Page |1

1. OnMa y1,ye ar1,ac ompanyborrowed₱3,000cas

handsi
gneda13per
centnot
epayabl
edue
April30,year3.I nte
r e
stispai
d eachApri
l30.Theacc
ounti
ngper
iodendsDecember31.
the
adj
usti
nge ntryatDe cember31,
year1woul
di ncl
ude:
a. debitnote spa yable₱390
,
b. creditinterestpayable₱130
c. debitinterestexpe nse₱390
d. creditinterestpayable₱260

2. Unamorti
zedbonddi scountshouldberepor
tedonthefinanc
ials
tat
eme
ntsoft
hei
ssue
rasa
a. Dir
ectdeducti
onf r
om thefaceamountofthebond
b. Dir
ectdeducti
onf r
om thepresentval
ueofthebond
c. Def
erredcharge
d. Par
toftheiss
uec ost
s

3. Forabondi ss
uewhi chsell
sforles
sthanit
sfac
eamount
,themar
ketr
ateofi
nte
res
tis
a. Dependentont heratest
atedonthebond.
b. Equaltoratestate
dont hebond.
c. Lessthanratestate
dont hebond.
d. Higherthanr at
es t
atedont hebond.

4. Themar ketpr
iceofabondi ssue datadis
countisthepresentvalueofitspr
inci
palamountatthe
market(effective)ra
teofint
er est
a. Lessthepresentvalueofallfutur
eint
erestpayment
satt hemar ket(effect
ive)r
ateofint
ere
st.
b. Lessthepr esentvalueofal lfut
ureintere
stpayme nt
sa tther at
eofi nt
erests
tate
d onthe
bond.
c. Plusthepresentvalueofal
lf utur
eint
erestpayment
satt hemar ket(
effe ct
ive)r
ateofint
ere
st.
d. Plusthepr esentvalueofal lfut
ureinter
estpaymentsa tther at
eofinterests
tat
edont he
bond.

5. Whichofthefoll
owingisnotarel
evantconsi
der
ati
onwheneval
uati
ngwhe t
hertoderecogni
zea
financi
alliabi
li
ty?
a. Whethertheobli
gat
ionhasbeendisc
harged.
b. Whethertheobli
gat
ionhasbeencancel
ed.
c. Whethertheobli
gat
ionhasexpi
red.
d. Whethersubst
anti
all
yallt
heris
ksandr ewar
dsoft
heobl
igat
ionhavebeent
ransf
erred.

6. Wha ti
stheeffe cti
veinteres
trateofabondorot herde btinst
rume ntme asuredatamor tizedc ost
?
a. Thes ta
tedc ouponr ateofthede btinstr
ument .
b. Thei nter
estr atecurrentl
yc hargedbyt hee nti
tyorbyot he
rsf orsimilarde btinst
rument s
(i
.e
.,s i
mi l
arr e
mai ni
ng mat urit
y ,cash flow pa ttern,c ur
renc y
,c r
edi tri
sk,c ol
lateral
,and
i
nterestbasis).
c. Thei nter
estr at
et hatexact
lydi scountsesti
ma t
edfut urecashpa yment sorr eceipt
sthr ough
theexpe ct
edl i
feoft hede btinstrumentor ,whe nappr opri
ate,as horterper i
odtot hene t
carr
yingamountoft heinstrume nt.
d. Thebas ic
,risk-fr
eeinteres
tr at
etha ti
sder i
vedf rom observabl
egover nme ntbondpr i
ces.

7. Whichofthefoll
owi
ngstatementsi
sf al
se?
a. Bondscarrynoc
orporateownershipprivil
eges
.
b. Abondi safinancialcont
ract
.
c. Bondpricesr
emainfixe dovertime.
d. Abondi ss
uermustpayperiodi
ci nt
erest.
 Page |2

8. Mostbonds:
a. ar
emone ymar kets
ecuri
ti
es.
b. ar
efloa ti
ng-rat
esecur
iti
es.
c. gi
vebondholdersavoic
eintheaffai r
softhecor
pora
tion.
d. ar
einter
est
-beari
ngobli
gati
onsofgovernment
sorcor
por a
tions
.

