1 Cash balance after reversing check

AR - net
Inventory
Prepaid expenses
Land held for resale
Total current assets

Adjusted accounts payable (700,000 + 600,000)

TSHE

2 Cash
AR (1150,000 + 250,000)
Total current assets

RE 1/1
NI (3.6M - 2.6M) x 70%
RE 12/31

Share capital
Share premium
RE (as above)
Translation adjustment - debit
Total Shareholders' Equity

3 Unrealized gain on equity investment at FVOCI

Unrealized loss on furtures contract designated as a cash flow hedge
Remeasurement loss on increase in PBO due to changes in Act. Assump.
Foreign translation adjustment gain
Revaluation surplus
Net other comprehensive income

OcI recycled to RE when realized

Net sales
Cost of goods sold
Selling expenses
Administrative expenses
Interest expense
Gain on expropriation
Income before taxes
Income tax expense
Income from continuing operations
Income from discontinued operations
Net Income
Net OCI
Comprehensive income

4 Cash in bank (8M - 3M + 2.5M)

Coins and currencies on hand
 Money market instrument
Bond sinking fund (bonds currently due)
Traveler's check
Manager's check
Total cash and cash equivalents

5 30 days or less
31 to 60 days
61 to 180 days
181 days to 1 year
Required allowance

Total doubtful accounts expense (2016 to 2018)

Total write off
Total recovery
Allowance for doubtful accounts 12/31/2018

1/1 Allowance
Total writeoff (200,000 + 100,000)
Recovery
Provision or DA exp. (SQUEEZED)
Required allowance

AR balance after writeoff

Less: Allowance
NRV

6 Carrying amount of loan receivable (1,500,000 + 40,000 - (4% x 1,500,000)

Carrying amount of loan payable

7 Carrying amount of 9 month note

Face value
Interest on maturity (2M x 3% x 5 years)
Total cash flow
PV factor
Carrying amount of 5 year note

8 Carrying amount 1/1/19 (1M x 6.71)

2019 Interest income (6,710,000 x 8%)
12/31/2019 installment received
Carrying amount 12/31/2019

9 1/1/22 PV of CF (to be received 1 day after 12/31/2021)

1/1/23 PV of CF
1/1/24 PV of CF
Total PV of future cashflows
Less: Carrying amount of note
Impairment loss
Carrying amount
Less: 1/1/22 installment
Net carrying amount
2022 Interest income and amortization (1,790,000 x 8%)
Carrying amount 12/31/2022
 400,000
700,000
1,200,000
200,000
2,000,000
4,500,000 A

1,300,000 A

5,100,000 A

550,000
1,400,000
1,950,000 A

700,000
700,000
1,400,000

500,000
600,000
1,400,000
(500,000)
2,000,000 B

900,000
(400,000)
(300,000)
100,000
2,500,000
2,800,000 D

3,100,000 D

9,500,000
(4,000,000)
(1,000,000)
(1,200,000)
(700,000)
500,000
3,100,000
(800,000)
2,300,000
600,000
2,900,000
2,800,000
5,700,000 C

7,500,000
800,000
 1,500,000
1,000,000
200,000
100,000
11,100,000 B

150,000
300,000
300,000
600,000
1,350,000 A

1,175,000
(200,000)
75,000
1,050,000

1,050,000
(300,000)
100,000
500,000 A
1,350,000

6,900,000
1,350,000
5,550,000 C

1,480,000 B

1,440,000 B

2,000,000 A

2,000,000
300,000
2,300,000
0.680
1,564,000 D

6,710,000
536,800 C
(1,000,000)
6,246,800 A

1,000,000
930,000
860,000
2,790,000
3,000,000
(210,000) B
2,790,000
1,000,000
1,790,000
143,200
1,933,200 B
1 Unadjusted inventory 1,500,000
In transit goods purchased FOB shipping point 100,000
Undelivered goods in the shipping area 300,000
Adjusted 1,900,000

2 Unadjusted accounts payable 4,500,000

Undelivered check 2,000,000
Unrecorded purchase at net (750k x 98%) 735,000
Adjusted balance of accounts payable 7,235,000

3 RM purchased 4,000,000
Less: Increase in RM inventory 300,000
RM used 3,700,000
Direct labor 5,000,000
Factory overhead (60% x 5M) 3,000,000
Total manufacturing cost 11,700,000
WIP beginning 4,300,000
Total good placed in process 16,000,000
Less: WIP END (SQUEEZED) 3,500,000
Cost of goods manufactured (18.5M - 6M) 12,500,000
Finished goods beginning 6,000,000
Cost of goods manufactured (14M + 4.5M) 18,500,000
Less: Finished goods end 4,500,000
Cost of goods sold (20M x 70%) 14,000,000

4 Cash dividend from Queen 15,000

Preferred div from Princess (30% x 8M) 2,400,000
Total dividend income 2,415,000

5 2019 2020
Unrealized net income 3,000,000 4,000,000
Unrealized gain on sale (300,000)
Realized gain on sale 100,000 100,000
Unrealized profit (500,000)
Realized profit 500,000
Realized net income 2,300,000 4,600,000
Equity percentage 40% 40%
Investment income 920,000 1,840,000
C B

