Odyssey 5 - Difficult

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On January 1, 20x1, Entity A received land with fair value of ₱200,000 from the government conditioned on the construction of a building on the lot. Entity A started immediately the construction and it was completed on December 31, 20x1 for a total cost of ₱ 1,000,000. The building has an estimated useful life of 10 years and zero residual value. How much is the income from government grant in 20x1?

Love Company was incorporated on July 1, 2017, with ₱ 2,000,000 from the issuance of shares and borrowed funds of ₱ 300,000. During the first year of operations, net income was ₱ 100,000. On December 15, Love paid ₱ 8,000 cash dividends. No additional activities affected owner’s equity in 2017. At December 31, 2017 Love Company’s liabilities had increased to ₱ 376,000. In Love’s, December 31, 2017 balance sheet total assets should be reported at:

Mr. Herman’s adjusted trial balance at December 31, 2017, includes the following:

Ordinary Share ₱3 par - ₱360,000

Share Premium - ₱480,000

Treasury Share at cost - ₱30,000

Net Unrealized Loss on Available for Sale Securities - ₱12,000

Retained Appropriated for Contingencies - ₱90,000 Unappropriated Retained Earnings - ₱120,000

What should Mr. Herman report as total shareholder’s equity in its December 31, 2017 balance sheet?

On January 1, 20x1, Atimonan Company acquired 2,000, 10% ₱ 1,000 bonds from XYZ, Inc. for ₱ 1,937,951. The bonds are classified at amortized cost. The principal matures on December 31, 20x41 however, interest is due annually every December 31. The effective interest rate is 11%. How much is the carrying amount on December 31, 20x1? Round off your answer to the nearest peso.

Information on ABC. Co’s defined benefit plan is shown below:

 PV of DBO, Jan 1 120,000

 Current service cost 30,000

 Discount rate 10%

 Benefits paid to retirees 50,000

 Decrease in PV of DBO during the year due to changes in actuarial assumptions 10,000

Compute the ending balance of the PV of DBO.