9. Inan“assetswap,”whe realiabi
li
tyiss et
tl
edt hroughthet r
ans f
erofnonc as
has set
,
a.t hegainorl ossonsettl
ementiscomput edast hediffer encebetwee nthecarryingamountof
thel
iabil
ityextingui
shedandt hefairvalueoft henoncashas sett
ransfer
red.
b. thegainorl ossonsettl
ementiscomput edast hediffer encebetwee nthecarryingamountof
thel
iabil
ityextingui
shedandt hec arr
yingamountoft henonc ashassettr
ansferr
ed.
c.t hegainorl ossonsettl
ementiscomput edast hediffe rencebetweent hecarryingamountof
theli
abili
tye xti
nguishedandt hemor eclearl
yde te
rmi nablebetwee nthef ai
rvalueofthe
l
iabi
lityexti
ngui s
hedandt hecarryingamountoft henonc ashassett
ransfer
red.
d. nogainorl ossisrec
ognized

10.Enti
tyA i ss
uesc onverti
blebondswi thfac
eamountof₱2, 000,000for₱2,
600,
000.Eac h₱1,
000
bondi sconver t
ibl
ei nto10s har
eswithparvalueof₱60pers hare.Oniss
uancedate,thebonds
aresell
inga t102wi thouttheconver
sionopt
ion.Whati
svalueal l
ocat
edtotheequit
yc omponent
oniniti
alr ec
ognition?
a. 2,040,000
b. 540,000
c. 560,000
d. 460,000

11.Anent i
tyisthedefendantinapa t
entinfringeme ntla
ws uit.Theentity’sl
a wyer
sbeli
evet her
eisa
30% chancethatt
hec ourtwi l
ldis
mi ssthec aseandt heent i
tywillincurnoout flow ofe conomi c
benefit s
.Howe ver,ifthecourtrulesinf avorofthec laimant,thel awyersbel
ievethatthereisa
20% chancethatt
hee nt
itywi l
lberequiredt opa ydamage sof₱800, 000(theamounts oughtby
thecl
aimant)andan80% c hancet
hatt hee nti
tywillbere quiredtopa ydamagesof₱400, 000(the
amountt hatwasr ecent
lya warded byt hes amej udgei nas i
mi l
arc ase).Ot
herout c
omesar e
unli
kely.

Thec ourtisexpect
edt orulei nlateDe c
ember20x2.The reisnoi ndi
cat
ionthatthec l
aimantwil
l
set
tleoutofc ourt
.A 7% r i
s kadjustmentfact
ort otheprobabi
lit
y-wei
ghtedexpec
tedc ashflowsi s
consider
ed appropri
atetor efle c
tt heuncertaint
iesinthec ash flow esti
mates. An appropri
ate
disc
ountr atei
s10% peryear.How muc hist
hepr ovi
sionf
orlawsuitatDec
ember31, 20x1?
a.436,360 b.446,908 c.326,
836 d.
0

12.A manuf acturergiveswar r

anti
esatt
heti
meofsaletopurchaser
sofi
tsproduct
.Unde rt
heterms
ofthec ontractofs ale,themanufac
tur
erundertakestomakegood,byr epa
irorr epl
acement
,
manuf acturi
ngdef ectsthatbec
omeapparentwit
hinoneyearf r
om t
hedateofsale.Onthebasi
s
ofexpe r
ience,itisprobable(i.
e.
,morel
ikel
ythannot )t
hattherewi
llbesomec l
aimsunderthe
warranties.

Sal
esof₱40mi
ll
ionwe
remadee
venl
ythr
oughout20X1.

AtDe cember31,20x1t
heexpe
ndit
uresforwarr
ant
yrepai
rsandr epl
acementsforthepr oductsol
d
in20x1areexpect
edtobemade50% i
n20x1and50% i
n20x2.Assumefors i
mpli
cit
yt hatallt
he20x2
outflowsofec onomicbe
nefitsrelat
edtothewarr
ant
yr epai
rsandr epl
acementstakepl ac
eonJ une
30,20x2.
 Page |3

Expe r
ienceindicatestha
t95% ofpr oduc
tssoldrequi
renowar rant
yr epair
s;3% ofpr
oduc t
ss ol
d
requireminorrepai r
scost
ing10% ofthesal
eprice
;and2% ofproduct
ss oldrequi
remaj
orrepair
sor
replacementcosting90% ofsaleprice
.Thee nt
it
yhasnor easontobelievefutur
ewarrant
yc l
aims
willbediffer entf r
om i
tsexper
ience.

