1 .

HI reported the following items on its December 31, 2005 trial balance:
· Accounts Payable, P1,089,000
· Advances to officers and employees, P45,000
· Unearned Income, P288,000
· Outstanding gift certificates issued, redeemable with merchandise, P258,000
· Cash surrender value of life insurance, P75,000
· Bonds payable, face value, P5,550,000
· Discounts on bond payable, P225,000
· Accrued interest receivable, P39,000
How much should be reported in the December 31, 2005 balance sheet as total liabilities?
a. 7,210,000 b. 7,005,000 c. 6,960,000 d. 6,672,000
2 On January 1, 2005, GC received P300,000 covering first 2 years’ rent and a deposit of
P150,000 which is returnable at the end of the ten year lease . The else contract
commenced January 1, 2005.
As Of December 31, 2005 balance sheet, how much should be reported by GC as its
liabilities with respect to the above transactions?
CURRENT NON-CURRENT
a. 0 300,000
b. 150,000 150,000
c. 75,000 150,000
d. 150,000 75,000
3 On October 31, 2006, X discounted its own P1,000,000, 12% note payable for one year.
In its income statement for the year ended December 31, 2006, X should report interest
expense of:
a. 17,600 b. 20,000 c. 26,400 d. 30,000
4
On July 1, 2002, Riviera Manufacturing Co. issued a five year note payable with a face
amount of P250, 000 and an interest rate of 10 percent. The terms of the note require
Riviera to make five annual payments of P50, 000 plus accrued interest, with the first
payment due June 30, 2003. With respect to the note, the current liabilities section of
Riviera’s December 31, 2002, balance sheet should include
a. P12, 500 b. P50, 000 c. P62, 500 d. P75, 000
5
On July 1,2001, Radium Inc. leased a delivery truck from Titanium Corp. under a 3 year
operating lease. Total rent for the term of the lease will be P360,000 payable as follows:

12 months at P5,000 = 60,000.00

12 months at 7,500 = 90,000.00
12 months at 17,500 = 210,000.00
All payments were made when due. In Titanium’s June 30,2003 balance sheet, what amount should be reported as
accrued rent receivable?
a. P60,000 b. P90,000 c. P150,000 d. P210,000
6
ON December 31,2003, Soap Corporation signed an operating lease for a warehouse with Opera Company for ten
years at P30,000 per year. Upon execution of the lease, Opera paid Soap P60,000, covering rent for the first two
years. Soap closed its books on December 31 and correctly reported P60,000 as gross rental income in its 2003
income tax return.
a. P 0 b. P2,500 c. P30,000 d. P60,000
On July 1, 2002, Riviera Manufacturing Co. issued a five year note payable with a face amount of P250, 000 and an
7 interest rate of 10 percent. The terms of the note require Riviera to make five annual payments of P50, 000 plus
accrued interest, with the first payment due June 30, 2003. With respect to the note, the current liabilities section of
Riviera’s December 31, 2002, balance sheet should include
a. P12, 500 b. P50, 000 c. P62, 500 d. P75, 000
8
On April 1, 2000, Hole Company began offering a new product for sale under a one-year warranty. Of the 5,000 units
inventory at April 1, 2000, 3,000 had been sold by June 30, 2000. Based on its experience with similar products, Hole
estimated that the average warranty cost per unit sold would be P80. Actual warranty costs incurred from April 1
through June 30, 2000, were P70,000. At June 30, 2000, what amount should Hole report as warranty liability, if
based on experience, 90% of the units sold
would need repair?
a. 240,000.00 b. 170,000.00 c. 160,000.00 d. 146,000.00
At December 31, 2007, Laser Company had 1,000 gift certificates outstanding, which had been sold to customers
during 2007 for P75. Laser operates on a gross margin of 60%. How much revenue pertaining to the 1,000
outstanding gift certificates should be deferred at December 31, 2007?
a. P0 b. P30,000 c. P45,000 d. P75,000
9 On June 30,2006, Huff Corporation issued at 99, four thousand of its 8%, P1,000 bonds. The bonds were issued
through an underwriter to whom Huff paid bond issue cost of P340,000. On June 30,2006, Huff should report the
bond liability at
a. 3,620,000 b. 3,960,000 c. 3,820,000 d. 4,000,000
10
On July 1, 2003, Boom exchanged 2,600 shares of its p24 par value stock for land. A few months ago, the land was
appraised by an independent appraiser at P100,000. Boom is currently trading at the stock exchange at P45.
Earnings per share is P40. How much should be debited to Land account
a. P62,400 b. P100,000 c. P104,000 d. P117,000