Cost 6,000,000
Total investment income 920,000
Total dividends received (400,000)
CA 12/31/19 6,520,000
Total investment income 1,840,000
Total dividends received (600,000)
CA 12/31/20 7,760,000

6 Land Land Improvements

Beginning balances 4,000,000 1,300,000
 Cash acquisition of land 2,000,000
Allocated cost of land for shares 1,800,000
Allocated cost of building for shares
Machinery acquired with direct cost
Parking lot, etc. 1,200,000
Machine disposed
Machine disposed
Ending balances 7,800,000 2,500,000
A D

7 Revalued amount 27,000,000

Less: Carrying amount (30M - 12M) 18,000,000
Revaluation surplus 12/31/19 9,000,000
Deferred tax laibility (2,700,000)
Balance 6,300,000
Less: 2020 Realization (6.3M / 6 years) 1,050,000
12/31/20 Balance 5,250,000

CA after revaluation 27,000,000

Less: Depreciation (27M / 6) 4,500,000
CA 12/31/20 22,500,000

DTL 12/31/19 2,700,000

Less: Amortization (2.7M / 6 years) 450,000
DTL 12/31/20 2,250,000

8 Software cost (2.4M + 2M + 1.5M) 5,900,000

Inventory cost (2.5M + 900) 3,400,000

R and D expense (1.3M + 1M) 2,300,000

D

Building Machinery
20,000,000 8,000,000
 5,400,000
4,400,000

(200,000)
(700,000)
25,400,000 11,500,000
B B

B
1 Taxable temporary difference 1,500,000
Tax rate 30%
Deferred tax liability 450,000 A

Deuctible temporary difference 4,500,000

Tax rate 30%
Deferred tax asset 1,350,000 A

2 PV factor of an ordinary annuity for 8 periods 5.33

Less: PV factor of an ordinary annuity for 3 periods 2.49
PV factor for periods 4 to 8 2.84

PV of 300k payments 747,000

PV of 400k payments 1,137,000
Lease Liability 1/1/19 1,884,000
Less: Lease payment to lease liability
12/31/19 Rental payment 300,000
Less: Interest (1,884,000 x 10%) 188,400 111,600 1. A
12/31/19 Lease liability 1,772,400 2. A
Less: Lease payment to lease liability
12/31/20 Rental payment 300,000
Less: Interest (1,772,400 x 10%) 177,240 122,760
12/31/20 Lease liability 1,649,640
Less: Lease payment to lease liability
12/31/21 Rental payment 300,000
Less: Interest (1,649,640 x 10%) 164,964 135,036
12/31/21 Lease liability 1,514,604
Less: Lease payment to lease liability
12/31/22 Rental payment 400,000
Less: Interest (1,514,604 x 10%) 151,460 248,540 3. A
12/31/20 Lease liability 1,266,064

3 Total interest expense (50 + 90 + 240) 380,000

Less: interest expense recorded 150,000
Understatement 230,000 B

4 Current service cost 500,000

Past service cost 300,000
Loss on settlement 250,000
Net interest (600 - 350) 250,000
Benefit expense 1,300,000 A

Gain on plan assets (850 - 350) (500,000)

Actuarial loss 200,000
Net remeasurement gain (300,000) C
Benefit expense 1,300,000
Net defined benefit cost (debit) 1,000,000
Contribution to the plan (credit) 1,500,000
Debit adjustment to Prepaid/Accrued Benefit Cost 500,000

PBO beginning (600,000 divided by 10%) 6,000,000

Current service cost 500,000
Past service cost 300,000
Interest expense 600,000
Present value of benefit obligation settled (950,000)
Benefits paid (1,000,000)
Increase in PBO or Actuarial loss on PBO 200,000
PBO end 5,650,000 A

FVPA beginning (350,000 divided by 10%) 3,500,000

Actual return 850,000
Contributions 1,500,000
Benefits paid (1,000,000)
Settlement price (950,000 + 250,000) (1,200,000)
FVPA end 3,650,000 A

Accrued benefit cost 12/31 (5,650,000 - 3,650,000) 2,000,000 A

ALTERNATIVE SOLUTION FOR NUMBER 3

PBO beginning (600,000 divided by 10%) 6,000,000

FVPA beginning (350,000 divided by 10%) 3,500,000
Accrued benefit cost 1/1 or credit balance 2,500,000
Less: Debit adjustment (as above) 500,000
Accrued benefit cost 12/31 2,000,000 A
,
1 1/1 (300,000 x 12/12)
9/1 (60,000 x 4/12)
Average number

Net income
Less: Pref. Div. (30 x 10,000)
Net income to ordinary
Divide by
BEPS

Assumed proceeds from share options (30,000 x 20)

Treas. Shares acquired at average market price (600k / 30)

Incremental ordinary shares from Share Options (30k - 20k)

