Professional Documents
Culture Documents
EA1 Ia2
EA1 Ia2
1 point
True - sabi ni pao claims receivable syd rv charles alia kath 37 SURE
False - sabi ng kaklase ni ate chesca mai nana
Note: Kapag virtually certain na yung contingent asset (90-95%) mare recognize na siya sa balance
sheet as asset pero not sure kung what particular asset.
2. A constructive obligation may be derived when the entity has created a valid expectation in other
parties that it will discharge its responsibilities. 1 point
True syd mai rv charles BRENT
False ALIAAAA
3. Cost of retraining staff continuing to be employed by the company must be included in the
restructuring provision. 1 point
True
False (PAS37, pg. 106, pg. 177 (Millan) syd rv mai charles alia BRENT
Pg. 177 (Millan): A restructuring provision does not include costs of retraining or relocating continuing
staff and other costs that relate to the new business.
4. A provision shall be recognized for future refurbishment costs due to the introduction of a new computer
system. 1 point
True
False (Quizlet) mai rv charles alia nana BRENT SURE
5. On December 31, 20x1, ABC Co. has accounts payable of P 1,000,000 before possible adjustments for
the following: 2 points
1. Goods in transit from a vendor to ABC on 12.31.20x1 with an invoice cost of P 50,000
purchased FOB SP was not yet recorded.
2. Goods shipped FOB Shipping from a vendor to ABC was lost in transit. The invoice cost of P
20,000 was not yet recorded.
A. goods with invoice cost of 15,000 was recorded and included in the year-end physical cout as
“goods in transit”. It was dound out that the goods were shipped from a vendor under FOB
Destination.
b. checks drawn but not yert released to payees amounted to 12,000 while checks drawn and
released to payees but were postdated amounted to 5,000
What is the correct amount of accounts payable at 12.31.20x1
6. 1002000 - cess syd alia BRENT2.0 KATH 37 sure
7. In packages of the products. Keri Co. included coupons that may be presented at retail stores to obtain
discounts. Retailers are reimbursed for the face amount of coupons redeemed plus 12% of that amount
for handling costs. The entity granted requests for coupons redemption by retailers up to 3 months after
the consumer expiration date. The entity estimated that 80% of all coupons issued will ultimately be
redeemed. 1 point
1. Consumer expiration date: 12.31.2020
2. Total face amount of coupons issued - 800,000
3. Total payments to retailers as of 12.31.2020 - 420,000
What amount should be reported as liability for unredeemed coupons on December 31, 2020?
Same question, different given: 800,000 face amount, 15% hf, 75% expected, 414,000 payment
1. Bonus is calculated based on net income after bonus and before income tax.
Bonus - 250,000 syd mai alia
Income Tax - 750,000 syd mai alia
2. Bonus is calculated based on net income after bonus and income tax.
Bonus - 179,907 - syd mai alia
Income Tax - 771,028 - syd mai alia
3. Bonus is calculated based on net income before bonus and income tax.
Bonus - 550,000 charles nana
Income Tax - 1,485,000 charles nana
4. Bonus is calculated based on net income after tax but before bonus.
Bonus - 396,907 charles nana
Income Tax - 1,530,928 charles nana
9. James Co. operates a customer loyalty program. The entity grants program members loyalty points
when they spend a specified amount on purchases. Program members can redeem the points for
further purchases. The points have no expiry date. During 2020, the customer earned 50,000 points.
Management expected that the 100% of these points will be redeemed. The stand alone selling price of
each loyalty points is estimated at P 20. The sales during 2020 amounted to P 4,000,000 based on the
stand alone selling price. On December 31, 2020, 16,000 points have been redeemed in exchange for
purchases. 2 points
1. In 2021, the company revised its expectations to only 80% of the loyalty points will be
redeemed. In 2021, 6,000 points were used by the customers. What is the remaining unearned
revenue from loyalty points as of the end of 2021?
