Reference no: EM132840753
Questions -
Q1. Platinum Corporation bought 160,000 shares of Ore Corporation for P60 each. One month from purchase, Ore declared a 2-for-1 stock split down. Platinum subsequently sold 20,000 shares. During the last month of the reporting period, Ore declared P0.80 dividend per share. How much should Platinum report as dividend income?
a. P48,000
b. P112,000
c. P240,000
d. P56,000
Q2. On January 1, 20X9, Fast Bank made a P2,000,000, 8% loan. The P160,000 interest is receivable at the end of each year, with the principal amount to be received at the end of five years. At the end of 20X9, the first year's interest of P160,000 has not yet been received because the borrower is experiencing financial difficulties. The borrower negotiated a restructuring of the loan. The payment of all of the interest for 5 years will be delayed until the end of the 5 year loan term. In addition, the amount of principal repayment will be dropped from P2,000,000 to P1,200,000. The PV of 1 at 8% for 4 periods is .735. No interest revenue has been recognized in 20X9 in connection with the loan. What is the loan impairment loss for 20X9?
a. P1,323,000
b. P530,000
c. P1,470,000
d. P667,000
Q3. Reason Inc. sold its old equipment with original cost of P2,000,000 and accumulated depreciation of P1,800,000 for 3-year P250,000 note. The interest rate of the loan is 7% while the market rate of similar notes is 8%. The journal entry to record the disposal of the equipment would NOT include
a. CR: Unearned Interest Income - 6,443
b. CR: Gain on sale of equipment - 56,561
c. DR: Note Receivable - 250,000;
d. CR: Equipment - 2,000,000
Q4. On December 31, 20X8, the "Receivables" account of Apple Company shows an amortized cost of P1,950,000. Subsidiary details show the following: Trade accounts receivable, P725,000; Trade notes receivable, P100,000; installments receivable, normally due one (1) year to two (2) years, P300,000; Customers' accounts reporting credit balances arising from sales returns, (P30,000); Advance payments for purchase of merchandise, P150,000; Customers' accounts reporting credit balances arising from advance payments, (P20,000); Cash advances to subsidiary, P400,000, Claims from insurance company, P15,000; Subscription receivable due in 180 days, P300,000; Accrued rent receivable, P10,000. How much should be presented as "trade and other receivables" under current assets?
a. P1,125,000
b. P1,290,000
c. P1,600,000
d. P775,000