W company provided you the following assets:

Land related agricultural activities 3,000,000

Plants with singular purpose 600,000
Animas related to recreational activities (i.e. zoo 400,000
animals)
Cattle 200,000
Cheese 20,000
Other bearer animals 500,000
Plants with dual purpose 250,000
Picked grapes 80,000
Eggs 30,000
1. How much should be classified as biological assets?
a. 950,000
b. 1,300,000
c. 700,000
d. 1,350,000
G company purchased 20,000 ordinary shares of U corporation for P700,000 which
includes P5,000 transaction cost, on January 1 2017. December 31 2017, the shares
were selling at P32, which increased to P36 on December 31 2018.
On June 30 2019, U corporation distributed 20% bonus issue. On July 15 2019, G
company sold 15,000 shares at P35 per share. On December 31 2019, U corporation
shares were selling at P34 per share.
If G company classified the investment as held for trading, determine the following:
2. The amount of unrealized gains and losses that should be included in the profit or
loss statement for the year ended December 31 2017.
a. 60,000
b. 55,000
c. 80,000
d. 20,000
3. The amount of gain or loss on sale on July 15 2019.
a. 3,750
b. 15,000
c. 75,000
d. 90,625
If G company classified the investment as fair value through other comprehensive
income, determine the following:
4. The amount of unrealized gain/loss that should be reported in the statement of
financial position on December 31 2018.
a. 80,000
b. 25,000
c. 20,000
d. 60,000
5. The cumulative balance of unrealized gain/loss that would bee transferred to
retained earnings in relation to the sales of 15,000 shares.
a. 87,500
b. 12,500
c. 75,000
d. None of the choices
On January 1 2018, S company acquired 20% interest equivalent to 20,000 shares of
B company for P3,000,000 when B’s net assets had carrying values of P12,000,000.
All other identifiable assets and liabilities show carrying values equal to their fair
values except for land whose fair value is P500,000 higher than its book value, an
equipment (with 4 years remaining life from the date of acquisition) whose fair value
exceeds its carrying values by P800,000, and inventories with a book value of
P4,500,000 and fair value of P4,700,000.
On December 31 2018, 60% of the inventories remined unsold and B reported a
foreign translation gain of P200,000 and net income of P5,000,000. S received from B
a total dividends of P600,000.
6. How much from the acquisition cost is attributable to goodwill?
a. 0
b. 900,000
c. 300,000
d. 600,000
7. How much is the total amount of income taken to profit or loss for the year ended
2018?
a. 1,000,000
b. 1,040,000
c. 944,000
d. 1,016,000
8. How much is the carrying value of the investment on December 31 2018?
a. 3,376,000
b. 3,344,000
c. 3,334,000
d. 3,384,000
On January 1 2018, Y corporation acquired a 5-year 10% P1,000,000 face value
bonds at 92. The company paid broker’s fees amounting to P118,000. As a result of
transaction cost, the yield rate on the bond was 9%. Interest are collectible annually
every December 31. The bonds were selling at 120 and 115 as of December 31 2018,
December 31 2019 respectively.
9. How much is the carrying value of investment on December 31 2019 assuming the
company classified the investment as financial assets at amortized cost?
a. 1,200,000
b. 1,031,420
c. 1,150,000
d. 1,024,248
10. How much is the unrealized gain/loss that should be reported in OCI for the year
2019 assuming the company classified the investment as financial asset at fair
value through other comprehensive income?
a. 125,752
b. 42,828
c. 168,580
d. None of the choices
A company has the following property items at December 31 2018:
Land which at the date of acquisition is not intended for any specific 1,000,000
use in the future
Land held for future plant site 2,000,000
Building being leased out under operating lease 8,000,000
Building being leased out under finance lease 2,500,000
Equipment being leased under finance lease 1,500,000
Land and building acquired under finance lease being used by the 9,200,000
entity as its general and administrative headquarter
Condominium building that is being constructed intended for sale in 5,000,000
the ordinary course of business
Building being leased out under operating lease; an insignificant 6,000,000
portion is used for administrative purposes
Hotel building owned which significant services are provided to the 7,000,000
guests
11. How much should be classified as investment properties on December 31 2018?
a. 16,500,000
b. 15,000,000
c. 9,000,000
d. 22,000,000

