Reference no: EM133041007

Questions -

Q1. Statement 1: PFRS 17 permits the introduction of an accounting policy that involves remeasuring designated insurance liabilities consistently in each period to reflect current market interest rate. Statement 2: An insurer is not allowed to introduce the following accounting practice which includes using non-uniform accounting policies for the insurance liabilities of subsidiaries. Statement 3: PFRS 17 provides discretionary participation features in the insurance contract recognized separately from the guaranteed elements, where the issuer of such contract shall classify that feature as either a liability or a separate component of equity.

Only Statement 1 is correct

Only Statement 1 is incorrect

Only Statement 2 is correct

Only Statement 2 is incorrect

Only Statement 3 is correct

Only Statement 3 is incorrect

All statements are correct

All statements are incorrect

Q2. Anthony, Brooklyn, and Cali are partners sharing profits in the ratio of 5:3:2, respectively. As of December 31, 2021, their capital balances were $87,800 for Anthony, $80,000 for Brooklyn, and $67,200 for Cali. On January 1,2022, the partners admitted Damian as a new partner and according to their agreement; Damian will contribute $80,000 in cash to the partnership and also pay $10,000 for 15% of Brooklyn's share. Damian will be given a 20% share in profits, while the original partners' share will be proportionately the same as before. After the admission of Damian, the total capital will be $330,000 and Damian's capital will be $70,000. How much is the balance of Brooklyn's capital, after the admission of Damian?

Q3. Mia Corporation consigned 4,800 medical equipment costing $90 and retailing for $3,000 each to Andres Company. Freight cost of $4,800 was paid as freight expenses by the consignor. After a month, Mia received $213,030 in full settlement of the balance due. The consignor deducted a commission of $600 for each equipment sold, $270 for delivery expense and $300 for advertising expense. How many medical equipment were sold?

Q4. On January 1, 20x6, Bad, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following data pertains to the said contract each customer is to sign. Each house costs $4,000,000 each (a total of 10 houses are to be constructed). Construction will take 2 years to complete. Payment terms are 50% by the end of the 1st year, 25% at the end of the 2nd year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete.

The company incurred the following expenses for 20x6.

Total cost of land - $2,000,000;

Estimated total cost of construction - $25,000,000, (including the costs for the common areas, streets and light posts amounting to $5,000,000);

Estimated total cost of contract for the 10 houses - $40,000,000;

In CY 20x6, total construction cost incurred amount to $13,000,000 with all common areas already fully constructed, while fair value of the land is now worth $3,500,000. The contract is considered to be a multiple contract.

What is the amount of revenue to be recorded for the year by Bad?