Bonds payable
Total potential ordinary shares

Net income to ordinary

Interest on BP net of tax (100,000 x 70%)
Adjusted net income
Divide by
DEPS

2 FV of COMPOUND FINANCIAL INSTRUMENT (Share alternative) (25,000 x 48)

Less: FV of Liability Component (Cash alternative) (20,000 x 51)
FV of EQUITY component of SBP

2019
FV of liability component (54 x 20,000) / 3
FV of equity component (180,000 / 3 years)
Total compensation expense

2020
FV of liability component (66 x 20,000) / 3 x 2 = 880,000 - 360,000
FV of equity component
Total compensation expense

2021
FV of liability component (65 x 20,000) - (360,000 + 520,000)
FV of equity component
Total compensation expense

Total compensations payable as consideration for shares

Total equity component
Total amount
Less: PV of shares (25,000 x 30)
 Share premium from issuance if settled in shares

If the SBP is settled in cash, the equity component (SOO acct) is closed to Share premium

3 FV of COMPOUND FINANCIAL INSTRUMENT (Fair value of goods or services received)

Less: FV of Liability Component (Cash alternative) (40,000 x 110)
FV of EQUITY component of SBP

Settlement price (130 x 40,000)

Less: 1/1/19 Liability
Increase in liability as expense

Liability component (accts payable) as consideration

Equity component to be transferred to SP

Less: PV (50,000 x 50)

Share premium

4 12/31/19 Market price

Less: Predetermined price
Share appreciation
Number of SARs
2019 Compensation expense

12/31/20 Market price

Less: Predetermined price
Share appreciation
Number of SARs
12/31/20 Cumulative compensation expense
Less: 2019 Compensations expense
2020 Compensation expense

12/31/2020 Compensations payable (as above)

Less: 2021 payments from exercise (30 - 20) x 20,000
Balance before adjustment
Gain on reversal or decrease in payable (SQUEEZED)
12/31/2021 Compensations payable (30 - 20) x 40,000
 300,000
20,000
320,000

6,700,000
300,000
6,400,000
320,000
20 A

600,000

20,000

10,000
40,000
50,000

6,400,000
70,000
6,470,000
370,000
17.49 C

1,200,000
1,020,000
180,000

360,000
60,000
420,000 C

520,000
60,000
580,000 C

420,000
60,000
480,000 A

1,300,000
180,000
1,480,000
750,000
 730,000

180,000

5,000,000 A
4,400,000
600,000 C

5,200,000
4,400,000
800,000 C

4,400,000
600,000
5,000,000
2,500,000
2,500,000 B

28
20
8
60,000
480,000

35
20
15
60,000
900,000
480,000
420,000 B

900,000
200,000
700,000
-300,000 B
400,000
1 Operating
Issuance of shares
Cash receipts from customers 2,000,000
Dividends received 300,000
Proceeds from repayment of loan given
Payment for wages and other operating expenses (1,200,000)
Payment for insurance (100,000)
Payment for dividends
Payment for taxes (400,000)
Payment to purchase land .
Net cash (used) / provided by 600,000
A

2 Net income 7,000,000

Increase in AR (400,000)
Doubful accounts expense 100,000
Deccrease in prepaid expense 200,000
Increase in AP 500,000
Net cash provided by operating activities 7,400,000

3 Net income 6,000,000

Increase in investment in associate (600,000)
Decrease in premium on BP (100,000)
Increase in deferred tax liability 300,000
Net cash provided by operating activities 5,600,000

4 Taxes and interest paid 545,000

5 Investing
Purchased of real estate with funds from bank loan (5,500,000)
Sale of investments 5,000,000
Purchase of patent (1,250,000)
Dividends
Issuance of shares
Payment of bank loan
Issuance of bonds .
Net cash (used) / provided by (1,750,000)

6 Salaries payable 1/1 40,000

Salaries expense 420,000
Total 460,000
Less: Salaries paid gross 390,000
Salaries payable 12/31 70,000

7 Total collections 2,210,000

Rental receivable beginning (800,000)
Collections of fiscal year's rental revenue 1,410,000
 Rental receivable end 1,060,000
Write off 30,000
Accrual basis rental revenue 2,500,000

8 Monthly insurance expense (72,000 / 3 years / 12 mos) 2,000

Prepaid insurance for 35 mos. 70,000

Insurance expense (3k + 2k) 5,000

9 Insurance premium balance 160,000

Rental deposit 200,000
Total prepaid expense 360,000

10 Prepaid insurance beginning 650,000

Credit adjustment to insurance expense / debit to prepaid insurance 250,000
Insurance premium paid 900,000

11 Unadjusted professional fees expense 1,500,000

Unbilled professional services in November 50,000
Unbilled professional services in December 100,000
Adjusted professional fees expense 1,650,000
 Investing Financing
4,000,000

2,200,000

(200,000)

(800,000)
1,400,000 3,800,000
B C

Financing
5,500,000

(6,000,000)
2,500,000
(1,500,000)
3,000,000
3,500,000 C/B

C
D