Reference no: EM133028664

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. On April 30, 2021, Ashley admits Bray for an interest in his business. On this date, Ashley's capital account shows a balance of $158,400. The following were agreed upon before the formation of the partnership:

- Prepaid expenses of $17,500 and accrued expenses of $5,000 are to be recognized

- 5% of the outstanding accounts receivable of Ashley amounting to $100,000 is to be recognized as uncollectible

Bray is to be credited with a 1/3 interest in the partnership and is to invest cash. How much cash is to be invested by Bray?

Q3. Antonio Company delivered 150 portable gas stoves to Devon Company on consignment. These stoves cost $2,700 each and could be sold for $4,500. The consignee is to be allowed a commission of 15% of the selling price. The agreement for the consignment contract stated that Antonio Company would draw a sight draft on the consignee for 60% of the cost of the stoves and the advance shall be recovered periodically by monthly deductions (in proportion to units sold) from the remittances which accompany the account sales. All expenses of the consignee are to be deducted monthly as incurred. The consignee rendered an Account Sales at the end of the first month showing among others, the following information: Advertising $6,750; Delivery Expense $3,375 and Commission $10,135. What amount is remitted by Devon to Antonio for the first month?