Reference no: EM132584295
Question 1.) On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was used to finance the construction of a qualifying asset:
Principal
12% bank loan (1.5 years) P1,000,000
10% bank loan (3 year) 8,000,000
Expenditures made on the qualifying asset were as follows:
Jan. 1 P 5,000,000
March 1 4,000,000
August 31 3,000,000
December 1 2,000,000
Construction was completed on December 31, 20x1.
A.) How much borrowing costs are capitalized to the cost of the constructed qualifying asset?
A. P 1,045,000
B. P 971,111
C. P 1,026,667
D. P 920,000
E. Answer not given
B.) How much is the cost of the qualifying asset on initial recognition?
A. P 14,920,000
B. P 15,045,000
C. P 13,010,000
D. P 14,971,111
E. Answer not given
Question 2.) Entity A is preparing its March 31, 20x1 bank reconciliation. The following information was determined:
The cash balance per books is P280,000 while the cash balance per bank statement is P320,000
Credit Memo - P20,000
Debit Memo - P15,000
Deposit in transit - P75,000
Outstanding checks - P25,000
The disbursement per books are overstated by P45,000
The bank debits are understated by P40,000
How much is the adjusted balance of cash?
A. P380,000
B. P370,000
C. P285,000
D. P330,000
E. Answer not given
Question 3.) ABC Company acquired 100,000 ordinary shares of DEF Company and 300,000 ordinary shares of XYZ Company. Both DEF Company and XYZ Company had 1,000,000 ordinary shares outstanding.
DEF Company reported net income of P3,000,000 and paid dividends of P2,000,000 during the current year.
XYZ Company reported net income of P4,000,000 and paid dividends of P1,000,000 during the current year.
What total amount of income from the investments should be reported for the current year?
A. P 1,200,000
B. P 1,500,000
C. P 1,400,000
D. P 500,000
E. Answer not given
Question 4.) Hera Company provided the following information:
Balance per bank statement, May 31 - 1,300,000 - Balance per book, May 31 - 1,405,000
Deposit outstanding - 150,000 - Bank service charge (5,000)
Checks Outstanding (50,000)
Correct bank balance, May 31 - 1,400,000 - Correct book balance, May 31 - 1,400,000
June data are as follows: Bank Book
Checks recorded 1,100,000 1,250,000
Deposit recorded 800,000 900,000
Service charges by bank 25,000 -
Note collected by bank, P 250,000 plus interest 275,000
NSF checks returned with June 30 statement 50,000
Balances 1,200,000 1,050,000
What is the adjusted cash balance on June 30?
A. P1,250,000
B. P1,400,000
C. P1,050,000
D. P1,200,000
E. Answer not given