AtDecember31,20x1,theappropr
iat
edisc
ountfac
torforcashflowsexpe ct
edt ooccuronJune30,
20x2i
s0.95238.Fur
thermor
e,anappropr
iat
eri
skadjust
mentf ac
tortor
efle c
tt heuncer
tai
nti
esint
he
cashflow estimat
esisani
ncrementof6perc
enttotheprobabil
it
y-we
ight
ede xpect
edcashflows.

How muc hi
sthewar
rant
yprovi
si
onatDecember31,
20x1?
a.424,
000 b.
840,
000 b.800,
000 d.
752,
000

13.AsofDe cember31,20x1,ROUSEAWAKEN Co.hasadopt edadetai

ledfor
malpl antoc l
oseone
ofit
stoysdivis
ionsandputupane w di
vis
iontomanufact
urewarfar
ewe apons.Thepl anwas
communic at
edthroughapubl i
cannouncementand al
lofthos
eaffec t
edbyt heclosurewer
e
inf
ormed.ROUSEe s
timate
sthefol
lowi
ngcostsi
nrel
ati
ontothec
losureoft
hedi vi
sion:

Termina t
ionbenefit sofempl oyeesterminatedasa
resultofthec l
osure ₱4,
000,
000
Costsofr etr
ainingandr elocat
ingretaine
dempl oyees 8,
000,
000
Paymentf orunpai dpur chasesmadebyt hedivision 16,
000,
000
Ne ws yst
emsanddi stri
but i
onne t
wor ksforthewe apons
divisi
on 80,
000,
000
Mar keti
ngc ostsforthewe aponstobemanuf acturedby
thene w divis
ion 24,
000,
000
Expe ct
edl osse
sdur ingthefir s
tye arofoperationsof
theweaponsdi visi
on 80,
000,
000

How muc hi
stheprovisi
ontoberec
ognized?
a.4,
000,
000 b. 12,000,
000 c.84,
000,
000 d.20,
000,
000

Usethefol
lowi
nginformatio
nfort
henextt
woq ues
t i
ons
:
RISIBLE FUNNY Co.pr ovi
des3-yearwar r
antyf orthepr oductsits
ell
s.RI
SIBLE est
imat
estha
t
war r
antycosts₱400peruni tsold.AsofJanuar y1,20x1,t
hel i
abil
it
yforwarr
antyhasabalanc
eof
₱800,000forunit
ss oldin20x0.Duringtheye arRISIBLEsold5,000unit
sandactualwarr
antyc
ost
s
i
nc urredwere₱1,240,000.

14.How muc hist

hewar
rantyexpens
etober ecogni
zedin20x1?
a.2,
000,
000 b.
1,240,
000 c .
3,240,
000 d. 4,
240,000

15.How muc hist

hebal
anceofthewar
rantyobli
gat
ionasofDe c
embe
r31,
20x1?
a.1,
560,
000 b.2,
000,
000 c .3,560,
000 d. 2,800,
000

16.PROFUSEEXTRAVAGANTCo.l aunchedas al
espromoti
oni n20x1.Forever
yt enempt ypac
ks
ret
urnedt o PROFUSE pl us₱200,c us
tomerswi l
lrec
eiveas etofkit
chen knives.PROFUSE
est
imatestha t40% ofthepackss ol
dwi l
lber ede
emed.Informationontrans
actionsduringt
he
yeari
sasf oll
ows :
Units Amount
Sal
es 500,
000 3B
Set
sofkitc
he nkni vespurc
hased (₱800perset) 300,
000 240M
Numberofpac ksredeemed 45,
000
 Page |4

How muc hi
sthepre
mi um expe
nsein20x1?
a.8,
000,
000 b. 12,
000,000 c.14,
000,
000 d.
16,
000,
000

17.OnJ anuary1,20x1,CONFOUND Co.guar ant

eeda₱4,000,
000loanobtai
ne dbyCONFUSE,Inc.
fr
om abank. OnDe c
ember31,20x1,CONFUSEde f
ault
edoni t
sloanandi tbec
ameprobabl
etha
t
CONFOUND wi llbeheldli
abletot hebankforthe₱4,000,
000loantakenbyCONFUSE.How
muchi stheprovi
s i
ontoberecognized?
a.4,
000,000 b.2,
000,
000 c .1,
000,
000 d. 0

