IA 3

Assume that Avante Company had post-tax profits for 2X21 of P1,375,000 and issued share capital of P1,650,000 comprising 1,000,000 ordinary shares of P0.65 each and 1,000,0000 at P1, 10% preference shares that are classified as equity. Which of the following are the dividends on preference shares classified as equity?

• 165,000

• 100,000

• 200,000

• 137,500

Candaza Company earns a net profit of P100,000 and has 5,000,000 common shares outstanding that sell on the open market for an average of P20 per share. Also, 500,000 options are outstanding that can be converted to Candaza's common stock at P10 each. Which of the following is the number of the diluted shares?

• 5,114,826 shares

• 5,250,000 shares

• 5,114,286 shares

• 5,014,682 shares

The following are events where an entity shall adjust the amounts recognized in its financial statements to reflect the adjusting events after the reporting period, EXCEPT:

• Announcing or commencing the implementation, a major restructuring.

• The destruction of a major production plant by fire.

• A major business combination or disposing of a major subsidiary.

• Announcing a plan to discontinue operation disposing of assets or settling liabilities attributable to a discontinuing operation, or entering into a bind agreement to sell such assets or settle such liabilities.

The following are considered non-current future outflows of economic benefits required to be settled due to past events, EXCEPT:

• Accounts Payable

• Bonds Payable

• Mortgage Payable

• Sales Taxes Payable

Assume that Seed Corp. purchased two (2) P0.65 shares at a market price of P5 each in Fruit Company on January 01, 2ax1 and that on January 02, 2ax1, the company offered a 1:2 rights issue at P4.25 per share. If Seed Corp. had bought at the market price, how much would be the average cost per share?

• 15

• 20

• 5

• 10

This approach is followed by companies where the principles for deferrals and accruals are used for annual reports.

• Condensed

• Integral

• Interim

• Discrete

It is a change in capital structures that affect the EPS described by a company capitalizing reserves to give existing shareholders more shares.

• Bonus Issues

• Right Issues

• Share Splits

• Buybacks market value

This is computed by adjusting the reported cost of goods sold with any increase or decrease of inventory to arrive at the total purchases for the year.

• Cash payments for taxes

• Cash payments for interest

• Cash payments to suppliers

• Cash receipts from customers

Which of the following is TRUE if cash paid for income tax will be adjusted to accrual basis income tax expense?

• Add Income tax payable, ending

• Add Accounts Receivable, ending

• Deduct Accounts Receivable, beginning

• Deduct Income tax payable, beginning

Percy Corp. reported a net income of P25,000,000 and a depreciation expense of P2,000,000 for the year. The company sold two (2) major equipment: PT001, which cost P1,500,000 and sold at P1,700,000, and PT002, which cost P2,800,000 and sold at P1,700,000. If there were no other non-cash items, which amount is the net cash provided by the operating activities?

• P25,000,000

• P26,900,000

• P27,900,000

• P29,000,000