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WorksheetsACCTG 23 FINAL EXAM
Total questions: 17
Worksheet time: 31mins
Which is considered an investment property?
Building held for lease under an operating lease
Building under construction
Building held for sale in the normal course of business
A building used in business
An entity has investment property that is held to earn rental income. The entity uses fair value model for reporting the investment property. Which statement is true?
Changes in fair value are recognized in profit or loss of the current period.
Changes in fair value are reported as an extraordinary gain in the period
Changes in fair value are reported as a component of other comprehensive income for the period
Changes in fair value are reported as deferred revenue for the period
All of the following properties fall under the definition of investment property, except
Land held for long-term capital appreciation
Property occupied by an employee paying the market rent
Land held for a currently undetermined use
A building owned by an entity and leased out under an operating leased
[3 MINS] During 2019, L Company purchased trading securities with the following cost and market value on December 31, 2019:
SECURITIES COST MV
A-1,000shares 200,000 300,000
B-10,000shares 1,700,000 1,900,000
C-20,000 shares 3,100,000 2,900,000
The entity sold 10,000 shares of Security B on January 15, 2020, for P 150 per share. What amount of unrealized gain or loss should be reported in the income statement for 2019?
200,000 loss
200,000 gain
100,000 loss
100,000 gain
[3 MINS] On March 1, Manuel Company purchased 10,000 ordinary shares at P 80 per share. On September 30, Manuel Company received 10,000 share rights to purchase additional 10,000 shares at P 90 per share. On September 30, the share had a market value of P 95 and the share right had a market value of P 5. What amount should be reported for investment in share rights on September 30?
150,000
100,000
50,000
60,000
[3 MINS] On March 1, Manuel Company purchased 10,000 ordinary shares at P 80 per share. On September 30, Manuel Company received 10,000 share rights to purchase additional 10,000 shares at P 90 per share. On September 30, the share had a market value of P 95 and the share right had a market value of P 5. What amount should be reported for investment in share rights on September 30?
150,000
100,000
50,000
60,000
[3 MINS] The Buckethead Company has single investment property which had originally cost of P 580,000 on January 1, 2016. At December 31, 2018 its fair value was P 600,000 and December 3, 2018 it had a fair value of P 590,000. On acquisition, the property had a useful life of 40 years. What should be the expense recognized in Buckethead’s profit or loss for the year ending December 31, 2019 under each of the fair value model and cost model?
P 14, 750; P 14,500
P 10,000; P 14,500
P 24,500; P 10,000
P 10,000; P 14,750
Which statement is incorrect regarding financial instruments?
Financial Instruments are contracts
Financial Instruments give rise to a financial asset
Financial Instruments include financial assets, financial liabilities and equity instruments
Financial Instruments should be in writing
Trading securities are most commonly found on the books of
Oil Companies
Manufacturing companies
Banks
Foreign subsidiaries
In accordance with PAS 36 Impairment of Assets, which one of the following statements could be an indicator that an asset may be impaired?
A fall in interest rates that materially affect the asset’s value in use
A decline in the asset’s market value, as would be expected from normal use
Evidence that the asset is physically damaged
The market capitalization of the entity is greater than the carrying amount of its net assets
[ 3 MINS] On January 1, 2018, Go Company purchased P 1,000,000 10% bonds classified as FA@FVTOCI. The bonds were purchased to yield 12%. Interest is payable annually every December 31, 2018 the bonds were selling at 99. On December 31, 2019, Go sold P 500,000 face value bonds at 101. How much should be recognized in 2018 OCI?
P 62,120
P 50,770
P 10,000
NIL
[ 3MINS] On July 2019, SGV purchased 10,000 of BPO’s 50,000 outstanding shares at a price of P 6.00 per share. BPO had earnings of P 3,000 per month during 2019 and paid dividends of P 10,000 on March 1, 2019 and P 12,500 on December 1, 2019. The market value of BPO’s shares was P 6.50 per share on December 31, 2019. Assuming that SGV accounts for its investment in BPO as held-for-trading investment, what would be the total effect on SGV’s profit or loss for the year ended December 31, 2019?
P 2,500
P 4,500
P 6,500
P 7,500
[3 MINS] Yay Corp’s outstanding share capital at December 15, 2020, consisted of the following:
· 30,000 5% cumulative preference shares, par value P 10 per share, fully participating as to dividends. No dividends were in arrears
· 200,000 ordinary shares, par value P 1 per share.
On December 15, 2019, Yay declared dividends of P 100,000.
What was the amount of dividends payable to Yay ordinary shareholders?
P 10,000
P 34,000
P 40,000
P 47,500
When shares without par value are sold, the excess proceeds overstated value shall be credited to
Income
Retained earnings
Share premium
Share capital
A nonmonetary asset is invested in a corporation. Assuming all of the following values are equally reliable, the best measure of the increase in owners’ equity is
Fair value of stock issued
Fair value of the nonmonetary asset received
Book value of the stock issued
Assessed value of the nonmonetary asset received
Which statement is incorrect regarding investment in an associate classified as held for sale?
An entity shall apply PRFS 5 to an investment, or a portion of an investment, in an associate that meets the criteria to be classified as held for sale.
Any retained portion of an investment in an associate that has not been classified as held for sale shall be accounted for using the equity method until disposal of the portion that is classified as held for sale takes place
After the disposal takes place, an entity shall account for any retained interest in the associate in accordance with PFRS 9 unless the retained interest continues to be an associate in which case the entity uses the equity method
When an investment or a portion of an investment, in an associate previously classified as held for sale no longer meets the criteria to be so classified, it shall be accounted for using equity method prospectively.
[3 MINS] During 2019, Princess Co. pays an insurance premium of P 31,800 on a P 900,000 life insurance policy covering the period covering the president. The cash surrender value of the policy will increase from P 165,000 to P 175,200 during 2019. Dividends received from the insurance company during 2019 total P 6,300. The president died half-way through 2019. The policy indicates that the cash surrender value is P 170,100 at that date and 50% of the premium is refunded. The gain on life insurance settlement is
P 714,000
P729,900
P 723,600
P 736,200
