A17 Practice

Sheesh Company provided the following information pertaining to the pension plan for the current year:

Projected Benefit Obligation, beginning - 7,200,000

Assumed Discount Rate - 10%

Service Cost - 1,800,000

Pension Benefits Paid - 1,500,000

If no change in actuarial estimate occurred in the current year, what is the projected benefit obligation on December 31?

• 6,420,000

• 7,500,000

• 7,920,000

• 8,220,000

What is the employee benefit expense for the current year?

• 1,900,000

• 1,800,000

• 1,850,000

• 2,000,000

What is the defined benefit cost?

• 3,050,000

• 4,550,000

• 3,100,000

• 3,000,000

On December 31, 2022, an entity reported a deferred tax liability of P1,500,000 and a deferred tax asset of P600,000. On December 31, 2023, the deferred tax liability is P2,500,000 and the deferred tax asset is P750,000. What is the deferred tax expense for 2023?

• 1,150,000

• 850,000

• 1,550,000

• 150,000

What amount should be recognized as doubtful accounts expense for the current year?

• 350,000

• 150,000

• 200,000

• 250,000

On January 1, 2014, GG Company purchased 9% P5,000,000 10 year with interest payable on December 31 each year. The bonds purchase price is P 5,424,150.53. The bonds effective interest rate was 7.75%. The company has a business model of collecting all contractual cash flows on all its debt securities.
On December 31, 2019 when the bonds amortized cost was P 5,208,165.12 and a fair value at a market rate of 6.75% was P 5,383,221.81, the company sells P1,000,000 bonds.

Since the company sold more than an insignificant amount of its debt security investment, the management would like to reclassify the debt security to investment measured at fair value to profit or loss.

 

What amount of debt investment should the company report in its December 31, 2019 statement of financial position?

• 4,166,532.09

• 5,208,165.12

• 4,306,577.45

• 4,306,577.45

At the end of the first year of operations, an entity had taxable temporary differences totaling P3,000,000. Of this total, P500,000 relates to current items. The entity also had deductible temporary differences totaling P1,000,000, P250,000 of which relates to current items. Pretax financial income for the current year was P20,000,000. The tax rate is 25%

• 4,000,000

• 5,500,000

• 5,000,000

• 4,500,000

On July 1, 20x2, Chu Company paid 1,000,000 for 100,000 outstanding shares which represent 40% of Shocked Company. At that date, the net assets of Shocked totaled 2,500,000 and the fair values of all of Shocked's identifiable assets and liabilities were equal to their carrying amount.

Shocked reported net income of 500,000 for 20x2, of which 300,000 was for the 6 months ended December 31, 20x2. Shocked paid dividends of 250,000 on September 30, 20x2.

What amount of income should be reported from the investment in Shocked?

• 200,000

• 120,000

• 100,000

• 80,000

1. On January 1, 20x2, Harley Co. acquired 20% of the outstanding ordinary shares of Davidson Corp for 8,000,000, which gave Harley the ability to exercise significant influence over Davidson. The carrying amount of the shares acquired was 6,000,000.

The excess of cost over carrying amount was attributed to a depreciable asset which was undervalued on Davidson's statement of financial position and had a remaining useful life of ten years. (Undervaluation = 2,000,000/10 = 200,000). For the year ended December 31, 20x2, the investee reported net income of 1,800,000 and paid dividends of 400,000 and thereafter issued 5% stock dividend.

 What was the carrying amount of the investment in associate on December 31, 20x2?

• 7,720,000

• 8,000,000

• 7,800,000

• 8,080,000

On December 31, 2022, an entity signed a 7-year finance lease for an airplane. The airplane’s fair value was P8,415,000. The entity made the first annual lease payment of P1,530,000 on December 31, 2022. The entity’s incremental borrowing rate was 12% and the interest rate implicit in the lease known to the lessee was 9%. The rounded present value factors for an annuity due are 5.50 at 9% for 7 years and 5.10 at 12% for 7 years. What amount should be reported as interest expense for 2023

• 619,650

• 826,200

• 757,350

• 841,500