18.OBTUSE DULL Co.i sinvolve

di n at axdi s
put e.OBTUSE haswr ongful
lypai dtaxesand i
s
claimi
ngf orref
undoft hetaxesithaspr e
vious l
ypaid.AsofDe cember31,20x1,OBTUSE’sle
gal
counse lwasver yc onfidentt hatOBTUSEwi llbeabletor ecoverthetaxr ef
undamount i
ngt o
₱40M i nt hecomingyear.Theent r
yt orecognizetheprobabl
er ecei
ptofthetaxrefundincl
udes
a.ade bittorecei
vable d.aandb
b. acr
edi ttogain e.
noneoft he s
e
c.ade bittoprepaidasset

19.OnDe cember1,20x1,ABC Co.hi

redJuanitaPer
eztobeginworki
ngonJ anuary2,20x2a
ta
monthlysal
aryof₱4,
000.
ABC'sbal
ancesheetonDecember31,
20x1wil
lshow al
iabi
li
tyof
a. ₱4,
000.
b. ₱48,
000.
c. ₱480,
000.
d. NoLiabil
it
y

20.Ent i
tyA has20e mpl oyeeswhoar ee achentitl
edtooneda ypaidvac ati
onl ea vef
ore ac
hmont h
ofs ervicer ende r
e d.Unus ed vacation leavesarec arr
iedf orward and can beus edinf uture
per i
odsi fthec urrentper i
od’ senti
tlementi snotusedi nfull.Moreover,e
mpl oye esareenti
tl
edt o
ac ash pa ymentf orunus ed entit
lementwhe nthe yleavet heentity.Allt heempl oyeesha ve
rende r
e ds ervicet hroughoutt hecur rentye arand havet aken atotalof150da ysofvacation
leaves.Thea veragedai lyr ateoftheempl oyeesint hec ur
rentper i
odi s₱1,000.However ,a5%
increaseint her atei se xpec tedtotakei ntoe ffectint hefoll
owingye ar.Bas edonEnt it
yA’spas t
exper i
enc e
,thea ver ageannualempl oyeet urnoverratei
s20%. How muc hwi llEnt i
tyA accr
uea t
theendoft hec urrentyearf orunuse dent i
tle
me nts
?
a.0 c.90,000
b. 75, 600 d. 94,
500

21.Underitspos t
-employmentbenefitpl an,Enti
ty A agre
esto make annualcontri
buti
onsof
₱500,
000toar eti
rementfund.Whenane mpl
oyeereti
res
,heorsheisentitl
edtoal umps um
paymentandmont hl
ypensionpaymentstobede t
erminedbas
edont helevelofcontr
ibut
ions
andtheinves
tme ntperf
ormanceoft
hefund.

In20x1,duet oc as
hflow pr obl
ems ,Enti
tyA wasonl yabletocont
ribut
ehalfoft
hea gr
eed
contr
ibutions
.In20x2,Ent
ityA c ont
ributed₱900,
000t
ot hefund.How muchret
ir
ementbenefit
expensesshouldEnti
tyArec ognizei
n20x1and20x2, r
espect
ivel
y?
20x1 20x2
a. 200,000 900,000
b. 200,000 500,000
c. 500,000 600,000
d. 500,000 500, 000
 Page |5

22.EntityA has20e mployeeswhoar ee achentitl

edt ooneda ypaidvac at
ionl ea
vef oreachmont h
ofs ervi
cer ende r
ed.Unus ed vacat
ion lea
ve sarec ar
riedfor ward and c an beus e
di nf uture
periodsifthec ur
rentperiod’se nt
it
lementi snotus edinfull.However ,unut il
izede nti
tlement s
aref orf
eit
ed whe ne mployeesl eave the enti
ty.Al lthe empl oyees ha ve rendered s ervice
throughoutt hec urr
entye arandha vetakenat otalof150da ysofvac ationl eaves.Thea verage
dailyrat
eoft heempl oye
esi nthec urrentperiodis₱1,000.Howeve r,a5% i nc
reaseint her ateis
expectedtot akeintoe ffec ti
nt hefoll
owingyear .BasedonEnt it
yA’ spas texpe r
ience,thea verage
annualempl oyeeturnoverr at
eis20%.How muc hwi l
lEnt i
tyA ac cr
uea tt heendoft hec urrent
yearforunus edenti
tl
ement s?
a.0
b. 90,000
c. 75,600
d. 94,500

