Reference no: EM133013639

Questions -

Q1. Assume on January 1,2019, ABC Corporation bought 30,000 shares of BCD Corporation for 10 each and accounted it using the cost method. On July 1,2019, BCD Corporation declares 5:3 share split. If 70% pf shares were sold for 5 per share on August 1,2019. Compute for the gain or loss on sale of investment. How much is the gain or loss on sale of investment?

A. 25,000 loss

B. 35,000 loss

C. 25,000 gain

D. 35,000 gain

Q2. Which of the following statements is incorrect?

A. Under PFRS 9, financial asset shall be measured at amortized cost when the business model is to collect contractual cash flows that are solely payments of principal and interest.

B. Under irrevocable approach in accounting for nontrading equity investment, the amount recognized in other comprehensive income is not reclassified to profit or loss under any circumstances.

C. Under PFRS 9, gain and loss on financial asset shall be presented in profit or loss when the debt investment is measured at fair value through other comprehensive income.

D. All of the statements are correct.

Q3. ABC Company received from customer a P 1,000,000, 6-month, 12% note dated March 1, 2021. The same note has been discounted by XYZ Bank on April 1, 2021 at 16%. Compute for the loss on note receivable discounting.

A. P 70,666.67

B. P 15,666.67

C. P 20,666.67

D. P 50,000.00

Q4. DEF Corporation used conventional retail inventory method to account for inventory.

Cost

Beginning inventory and purchases P 4,500,0000

Retail

Beginning inventory and purchases P 5,500,000

Net Markup 500,000

Net Markdown 100,000

Sales 3,500,000

Compute for the cost of goods sold to be reported during the period.

A. P 1,800,000

B. P 2,660,000

C. P 2,625,000

D. P 1,824,000