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Sevilla - Unit3 - PFRS For SMEs
Sevilla - Unit3 - PFRS For SMEs
Sevilla - Unit3 - PFRS For SMEs
PRETEST
1. D 6. C
2. C 7. A
3. B 8. B
4. C 9. C
5. A 10. D
ASSESSMENT
ACTIVITY 1
1. D 11. D 21. D 31. B 41. C
2. C 12. D 22. A 32. D 42. C
3. C 13 A 23. B 33. D 43. C
4. B 14. C 24. D 34. E 44. F
5. C 15. D 25. A 35. E 45. C
6. D 16. A 26. D 36. B 46. D
7. B 17. C 27. B 37. D 47. A
8. B 18. A 28. B 38. D 48. A
9. C 19. D 29. A 39. A 49. D
10. A 20. C 30. C 40. D 50. A
ACTIVITY 2
1. B
Revenues 5,000
Dividend income (800)
Operating and other expenses (3,200)
Profit of the year 2,600
Retained earnings, Jan.1 2,400
Adjustments to operating balance:
Cumulative effect of change in accounting policy
(2600 FIFO-3,200 Average) (600)
Retrospective effect on correction of error (1,200)
Adjusted retained earnings, Jan. 1 600
Dividend declared (350)
Retained earnings, Dec. 31 2,850
2. A
Acquisition cost 1,000
Transaction cost 70
Initial measurement 1 ,070
3. A
4. B
5. A
Issue price 900
Less:Transaction cost (50)
Initial measurement 850
6. B
7. D
8. A
9. C
Proceeds 850,000
Less: Carrying amount (1,000,000)
Loss (150,000)
10. C
11. C
12. C
13. C
14. C
15. A
16. C
17. A
18. A
19. A
20. B
19-20. Major defects (5,000 x 8% P100) 40,000
Minor defects (5,000 x 12%x P20) 12,000
Warranty expense 52,000
Actual repair cost (10,000)
Year-end provision 42,000
21. B
22. D
21-22: Revenue 280,992
Cost of sale (280,992 x 100%/130%) (216,146)
Gross profit 64,844
Interest income (280,992 x 10%) 28,099
Operating expenses (50,000)
Profit 42,944
23. D
24. D
Pretax income 18,000
Permanent differences –
Accounting profit subject to tax 18,000
Warranty provision (FI < TI) 3,000
Interest receivable (FI > TI) (1,000)
Depreciation (FI > TI) (30,000)
Taxable profit (Tax loss) (10,000)
25. D
Warranty provision (FI < TI) 3,000
Tax loss 10,000
Valuation allowance on tax loss (10,000 x 60%) (6,000)
Total deductible temporary difference 7,000
Multiply by: Tax rate applicable to 20x2 and future periods 30%
Deferred tax asset - Dec. 31, 20x1 2,100
26. A
Interest receivable (FI > TI) 1,000
Depreciation (FI > TI) 30,000
Total taxable temporary difference 31,000
Multiply by: Tax rate applicable to 20x2 and future periods 30%
Deferred tax liability - Dec. 31, 20x1 9,300
27. A
Accounting profit subject to tax 18,000 x 35% current tax rate = 6,300
28. B
Pretax income 280,000
Interest income subject to final tax (30,000)
Nondeductible entertainment expense 25,000
Accounting profit subject to tax 275,000
Bad debt expense (FI < TI) 2,000
Depreciation (FI > TI) (100K - 75K) (25,000)
Taxable profit 252,000Taxable profit 252,000
Multiply by: Tax rate 30%
Current tax expense 75,600
29. D
Change in DTA (2,000 x 30%) ... (600)
Change in DTL (25,000 x 30%) 7,500
Deferred tax expense 6,900
30. A
Accounting profit subject to tax 275,000
Multiply by: Tax rate 30%
Income tax expense 82,500