Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Assets
Current assets
Cash 180,200
Accounts receivable, net (P450,000 - P19,200) 430,800
Inventory (P816,000 - P180,000) 636,000
Prepaid insurance 35,200 1,282,200 1 C
Noncurrent assets
Property, plant and equipment, net
[(P2,227,200-P340,000) -(P720,000-P340,000)] 1,507,200
Advances to officers 23,600 1,530,800 2 A
Noncurrent liabilities
Loan payable (P304,800-P100,000) 204,800
Deferred tax liability 178,200 383,000 5 A
Total liabilities 960,000 6 D
Owners' Equity
Contributed capital
6% Preferred stock, P20 par, 25,000 shares 500,000
Common stock, P1 par value, 36,000 shares 36,000
Paid-in capital in excess of par
(P1,134,400-P500,000-P36,000) 598,400 1,134,400 7 B
Retained earnings
(P1,832,400-P598,400-P19,200-P180,000-P65,000-P73,000-P178,200) 718,600
Total owners' equity 1,853,000 8 A
Question no. 12 - C
Sales proceeds (3,200 shares x P15) 48,000
Partial realization of unrealized gain (P320,000 x 3.2/80) 12,800
Total 60,800
Less CV of shares sold (P1,280,000 x 3.2/80) 51,200
Gain on sale of 3,200 Midas, Inc. shares 9,600
Alternative computation:
Sales proceeds (3,200 shares x P15) 48,000
Less cost of shares sold (P960,000 x 3.2/80) 38,400
Gain on sale of 3,200 Midas, Inc. shares 9,600
Question no. 13 - B
Vanguard bonds (P200,000 x 10%) 20,000
Discoverer bonds (P1,926,000 x 14%*) 269,640
Total interest income for 2006 289,640
Question no. 14 - C
Carrying value, 12/31/05 1,926,000
Add discount amortization in 2006:
Effective interest (P1,926,000 x 14%) 269,640
Nominal interest (P2,000,000 x 12%) 240,000 29,640
Carrying value, 12/31/06 1,955,640
Fair value of Discoverer bonds on 12/31/06 (P2M x 1.01) 2,020,000
Unrealized gain on transfer of securities to be reported under SH 64,360
Question no. 15 - A
Trading securities
Sputnik, Inc. (9,600 x P22) 211,200
Explorer, Inc. [(16,000 - 8,000) x P15] 120,000
10% , P200,000 face value , Vanguard bonds 151,200
Total market value 482,400
Available-for-sale securities
Score Products (32,000 x P42) 1,344,000
Tiros, Inc. (240,000 x P28) 6,720,000
Midas, Inc. [(80,000 - 3,200) x P18] 1,382,400
Discoverer bonds (P2,000,000 x 1.01) 2,020,000
Total market value 11,466,400
PROBLEM NO. 3 - Jung Ho Corporation
Question No. 16 - A
Land, 1/1/06 600,000
Plant facility-portion of FV allocated to land
[(40,000 x 37) x 460/(460+1,380)] 370,000
Land, 12/31/06 970,000
Note: The land acquired with undetermine use will be classified as Investment Property.
Question No. 17 - D
Buildings, 1/1/06 2,200,000
Plant facility-portion of FV allocated to building
[(40,000 x 37) x 1,380/(460+1,380)] 1,110,000
Buildings, 12/31/06 3,310,000
Question No. 18 - B
Machinery and equipment, 1/1/06 1,920,000
Acquired, 5/1/06 [(P896,000/1.12)+P26,000+P52,000] 878,000
Scrapped, 6/30/06 (160,000)
Sold, 7/1/06 (88,000)
Machinery and equipment, 12/31/06 2,550,000
Question No. 19 - B
CV of machine, 6/30/06 (P160,000x.8x.8x.8x.8x.8x.8x.8x.8x.9) 24,159
Question No. 20 - A
Sales proceeds 40,000
Less carrying value, 7/1/06:
Cost 88,000
Less accumulated depreciation [(P88,000-P4,000) x 3.5/7] 42,000 46,000
Loss on sale of machine on 7/1/06 (6,000)
Question no. 27 - D
Metal used in the construction of the machine 320,000
Blueprints used to design the machine 128,000
Wages paid to the employees (P1,200,000 x 60%) 720,000
Cost of machine 1,168,000
Question no. 28 - A
Research and development laboratory expenses 1,000,000
Wages paid to the employees (P1,200,000 x 40%) 480,000
R & D expense 1,480,000
Question no. 29 - C
Cost of patent (see no. 26) 648,000