360,000 Possible answer syd mai alia nana BRENT SURE
CHEGG LINK:
https://www.chegg.com/homework-help/questions-and-answers/james-company-operates-customer-
loyalty-program-entity-grants-program-members-loyalty-poin-q68328506
Same question, different given: 30,000 points, 3,400,000 sales, 14,400 2020 actual, 4,500
2. In 2021, the company revised its expectations to only 80% of the loyalty points will be redeemed. In
2021, 4,500 points were used by the customers. What is the remaining unearned revenue from loyalty
points as of the end of 2021?
108, 375 rv charles kath 37 alia 2.0
10. Contingent liabilities will or will not become actual liabilities depending on the present condition. 1 point
True
False syd mai rv charles alia nana BRENT SURE
11. During the current year, Premiere Company sold 40,000 pairs of shoes under a new sales promotional
campaign. Each pair of shoe carried one coupon which entitles the customer to a P 100 cash rebate.
The entity estimated that 70% of the coupons will be redeemed even though only 17,500 coupons
had been returned and recognized by the company during the current year. At year end: 2 points
1. What amount should be reported as Estimated rebate liability in the Statement of Financial
Position?
1,050,000 mai charles nana BRENT SURE
2. How much is the amount of Rebate Expense that would still be accrued at the end of the year?
1,050,000 charles nana BRENT SURE
2,800,000 mai
Same question, different given: 160,000 pairs of shoes, one coupon per pair of shoes, 100 cash rebate,
70% expected, and 70,000 actual.
a. What amount should be reported as Estimated rebate liability in the Statement of Financial
Position?
b. How much is the amount of Rebate Expense that would still be accrued at the end of the year?
12. Disclosure is not required for contingent loss and contingent gain that is remote and measurable. 1
point
True (R)millan syd rv mai charles alia nana BRENT auds SURE
False
13. A contingent liability is a form of provision in the context of IAS37. (di sure) 1 point
True - sabi nung kaklase ni ate chesca syd charles
False - sabi ni pao mai nana BRENT auds
14. A contingent liability ceases to be one when the amount of the loss can be reliably measured and it is
probable prior to issuance of financial statements that a liability has been incurred.(di sure) 1 point
True syd rv charles alia nana
False
15. All existing lawsuits must be treated as contingent liabilities. 1 point
True
False - Syd mai rv charles alia nana BRENT SURE
16. Ditto Company sells equipment services contracts that cover a two-year period. The sale price of each
contract is P 800. The past experience is that, of the total pesos spent for repairs on service contracts,
40% is incurred evenly during the first contract year and 60% evenly during the second contract year.
The entity sold 1,200 contracts evenly throughout 2020. 4 points
1. What is the contract revenue for 2020?
192,000 mai alia nana BRENT
ALIA
2. What amount should be reported as deferred service contract revenue for 2020?
768,000 mai alia nana BRENT
ALIA
Same question, different given: sale price 1200, 40% first contract - 60% second contract year, sold
1000.
b. What amount should be reported as deferred service contract revenue for 2020?
17. Mobile Co. manufactures and sells inexpensive computer tables with a 3-month warranty under which
defective products will be replaced without charge. On January 1, 2020, the warranty liability had a
balance of P 800,000. The entity expects that around 0.5% of their products may be returned on the
month of sale, 2% on the month after sale, and 3% on the 2nd month after sale. The sales for the year
totaled P 48,000,000. They sold the same amount per month. How much is the estimated warranty
liability that they should accrue at the end of the year?
320,000 syd mai rv charles alia nana BRENT kath 37 SURE
18. Provisions are liabilities whose timing and amount are both uncertain. 1 point
True - rv alia nana
False ALIAA
19. On January 1, 20x2, ABC Co. took a 3-yr, P 1,000,000 loan from a bank. The loan agreement requires
ABC to maintain a current ratio 2:1. If the current ration fallse below 2:1, the loan becomes payable on
demand. As of December 31, 20x1 (period-end), the current ratio of the ABC Co. is 1:8:1. On January
5, 20x2, the bank agreed not to collect the loan in 20x2 so they can rectify the breach in the loan
agreement. Will the P 1,000,000 loan be presented as current or non-current liability? (di sure) non-
current - Sean 2 points,
- current liability Sure ®, no need liability word na raw sabi ni ms. syd rv mai charles alia
nana BRENT kath 37 SURE
20. Provisions and contingent liabilities are both presented as current liabilities in the statement of financial
position. (di sure) 1 point
True - sabi ng kaklase ni ate chesca syd
False - sabi ni pao rv mai charles alia BRENT auds SURE
21. When a reimbursement is expected from a third party in a lawsuit settlement, the provision to be
recognized is the net amount of the settlement and the amount reimbursable from the 3rd party. (di
sure) 1 point
True p. 177 at 178 © syd
False - sabi ni pao rv nana BRENT kath 37 auds SURE
(yung expense na related sa provision pwede i-net pero yung estimated liability sa provision is hindi
netted and treated separately.
