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a ae CPA REVIEW SCHOOL OF THE PHILIPPINES FINANCI, Manila ‘AL ACCOUNTING AND REPORTING PREWEEK LECTURE SELF TEST Numbers 1, 2,3, and 4 1. An entity provi. Provided the rit a ‘ except for incomes ne trial balance on December 31, 2017 which had been adjusted Ce aes i sonnnas co ‘Accounts receivable, net 3,500,000 C& BP AC # 4 1,500,000 “inetd net income CHOPS ee Sane fr sale soutien pao = Warrants outstanding i Ie 250, ‘umulative eff ; 4 000 felulative effect of change in accounting policy - ere 500,000 Equity in associate's earnin, 100,000 , gs C Prior period eror ~ underdepreciation pice 4) ss r = a aan ca amount of other comprehensive income? (easarnet Mf Keclass * aed» | \ b. 1:200,000° Bes, iy D ©. 1'800,000 telat € 12) ov Z a d. 950,000 Veruca souee CH i v a. 3,600,000 bb. 1,670,000 Aw | D « ret 7 yy 4 0 ants et en hha : "13900007 foe ) fe} t 2,400,008 ee 950.009 i a, COR {109 : 6344 Numbers 9 and 10 Page 3 On Jamuary 1, 2017, an entity acqui interest in an investee 1 |, 2017, quired 430% interest in an a of the investee on the date of acquisition was 6,000,000, cons im at Pad Daal pomighony Pied a. All the identifiable assets ae of the investee were value except for an equipment with.a fai ir amount. The useful life ofthe equguaytsSyeun, 0 ee fen as Svea, = =p On December 31, 2017, the investor had inventory costing P2,000,000 on hand which had been purchased from the investee. A profit of P600,000 had been made on the sale. During the current year, the investee reported net income of P4,000,000 and paid dividend of P1,500,000. ‘The equity of the investee on December 31, 2017 showed share capital P4,000.000, retained earnings uunappropriated 3,500,000, ings appropriated PJ,000,000 and revaluation surplus Ee oor ee OS cus woe ~“The-revalvation surplus arose ftom a revaluation of land made on December 31, 2017. The retained earings appropriated arose from a transfer of unappropriated retained earings to appropriated for contingencies. at = GY 324 | rat nnd seo Behe Te aw hy) > What is the investment income for 20177 bot” me a. 1,200,000 (3 73 poe . lea Seat Cot . 1,020,000 ercetlcccl tI ae beens. ey Om | Coe “s4a000 Lai aes ars 9 4. 750,000 yet levo\ = 10, What is the canying amount of the investment in associae on December 31,2017? LA. 3,200,000 tet FP + b. 3,690,000 » Ce $190,000 ¥ ‘ a a. 3,590,000» ws 2 (Boh An entity sold loons with 2.20000 {HY Value and carrying-amount of P2,000,000, The entity obtained an-option’io purchase similar loans and assumed obligation to repurchase loans. Numbers 11,12 and 13 “Tie fair values are quoted, fm oe Cash proceeds 290 te wo Interest rate swap sim a Call option ‘mom Recourse obligation : ; a2) AJ. What is the gain or (oss'on the sale? © = [oy 320,000 gain a OO. ah a? ib, 200,000 gai taht ce, 190,000 los wots 4,120,000 gain am ( Fz What rncluded in the journal entry to record the transfer? + 7 a, A debit to call option — one, — p, Accredit to interest rate swap PAE cate ee ee Be Re Katiiotowe operate eS at SNF | setyice the loans it explicitly stating ds helio, The = x hat the entity agree pic 5 Fa ee te = jee is P50,000. What pfoceeds apd the gain on the sale, respectively? ues lee act Urge) fa 2,220,000 and 200.000 2 00 and 250,000 > ‘TF reeds Coe 21150,000.and 150.000 cr 2 & 27200,000 and_ 150,000 ey 6344