23.Underaprofit -
sharingplan,Enti
tyA a
greestopayit
semployee
s5% ofi
tsannualpr
ofit .The
bonusshal
lbe divided among theemployeescur
rent
lyemploye
d asatyear
-end.Re
levant
inf
orma
tionfol
lows:

Profitf ortheyear ₱8,

000,
000
Empl oyeesa
tt hebegi
nningoftheyear 8
Averageempl oyeesduri
ngtheyear 7
Empl oyeesa
tt heendoftheyear 6

I
fyouar eanal
umnusofEnt
it
yA,
how muc
hbonusdoyoue
xpe
ctt
ore
cei
ve?
a. 66,
667
b. 50,
000
c. 57,
143
d. 0

24.Thecomputat
ionofe
mpl
oyeer
eti
rementbenefit
sexpe
nsei
saddr
ess
edi
nthi
sst
andar
d.
a. PAS17
b. PFRS7
c. PAS19
d. PFRS9

Uset
hefol
lowi nginfor
ma ti
onforthene
xtt
hre
eque
stio
ns:
I
nfor
ma ti
ononEnt it
yA’ sde finedbenefitplanisasf
oll
ows
:
PVofDBO –J an. 1,20x1 2,
000,
000
FVPA –J an.1,20x1 1,
800,
000
PVofDBO –De c.31, 20x1 2,
900,
000
FVPA, end. –Dec . 31,20x1 2,
600,
000
Currents ervic
ec os t 400,
000
Act
uar ialloss 200,
000
Ret
ur nonpl anas sets 120,
000
Dis
countr ate 10%

25.How muc histhene

tdefine dbenefitl i
abi
li
ty(
ass
et)t
obepr
esent
edi
nEnt
it
yA’
sDe
cember31,
20x1statementoffinanc
ialpos
iti
on?
a.( 300,000) c.(
200,
000)
b. 300,000 d.200,
000

6.Ho
2 w muc hist
hec
ompone
ntoft
he20x1define
dbenefitc
ostt
ober
ecogni
zedi
npr
ofitorl
oss
?
a. 400,
000 c
.
 Page |6

b. 420,
000 d.

7.Ho
2 w muc histhe c
omponentoft he 20x1 de
fine
d bene
fitc
ostt
o be r
ecogni
zed i
n ot
her
compr ehensi
vei
ncome–(i
ncome)/l oss?
a.( 140,000) c.260,000
b. 140,000 d. (260,
000)

28.You aret heGe ne ralMana gerofEnti

ty A.You ha
ver e
c ei
vedtheact
uar
ialr eportf
oryour
company’ sdefine dbenefitpl an.
Therepor
tshowsthefoll
owingi
nfor
mat
ion:
PVofDBO –J an. 1,20x1 1,500,000
FVPA –J an.1,20x1 1,200,000
PVofDBO –De c.31, 20x1 1,800,000
FVPA, end.–Dec . 31,20x1 1,310,000
Act
uar ialgai
n 100,000
Ret
ur nonpl anas sets 110,000
Dis
c ountrate 5%

Whe nreport
ing on yourc ompany’s ye
ar-end highli
ghtsoffinanc ials
ummar y,whi
ch oft
he
f
oll
owingwi l
lyoureportt
ot heBoar
dofDi rectors(t
he‘bi
gbosses
’)?
a. Yourcompany’snetl
iabi
li
tyforret
ireme ntbenefitsha
sincreasedby₱490,
000.
b. Yourcompany’snetl
iabi
li
tyforret
ireme ntbenefitsha
sde creas
edby₱300,
000.
c. Yourcompany’snetl
iabi
li
tyforret
ireme ntbenefitsha
sincreasedby₱190,
000.
d. Iwil
ltel
lthem not
hing.