22. ABC Company sells one-year subscriptions for an industry publication published monthly and shipped
to subscription received after November 1 cut-off date are held for publication in the following year.
Receipts during 20.x1 for subscription were made evenly. Information on subscription is shown below:
2 points
1. Unearned revenue - January 1, 20x1 - 1,500,000
2. Receipts from subscriptions during 20x1 - 12,000,000
3. How much is the unearned revenue balance on 12.31.20x1?
- 2,000,000 (R) base sa computation sa millan syd mai rv charles alia BRENT
Same question, different given: 3,000,000 unearned revenue, 24,000,000 receipts from subscription -
https://www.coursehero.com/file/p6hdko1m/How-much-is-the-service-revenue-recognized-in-2018-a-
200000-c-500000-b-800000-d/
23. ABC Company, has a 10%, P 1,000,000 loan payable as of December 31, 20x1 that is maturing on July
1, 20x2. Interest on the loan is due annually every July 1. On the February 1, 20x2, ABC Company
entered into a refinancing agreement with a bank to refinance the loan on a long term bases. Both
parties are financially capable of honoring the agreement’s provisions. ABC’s financial statements were
authorized for issue on March 15, 20x2. Based on the given information, how much should be
presented as current liability? 2 points
During the current year, the entity sold 150,000 sachets at P 50 each. Purchased porcelain dished to
be given as premiums for a total cost of P 270,000 and incurred a non-deferrable cost of P 15,000
applicable to the premium plan. a total of 3,500 porcelain dish have been redeemed and a total of 8
grand prizes have been awarded. 3 points
1. How many porcelain dish did the company buy based on the given information? 4500 syd rv
charles BRENT kath 37
2. What is the total premium expense charged for the current year?
3. What is the estimated premium liability at the end of the current year?
Same question, different given: 10 return, 20 remittance, 24 grandprize worth 10,000, expected 30%,
sold 300,000 units, sales price 50 per unit, total premium cost 1,080,000, 25,000 non-deferrable cost,
actual redeemed 7,000 and 16 grand prize.
4. How many porcelain dish did the company buy based on the given information?
5. What is the total premium expense charged for the current year?
6. What is the estimated premium liability at the end of the current year?
1. The difference between contingent liabilities and provisions is the fact that contingent liabilities are always
unmeasurable 1 point
True
False syd mai charles alia nana BRENT kath 37 SURE alia 2.0
5. Future operating losses of the division being closed up to the date of closure must be included in the
restructuring provision
False - discontinued operation pg. 176 (Millan) syd mai charles alia nana BRENT kath 37 SURE
Pg. 176 (Millan): Future operating losses - Provisions are not recognized for future operating losses,
even in a restructuring.
10. A constructive obligation may be derived when the entity takes action that they will accept certain
responsibilities because of practice or published policy.
True - one entity’s action besides discharge responsibility (c) quizlet syd mai rv charles alia
nana BRENT kath 37 SURE alia 2.0
False
21. A provision shall be recognized for rectification costs relating to products already sold.
True - May present obligation arising out of past events. Quizlet rv mai charles nana BRENT
kath 37 SURE
False
https://www.scribd.com/document/306720573/ToA-Quizzer-10-Provisions-Contingencies
25. A provision must be set up for all existing lawsuits filed against the company.
True
False syd mai rv charles nana BRENT kath 37 auds SURE