Problem 1
Advances to officers and employees, P 45,000.00
Accounts Payable, P 1,089,000.00
Unearned Income Rent income P 288,000.00
Outstanding gift certificates issued, redeemable with merchandise, P 258,000.00
Cash surrender value of life insurance, P 75,000.00
Bonds Payable, Maturity date June 30, 2025, payable in semi-annual P 5,225,000.00
Discounts on bond payable, P 450,000.00
Accrued interest receivable, P 39,000.00
Estimated Warranty Liabilities P 50000
Finance Lease Liabilty P 5786590.5
Stock Payable P 50000

1 How much should be reported in the December 31, 2019 balance sheet as total liabilities?
a. 12,330,590.50 b. 13,355,590.50 c. 8,130,590.50 d. 12,100,590.50
2 How much should be the Current Liabilities?
a. 2,835,000.00 b. 3,015,000.00 c. 2,637,181.82 d. 2,874,000.00
3 How much should be the Noncurrent Liabilities?
a. 5,775,000.00 b. 9,693,408.68 c. 4,620,000.00 d. 2,255,000.00
4 if there will be a full payment of Accounts Payable the journal entry will be a DEBIT of:
a. Accounts Payable 1,089,000.00
b. Cash 1,089,000.00
c. Account Receivable 1,089,000.00
d. Discount on Bonds Payable 1,089,000.00

Problem 2

GANDAKUTIS KO Inc., sells a box of beauty soup at P300.00. A 6 sachet of Black head remover is offered to customers
on the return of 3 empty box of the beauty soup plus a remittance of P10.00. Each sachet has a cost of P30pesos and it
is estimate the 70% of the box will be returned.
The data for the fist year concerning the premium plan are summarized below”
Sales, 20, 000 box of soap
Black heads remover purchased 50,000 sachet
Box Returned, 5000
1 How much is the total of amount of sale
a. 5,000,000.00 b. 4,000,000.00 c. 5,250,000.00 d. 4,999.000.00
2 How much is the estimated liability for the year ended December 31?
a. 360,000.00 b. 350,000.00 c. 400,000.00 d. 325,000.00
3 How much is remaining Premium Expense?
a. 300,000.00 b. 250,000.00 c. 200,000.00 d. 225.000.00

Problem 3

On December 31, 2018, ALLIAS Corporation issued 2,000 bonds at P 1,150.00. The nominal interest rate is 15%,
payable in semi-annual. The effective interest rate is 10% and bonds will mature on December 31, 2021,

1 USING EFFECTIVE INTEREST METHOD: how much is the Discount or Premium?

a. 291,852.29 b. 218,889.22 c. 291,852.29 d. 218,889.22
Discount Premium Premium Discount
2 USING EFFECTIVE INTEREST METHOD: how much is the interest expense for the year ended December 31, 2019?
a. 136,304.03 b. 127,447.25 c. 149,188.20 d. 142,192.32
3 USING EFFECTIVE INTEREST METHOD: how much is the present value of Bonds Payable as of December 31, 2019?
a. 2,591,852.29 b. 2,548,944.91 c. 2,300,000.00 d. 2,503,892.15
4 USING EFFECTIVE INTEREST METHOD: how much is the unamortized discount or premium as of Dec. 31, 2019?
a. 248,944.91 b. 203,892.15 c. 248,944.91 d. 203,892.15
Discount Premium Premium Discount
31, 2019?

er 31, 2019?