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Acc 109p2 Quiz Revenue Recognition and Non Current Assets Held For Sale PDF Free
Acc 109p2 Quiz Revenue Recognition and Non Current Assets Held For Sale PDF Free
GENERAL INSTRUCTIONS:
A. TEST PAPER, PENS/PENCIL, CALCULATOR AND DRINKING WATER ARE ONLY ALLOWED
TO BE USED DURING THE TEST. ALL OTHER THINGS MUST BE PLACED IN FRONT OF
THE ROOM.
B. WRITE YOUR ANSWER ON THE SPACE BEFORE EACH NUMBER.
C. STRICTLY NO ERASURES, SUPERIMPOSITIONS, CUTTING OF PAPER, OR ANY OTHER
MEANS IN ALTERING YOUR ANSWER.
D. USE BLACK OR BLUE INK IN WRITING YOUR FINAL ANSWER. ERASABLE INKS ARE
PROHIBITED.
E. NON-COMPLIANCE FOR INSTRUCTIONS A-D WILL GIVE THE STUDENT CORRESPONDING
DEDUCTIONS.
F. TIME ALLOTMENT: 55 MINUTES
G. POINTING SYSTEM: PART I – 1 POINT EACH; PART II – 2 POINTS EACH.
PART I: THEORIES
________1. ABC Co., a seller of concrete aggregates, enters into the following
contracts:
i. A contract with Delta Co. to deliver goods. Payment is due one month after
delivery.
ii. A contract with Echo Co. for the sale of 300 units of each of Products X
and Y. The contract states that the price of Product Y will be
retrospectively reduced by 50% if Echo Co. makes a cumulative purchase of
at least 1,000 units of Product X within 6 months.
iii. A contract with Fafa Co. to deliver goods. At contract inception, Fafa
Co. is broke. ABC Co. expects that it can only collect 50% of the
consideration.
iv. A contract with Gamma Co., an entity which is also engaged in the concrete
aggregates business, to exchange inventory to facilitate sales to
customers in different geographical areas of operations.
Identify the contracts to which PFRS 15 Revenue from Contract with Customers
may not be applied.
a. Delta and Echo c. Fafa
b. Fafa and Gamma d. Gamma
________3. ABC Co. enters into a contract with XYZ, Inc. to deliver 2 apples,
3 mangoes, and 5 potatoes for a total consideration of ₱100. In accounting
for the contract, which of the following is probably not true?
a. ABC Co. identifies three performance obligations in the contract.
b. ABC Co. allocates the ₱100 transaction price over the promises to deliver
the apples, mangoes and potatoes on the basis of relative stand-alone
selling prices of those goods.
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ACC 109: INTERDMEDIATE ACCOUNTING, PART 4 2ND GRADING PERIOD
REVENUE RECOGNITION AND NCA HELD FOR SALE QUIZ
________4. ABC Co., a manufacturer and dealer of printing machines, had the
following transactions during the period:
I. ABC Co. receives an order for the manufacture of a customized machine for
a customer. The customer pays half of the consideration at contract
inception. The manufacturing lead time is 1 year. ABC Co. subcontracts a
portion of the manufacturing to XYZ, Inc., another manufacturer.
II. ABC Co. receives an order for a standard machine. Payment is due only
after ABC Co. has delivered and installed the machine. Additionally, the
contract requires ABC Co. to perform free maintenance services over a 3-
month period after the machine is installed. ABC Co. completes the
delivery and installation by the end of the reporting period; however,
the maintenance period is not yet over.
III. ABC Co. receives an order for 2 machines. The first machine is delivered
at contract inception but the second machine will be delivered after two
months. Payment is due only after both machines are delivered. By the end
of the reporting period, the second machine is not yet delivered and the
consideration is not yet collected.
Identify the contracts to which PFRS 15 Revenue from Contract with Customers
may be applied.
a. Contract 1 c. Contracts 1, 2 and 3
b. Contract 3 d. None of these
________7. The best evidence for the stand-alone selling price of a good or
service is
a. the list price of the good or service
b. the contractually stated price of the good or service
c. the observable price at which the good or service can be sold separately
under similar circumstances and to similar customers
d. the entity’s estimate of the stand-alone selling price
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ACC 109: INTERDMEDIATE ACCOUNTING, PART 4 2ND GRADING PERIOD
REVENUE RECOGNITION AND NCA HELD FOR SALE QUIZ
________9. During the period ABC Co. transfers goods to XYZ, Inc. Which of the
following does not indicate that the transaction is a consignment
arrangement?
a. ABC Co. retains legal title over the goods until XYZ, Inc. sells them to
third parties.
b. ABC Co. can require the return of any unsold goods within 60 days.
c. If XYZ, Inc. is not satisfied with the goods, XYZ, Inc. has the right to
return them to ABC Co.
d. ABC Co. can require XYZ, Inc. to transfer the goods to 123 Corporation.