29.Enti
tyA (customer )ent ersintoac ontractwi thEntityB( supplier
)fort
heus eofadatapr oces
sing
equipment.Ac cordi ngt othec ontract,Enti
tyA s hal loperatetheequipme ntonl
yinac cordance
withthes t
andar doper ati
ngpr ocedur esstatedint heac c
ompanyi ngus er’
smanual.I nasses
sing
theexi
stenceofal e ase,doesEnt it
yA ha vether i
ghttodirecttheus
eoftheas set
?
a. No,bec ausetheas set’
susei srestri
cted.
b. Yes,becauseEnt it
yAhast her ighttodi recthow andf orwha tpurposetheasse
ti sused.
c. Yes,becauset heas set
’susei spr edeter
mi nedandEnt it
yBi sprecludedfrom changingthat
predeterminedus e.
d. Ma ybeyes,ma ybeno, butexactlyIdon’ tknow.

30.Whichoft hefoll
owi ngisnotoneoft hecr
iteri
awhe nde t
ermini
ngwhe therac
ontrac
tisor
cont
ainsale as
e?
a.I denti
fie das set
b. Identi
fie dl i
abil
ity
c. Righttoobt ains ubs
tant
ial
lyalloftheeconomicbenefit sfrom us
eofan ide
ntified as
set
throughouttheper i
odofuse
d. Righttodirecttheuseoftheident
ifiedassetthr
oughouttheperi
odofuse

31.Whichofthefoll
owings t
atementsiscor
rectregardi
ngtheac countingf
orleases?
a. Theles
sordepreci
atestheleasedass
e tunderafinanc elease.
b. Theles
seedeprecia
testheleasedass
e tundera“ s
hort
-term”ora“l ow-valuedasset
”le
ase.
c. Whendi sc
ountingleasepa ymentsthelessorandthel esseeus et
heinterestr
ateimpli
citi
n
thel
ease.
d. Anentit
yc anneverbebothal ess
orandal esseeofasamel e
asedasset
.

32.Acc
ordingtoPFRS16,leasel
iabil
it
iesar
epr e
sentedinthel
ess
ee ’
sst
ateme
ntoffinanc
ialposit
ion
a.separatel
yfr
om theotherli
abil
iti
esoft
hel ess
ee.
b. t
ogetherwith ot
herl i
abil
it
ies,with di
sclosur
e ofthe l
ine i
temstha
tinc
lude t
he lease
l
iabi
lit
ies
.
 Page |7

c. aorb
d. notpr
esent
edi
nthel
ess
ee’
sfinanc
ials
tat
ement
sbutonl
yint
hel
ess
or’
sfinanc
ials
tat
ement
s

33.AccordingtoPFRS16,r i
ght-of-
useas se
t sarepr es
ented i
nthel ess
ee ’
sstat
ementoffinanc ial
posi
tion
a.s eparat
elyfr
om theotheras s
etsofthelessee.
b. togetherwith ot
herasset
sasi ftheywe reowne d,with di
sclosureofthelinei
temst ha
t
incl
udet heri
ght-
of-us
eass et
s.
c. aorb
d. notpr e
sente
di nthele
ssee’sfinanc ialst
atementsbutonlyinthel e
ssor
’sfinanci
alst
atements

34.OnDe ce
mber30,20x5,HaberCo.l easedane w machi
nefrom GreggCor
p.Thef
oll
owi
ngda
ta
rel
atetothel easetr
ansact
iona
tthei
nceptionofthel
eas
e:
Leaseterm 10years
Annualr entalpayableatt
heendofeac
hl easeye
ar ₱100,000
Usefulli
feofmac hine 12years
Implic
itinterestrat
e 10%

Thelea
sehasnorenewalopti
on,andthepos
sessi
onofthemac
hi ner
eve rt
stoGreggwhe
nthel
eas
e
t
erminat
es.
Attheinc
epti
onoft hel
eas
e,Habershoul
drecor
daleasel
iabil
ityof
a
.0 b.615,
000 c
.630,
000 d. 676,
000

