Reference no: EM133037313

Questions -

Q1. Statement 1: The straight-line method computes the unearned premiums, policy by policy, on a pro-rata basis in respect of the unexpired periods of the respective insurance policies at the end of each period. Statement 2: PFRS 17 exempts an insurer temporarily from some requirements of other PFRS in selecting accounting policies for insurance contract for liability adequacy test. Statement 3: Insurers shall disclose the following information that identifies and explains the amounts in its financial statements arising from insurance contract which includes its accounting policies for insurance contract and related assets, liabilities, income and expenses.

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. 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?

Q3. Alana Corporation signed a contract charging a customer $600,000 to change the windows of a customer's house. The contract includes costs for materials and labor. The company would charge $250,000 for materials if sold separately and $500,000 for labor if the customer will purchase the needed materials. What amount of the transaction price would the company allocate to its performance obligation to provide the needed services to the customer?