1. Silir Co., sold to a foreign customer, Bayer, merchandise worth 10,000 FCU.

As of Silir’s
statement of financial position cut-off date on June 30, the exchange rate was P26.60. On
August 15, payment was received in the form of a bank transfer whereby Silir’s account was
credited the amount of P265,400 before any charges. At the time of acceptance of the
merchandise in Kistan, the exchange rate was P26.75. The accounts receivable that Silir
should report in its statement of financial position is:
a. P265,400 b. P266,000 c. P266,300 d. P267,500

2. On December 1, 2014, Courage Company paid P6,000 to purchase a 90-day option for Yuan
400,000. The option’s purpose is to hedge an exposed accounts receivable of Yuan 400,000
from a sale of merchandise to a buyer from Beijing, China. The merchandise is to be shipped
by Courage on December 1, 2014, payment for which is due on March 1, 2015. Relevant rates
and market values at different dates are as follows:
12/01/14 12/31/14 03/01/15
Spot rate P6.80 P6.68 P6.70
(market price)
Exercise price P6.80 P6.80 P6.80
Calculate the fair value of the option contract at December 31, 2014 assuming the time value
component is amortized by straight-line method.
a. P0 b. P 4,000 c. P48,000 d. P52,000
b. On December 1, 2013, San Roque Company whose functional currency is the PHL peso
purchased equipment from a German Company invoiced at Euro 100,000 to be settled on
February 28, 2014. The Euro/peso exchange rates on December 1, 2013, December 31,
2013, and February 28, 2014 were P14.28, P14.31, and P14.41, respectively.

3. Assume San Roque hedged the equipment purchase by a forward contract on December 1,
2013 for the delivery of Euro100,000 on February 28, 2014 at a forward rate of P14.32.
Assume further that the forward rates for a 60-day forward and a 30-day forward at
December 31, 2013 is P14.36 and P14.40, respectively, and that the forward contract is a
derivative financial instrument that is net-cash-settled upon expiry.
Determine the (1) balance sheet presentation of the forward contract at December 31, 2014
and (2) the net cash settlement between the counterparties at February 28, 2014
a. (1) P4,000 liability (2) P9,000 paid by San Roque
b. (1) P4,000 asset (2) P9,000 received by San Roque
c. (1) P 0 (2) P0 received or paid by San Roque
d. (1) 5,000 asset (2) P5,000 received by San Roque
4. Child Care Centers, Inc., a not-for-profit organization, receives revenue from various sources
during the year to support its day care centers. The following cash amounts were received
during 2010:
P2,000 restricted by the donor to be used for meals for the children.

- P1,500 received for subscriptions to a monthly child-care magazine with a fair market value to
subscribers of P1,000.

- P10,000 to be used only upon completion of a new playroom that was only 50% complete at
December 31, 2010.

What amount should Child Care Centers record as contribution revenue in its 2010 Statement of
Activities?

a. P 2,000 b. P 2,500 c. P10,000 d. P11,000

5. A not-for-profit community hospital provides its patients with services that would normally be
charged at P1 million. However, a P200,000 reduction is estimated because of contractual
adjustments. Another P100,000 reduction is expected because of bad debts. Finally,
P400,000 will not be collected because the amounts are deemed to be charity care. Which of
the following is correct?
a. Patient service revenues = P1 million; net patient service revenues = P300,000.
 b. Patient service revenues = P1 million; net patient service revenues = P400,000.
c. Patient service revenues = P600,000; net patient service revenues = P300,000.
d. Patient services revenues = P600,000; net patient service revenues = P400,000.

6. Clara Hospital, a private not-for-profit hospital, earned $250,000 of gift shop revenues
and spent $50,000 on research during the year ended December 31, 2001. The $50,000
spent on research was part of a $75,000 contribution received during December of 2000
from a donor who stipulated that the donation be used for medical research. Assume none
of the gift shop revenues were spent in 2001. For the year ended December 31, 2001,
what was the increase in unrestricted net assets from the events occurring during 2001?
a. $300,000 b. $200,000 c. $250,000 d. $275,000
7. Swatmore Hospital, a nonprofit hospital affiliated with Swatmore University, received
the following cash contributions from donors during the year ended December 31, 2000:
Contributions restricted by donors for research $50,000
Contributions restricted by donors for capital acquisitions $250,000
Neither of the contributions were spent during 2000; however, during 2001, the hospital
spent the entire $50,000 contribution on research and the entire $250,000 contribution on
a capital asset that was placed into service during the year. The hospital has adopted an
accounting policy that does not imply a time restriction on gifts of long live assets. On
the hospital’s statement of activities for the year ended December 31, 2001, what amount
should be reported for “net assets released from restrictions”?
a. $50,000 b. $300,000 c. $250,000 d. $0

On October 12, 2008, DEF Corp., obtained a noncancelable sales order from a Thailand firm for a custom
made machine. The contract price was 100,000 baht. On October 12 , 2008 DEF Corp. entered into a
foreign exchanged forward to sell 100,000 baht in 100 days at the forward rate of P3.15. The machine
was delivered on December 31, 2008 and collection on January 20, 2009.

10/12/2008 12/11/2008 12/31/2008 1/20/2009

Spot rate (baht) P3.20 P3.00 P3.09 P2.97
Forward rate P3.15 P2.98 P3.08
8. The December 11, 2008 profit and loss statement, foreign exchange gain or loss on the
hedging item/commitment amounted to
a. P17,000 loss c. P20,000 loss
b. P17,000 gain d. P20,000 gain
9. The December 11, 2008 profit and loss statement, foreign exchange gain or loss on the
hedging instrument amounted to
a. P17,000 loss c. P20,000 loss
b. P17,000 gain d. P20,000 gain
10. What is the reported sales amount in the income statement in 2008
a. P300,000 b. P308,000 c. P309,000 d. P317,000

11. The December 31, 2008 Accounts Receivable amounted to

a. P298,000 b. P300,000 c. P309,000 d. P320,000
12. On December 31, 2008 the foreign exchange gain or loss on the amount receivable
amounted to
a. P9,000 loss c. P10,000 gain
b. P9,000 gain d. P11,000 loss
13. On December 31, 2008 foreign exchanged gains or loss on the hedging instrument
amounted to
a. P7,000 gain c. P9,000 gain
b. P7,000 loss d. P11,000 loss
14. On January 20, 2009 the net foreign exchange gain or loss amounted to
a. P0 c. P1,000 net gain
b. P2,000 net gain d. P1,000 net loss