Less amortization up to 12/31/06 (P648,000 x 2/20) 64,800
Carrying amount of patent, 12/31/06 583,200
Question no. 30 - D
PROBLEM NO. 4 - Jungjong Corporation
Question no. 21 - B
Cost of land—2001 50,000
2002 cost to build road 5,000,000
2002 mine improvements 750,000
Total 2001–2002 cost 5,800,000
Less residual value 600,000
Cost subject to depletion 5,200,000
Divide by total estimated reserves 4,000,000
2004 depletion per ton 1.30
Question no. 22 - C
Original cost to be depleted 5,200,000
Less 2004 depletion 6,500
Remaining cost 5,193,500
2005 mine improvements 275,000
New cost to deplete 5,468,500
Divide by remaining estimated reserves
(4,000,000 - 5,000 +3,000,000) 6,995,000
2005 depletion per ton 0.78
Question no. 23 - D
Building cost (2003) 1,500,000
Less salvage value 250,000
Original cost to be depreciated 1,250,000
Less 2004 depreciation (5,000 x P0.31) 1,550
Remaining cost 1,248,450
2005 new building 225,000
New cost to depreciate 1,473,450
Divide by remaining estimated reserves (see no. 22) 6,995,000
2005 depreciation per ton 0.21
Question no. 24 - C
Remaining cost—beginning of 2005 5,468,500
Less 2005 depletion 780,000
Remaining cost—beginning of 2006 4,688,500
2006 mine improvements 1,100,000
New cost to deplete 5,788,500
Divide by remaining estimated reserves
(6,995,000 - 1,000,000) 5,995,000
2006 depletion per ton 0.97
Question no. 25 - A
Depreciation for 2006 (2,500,000 x P0.21) 525,000
PROBLEM NO. 6 - Lady Choi Corporation
Question no. 31 - A
% of Est. Estimated
Month Sales Returns Returns
January 5,400,000 8% 432,000
February 4,950,000 8% 396,000
March 6,150,000 8% 492,000
April 4,275,000 8% 342,000
May 3,000,000 10% 300,000
June 2,700,000 10% 270,000
2,232,000
Question no. 32 - C
Warranty expense (P2,232,000 x 75%*) 1,674,000
Question no. 33 - B
% of Est. Estimated
Returns Returns
Estimated Subsequent to Subsequent
Month Returns 6/30/05 to 6/30/05
January 432,000 10% 43,200
February 396,000 20% 79,200
March 492,000 30% 147,600
April 342,000 50% 171,000
May 300,000 80% 240,000
June 270,000 100% 270,000
2,232,000 951,000
Question no. 34 - A
Question no. 35 - D
PROBLEM NO. 7 - Lady Choi Corporation
Nominal interest (P2,000,000 x 11%) 220,000
Effective interest (P2,000,000 x 9%) 180,000
Difference 40,000
Multiply by PV of an ordinary annuity of P1 at 9% for 5 periods 3.8897
Premium 155,588
Face value 2,000,000
Issue price 2,155,588
Question No. 36 - B
Carrying value, 1/1/05 (see no. 1) 2,155,534
Less premium amortization for 2005:
Nominal interest (P2,000,000 x 11%) 220,000
Effective interest (P2,155,534 x 9%) 193,998 26,002
Carrying value, 12/31/05 2,129,532
Question no. 37 - C
Retirement price 1,980,000
Carrying value, 12/31/06:
Carrying value, 1/1/06 (see no. 36) 2,129,532
Less premium amortization for 2006:
Nominal interest (P2,000,000 x 11) 220,000
Effective interest (P2,129,532 x 9%) 191,658 28,342 2,101,190
Gain early retirement of bonds 121,190
Question No. 38 - A
Carrying value, 7/1/05 (see below) 4,580,950
Add discount amortization, 12/1/05 to 5/31/05
Effective interest (P4,580,950 x 12% x 6/12) 274,857
Nominal interest (P5,000,000 x 10% x 6/12) 250,000 24,857
Carrying value, 12/31/05 4,605,807
Question No. 39 - B
Bonds Payable 1,500,000
Discount on bonds payable (P1,500,000 - P1,389,647) 110,353
Common stock 15,000
APIC 1,374,647
d Cash 292,500
Subscriptions rec. [(15,000 shares x P25)- P292,500] 82,500
Subscribed common stock (15,000 shares x P10) 150,000
APIC - excess over par of common stock 225,000
Note: Subscriptions receivable should be presented under currents assets
since it is currently collectible.