On January 1 2017, T company purchased several machineries that will be used in

the production of goods at purchase price of P1,000,000. T company paid import
duties of P10,000 and nonrefundable purchase taxes of P5,000. T company also
incurred a P30,000 installation and assembly cost. The company expects that it will
incur dismantling cost amounting to P132,275 at the end of the equipment’s 5-year
useful life. The prevailing market interest rate during the transaction date was 12%.
The present value factor of 1 at 12% for 5 periods is at 0.567
The present value factor of ordinary annuity at 12% for 5 periods is at 3.6048
12. How much should the machineries be initially recognized?
a. 1,045,000
b. 1,177,275
c. 1,120,000
d. 1,521,825

On January 2 2017, Q company has a building that is being leased out under
operating lease costing P2,000,000. The lessee pays a semi-annual rent of P90,000.
Estimated useful life of the building is 10years. On December 31 2017 the fair value of
the property is P2,400,000.
13. How much is the total net amount of income that should be taken to 2017 profit or
loss using the fair value model?
a. 58,000
b. 161,104
c. 157,313
d. 280,000

January 1, 2015, an entity disclosed the following balances:

Land 4,000,000
Land improvements 1,300,000
Buildings 20,000,000
Machinery and equipment 8,000,000
During the current year, the following transactions occurred:
* A tract of land was acquired for P2,000,000 cash as a building site.
* A plant facility consisting of land and building was acquired in exchange for
200,000 shares of the entity. On the acquisition date, each share had a quoted price of
P45 on a stock exchange. The plant facility was carried on the seller’s books at
P1,600,000 for land and P5,400,000 for the building at the exchange date. Current
appraised values for the land and the building, respectively, are P2,000,000 and
P8,000,000. The building has an expected life of forty years with a P200,000 residual
value.
* Items of machinery and equipment were purchased at a total cost of P4,000,000.
Additional costs incurred were freight and unloading P100,000 and installation
P300,000. The equipment has a useful life of ten years with no residual value.
* Expenditures totaling P1,200,000 were made for new parking lot, street and
sidewalks at the entity’s various plant locations. These expenditures had an estimated
useful life of fifteen years.
* Research and development costs were P1,100,000 for the year.
* A machine costing P200,000 on January 1, 2008 was scrapped on June 30, 2015.
Straight  line depreciation had been recorded on the basis of a 10-year life with no
residual value. A machine was sold for P500,000 on July 1, 2015. Original cost of the
machine sold was P700,000 on January 1, 2012, and it was depreciated on the
straight line basis over an estimated useful life of eight years and a residual value of
P50,000.
14. What is the total cost of land on December 31, 2015?
a. 7,800,000
b. 7,600,000
c. 8,000,000
d. 6,800,000
15. What is the total cost of land improvements on December 31, 2015?
a. 1,200,000
b. 3,600,000
c. 1,300,000
d. 2,500,000
16. What is the total cost of buildings on December 31, 2015?
a. 28,000,000
b. 25,400,000
c. 27,200,000
d. 27,000,000
17. What is total cost of machinery and equipment on December 31, 2015?
a. 12,400,000
b. 11,500,000
c. 11,000,000
d. 11,700,000
In January 2017, N mining company purchased a mineral mine for P3,600,000 with
removal ore estimates by geographical surveys at 2,160,000 tons. The property has an
estimated value of P360,000 after the ore has been extracted. N company incurred
P1,080,000 of development costs preparing the property for extraction of ore. During
2017, 270,000 tons were extracted and 240,000 were sold.
18. For the year ended December 31 2017, N mining should include what amount of
depletion?
a. 360,000
b. 480,000
c. 520,000
d. 540,000