reversal of write-down 200,000
 b. Warranty expenses - 100,000 - 340,000
c. Bad debts expenses - 40,000 - 28,000
Net effect on profit or loss - 340,000 - 168,000

a. The inventory write-down of P200,000 shall be recognized as expense in the first quarter. The recovery of the w
down of P200,000 is a reduction to expense in the second quarter. Notice that the reversal of write-down of inven
recognized is limited only to the amount of the previous writedown.

b. Warranty expense in the second quarter is computed as follows:

Total warranty espense - 1st and 2nd quarters 440,000

Warranty expenses recognized in 1st and 2nd quarter - 100,000
Warranty expenses - 2nd quarter 340,000

c. Bad debt expense in the second quarter is computed as follows:

Allowance for doubtful accounts

10,000 1/1/20x1
Write-offs 24,000 6,000 Recoveries
40,000 Bad Debts expense - 1st quarter
28,000 Bad debts expense - 2nd quarter (squeezed)
6/30/20x1 60,000

72 Requirement A:
Pre-tax profit (first P400,000) 400,000
Multiply by: Tax rate applicable for the first P200,000 profit 20%
Income tax expense on the first P200,000 profit 80,000

Pre-tax profit (first P400,000)

(200000/qtr x 4 qtrs) - 400000 400,000
Multiply by: Tax rate applicable for additional earnings 30%
Income tax expense on additional earnings 120000

Total income tax expense for the year 200,000

Divide by: Total profit for the year (200,000 per qtr. x 4 qtrs.) 800,000
Weighted average annual income tax rate 25%

Requirement B:
Quarterly income tax expenses are computed as follows:
1st qtr 2nd qtr 3rd qtr 4th qtr
Pretax profit 200,000 200,000 200,000 200,000
Ave. Income tax rate 25% 25% 25% 25%
Income tax expenses 50000 50000 50000 50000
D
B
mputed as follows:
quarter. The recovery of the write-
eversal of write-down of inventory

r (squeezed)

Annual
800,000
25%
200000