e. XYZ, Inc. is not obligated to remit any payment to ABC Co. unless XYZ,
Inc. sells the goods
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ACC 109: INTERDMEDIATE ACCOUNTING, PART 4 2ND GRADING PERIOD
REVENUE RECOGNITION AND NCA HELD FOR SALE QUIZ
________2. On 1 July 20X7 The Otakamiro Company handed over to a client a new
computer system. The contract price for the supply of the system and after
sales support for 12 months was ₱800,000. Otakamiro estimates the cost of
the after-sales support at ₱120,000 and it normally marks up such costs by
50% when tendering for support contracts. Under PFRS 15, the revenue
Otakamiro should recognize in its financial year ended 31 December 20X7 is
a. 620,000 b. 800,000 c. 710,000 d. Nil
(Adapted)
________3. On October 1, 20x3, Acme Fuel Co. sold 100,000 gallons of heating
oil to Karn Co. at ₱3 per gallon. Fifty thousand gallons were delivered on
December 15, 20x3, and the remaining 50,000 gallons were delivered on January
15, 20x4. Payment terms were: 50% due on October 1, 20x3, 25% due on first
delivery, and the remaining 25% due on second delivery. What amount of
revenue should Acme recognize from this sale during 20x3?
a. 75,000 b. 150,000 c. 225,000 d. 300,000
(AICPA)
________4. In 20x2, Super Comics Corp. sold a comic strip to Fantasy, Inc. and
will receive royalties of 20% of future revenues associated with the comic
strip. At December 31, 20x3, Super reported royalties receivable of ₱75,000
from Fantasy. During 20x4, Super received royalty payments of ₱200,000.
Fantasy reported revenues of ₱1,500,000 in 20x4 from the comic strip. In its
20x4 income statement, what amount should Super report as royalty revenue?
a. 125,000 b. 175,000 c. 200,000 d. 300,000
(AICPA)
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ACC 109: INTERDMEDIATE ACCOUNTING, PART 4 2ND GRADING PERIOD
REVENUE RECOGNITION AND NCA HELD FOR SALE QUIZ
be canceled. In Lin’s net sales for the year ended December 31, 20x3, how
much should be included for the sale of this machine to Zee?
a. 0 b. 14,700 c. 14,850 d. 15,000
(AICPA)
________8. Wren Corp.’s trademark was licensed to Mont Co. for royalties of
15% of sales of the trademarked items. Royalties are payable semiannually on
March 15 for sales in July through December of the prior year, and on
September 15 for sales in January through June of the same year. Wren received
the following royalties from Mont:
March 15 September 15
20x2 10,000 15,000
20x3 12,000 17,000
Mont estimated that sales of the trademarked items would total ₱60,000 for July
through December 20x3. In Wren’s 20x3 income statement, the royalty revenue
should be
a. 26,000 b. 29,000 c. 38,000 d. 41,000
(AICPA)
________9. Rill Co. owns a 20% royalty interest in an oil well. Rill receives
royalty payments on January 31 for the oil sold between the previous June 1
and November 30, and on July 31 for oil sold between December 1 and May 31.
Production reports show the following oil sales:
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ACC 109: INTERDMEDIATE ACCOUNTING, PART 4 2ND GRADING PERIOD
REVENUE RECOGNITION AND NCA HELD FOR SALE QUIZ
________11. VISAGE Co. will continue to use the building until the construction
of a new headquarters is completed. How should VISAGE Co. classify the
headquarters building?
a. Included under property, plant and equipment at ₱5,000,000.
b. Included under property, plant and equipment at ₱5,800,000.
c. Classified as held for sale at ₱5,000,000
d. Classified as held for sale at ₱5,800,000
________13. In Baer Food Co.’s 20x3 single-step income statement, the section
titled “Revenues” consisted of the following:
In the revenues section of the 20x3 income statement, Baer Food should have
reported total revenues of
a. 197,200 b. 215,400 c. 203,700 d. 201,900
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ACC 109: INTERDMEDIATE ACCOUNTING, PART 4 2ND GRADING PERIOD
REVENUE RECOGNITION AND NCA HELD FOR SALE QUIZ
1. A Revenue = 108,000 cash selling price; Interest income = (120,000 – 108,000) = 12,000
2. C
Satisfac-tion
of perfor-
Performance Allocation of transaction mance
obligations Allocation method price obligation Revenue
Expected cost plus a
After-sales support margin (120,000 x 150%) = 180,000 50%a 90,000
5. A No revenue is recognized because the control over the machine is not transferred.
8. A
Royalty revenue for Jan. to June, 20x3
17,000
(received on Sept. 20x3)
Royalty revenue for July to Dec., 20x3 (60,000 x 15%) 9,000
Total royalty revenue 26,000
9. C
Solution:
December 1, 20x2 - May 31, 20x3 400,000
December 1, 20x2 - December 31, 20x2 (50,000)
June 1, 20x3 - November 30, 20x3 325,000
December 1, 20x3 - December 31, 20x3 70,000
Oil sales in 20x3 745,000
Multiply by: 20%
Royalty revenue in 20x3 149,000
10. C 5,000,000 lower of carrying amount and fair value less costs sell
11. A – not available for immediate sale in its present condition
12. A – Sale is not highly probable
13. A
Solution:
Net sales revenue 187,000
Interest revenue 10,200
Adjusted total revenues 197,200
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