35.OnJ anuar y2,20x6,As heCompanyent er

edi ntoat en-yearnoncancell
ableleas
er equir
ingyear-
endpa yment sof₱100, 000.Ashe'
sinc
rement alborrowingr at
eis12% whi lethelessor
'simplic
it
int
erestr at
e,known t oAs he
,is10%.Owner ship ofthepr opert
yr emainswi tht helessorat
expi
ration ofthe lease.The reisno bargain pur chaseoption.Thel eased property hasan
est
ima t
e deconomiclifeof12ye ar
s.Whatamounts houldAs hecapit
ali
zefort hi
sleasedproperty
onJanuar y2,20x6?
a.1,
000,000 b.614,500 c.565,000 d.0
36.NealCor p.ent
eredintoanine-yearl
easeonawar ehous eonDec ember31, 20x1.Leasepa
yme nt
s
of₱52,000,whichincludespa ymentfornon-leas
ec ompone ntof₱2, 000(atstand-al
onesel
li
ng
pric
e),aredueannual ly
,beginningonDe cember31,20x1,ande veryDe cember31t her
eaft
er.
Nealdoesnotknow t heint
erestrat
eimplici
tint helease;Neal
'sincrementalborrowingrat
eis
9%. Whatamounts houldNe alrepor
tasleaseli
abili
tyatDe c
ember31, 20x1?
a.280,
000 b.291,
200 c.450,
000 d.468,000
37.Robbi ns,I
nc .
,leasedamac hi
nef r
om Rea dyLeasingCo.Thel easer equir
es10annualpa yments
of₱10, 000be ginningi mmedi atel
y.Thel eas
es pecifiesani nterestrateof12% andapur chase
optionof₱10, 000a ttheendoft hetenthyear
,event hought hemac hi ne'
sesti
ma t
edvalueonthat
datei s₱20,000.Itisreasonablyc ert
ainthatRobbinswi llexerci
set hepur chaseopti
on.Robbins
'
incr
e me nt
albor rowingr ateis14%.Wha tamounts houldRobbi nsr ecordtheright
-of
-useass
etat
thebeginningoft heleaseterm?
a.62,160 b.64,860 c.66,
500 d. 69,
720

38.OnJ anuary1,20x7,Babs on,Inc

.,l
e asedtwoaut omobi l
esforexecuti
veuse.Thel easere qui
res
Babsontomakefiveannualpa yment sof₱13,000be ginningJanuary1,20x7.Att heendoft he
l
easet er
m,Babs on guar anteesther esi
dualvalueoft heautomobileswilltotal₱10,000.The
i
nterestr
atei
mplici
tint hel easei
s9%.Babs on'
srec orde
dl ea
seli
abili
tyoninit
ialrec
ognitionis
a.48,
620 b.44,070 c.35,620 d.31,
070

39.OnJanuary1,20x1,ABC Co.e
nter
sint
oa4-yearleas
eofoffic eequipment.There
nti n20x1i
s
₱10,
000andshallinc
reas
eby10% annual
lyst
arti
ngonJanuar
y1,20x2.Rent
alsarepayabl
ea t
 Page |8

t
heendofeac hyear.ABC Co.pa ysthelessoral
easebonusof₱5,
000onJanuar
y1,20x1.ABC
Co.optst
ousethepracti
calexpediental
lowedunderPFRS16forl
eas
esofl
ow val
ueass
ets.How
muc hist
hel
easeexpensein20x1?
a.10,
000 b.11,
000 c.11,
603 d.
12,853

Usethefo
ll
owingi
nformati
onfort
henextt
hre
eques
tio
ns:
OnJ anuary1,20x1,Entit
yY l e
asesoutanequipmentt
oEnt
it
yX.I
nfor
mat
ionont
hel
easeisas
f
oll
ows :
Leaseter
m 3years
Annualrentpayableattheendofeachyear 100,000
Inte
restr
atei
mpl i
citi
nthelease 10%

Thel
easeprovidesf
orthet
ransf
erofowners
hipoft
heequi
pmentt
othel
ess
eeatt
heendoft
hel
eas
e
t
erm.Therele
vantpres
entval
uefact
orisasf
oll
ows:

40.How muc hist

hegr
ossi
nves
tmentonJ
anuar
y1,
20x1?
a. 500,
000
b. 400,
000
c. 300,
000
d. 200,
000

41.How muc hist

hene
tinve
stme
ntonJ
anuar
y1,
20x1?
a. 238,
664
b. 242,
883
c. 248,
685
d. 252,
086

42.How muchist
heune
arne
dint
ere
stonJ
anuar
y1,
20x1?
a. 51,
315
b. 52,
313
c. 48,
992
d. 47,
652

43.Ift
hecurrenttaxexpensei
sles
sthant
hei
ncomet axexpe ns
edur i
ngt
heper
iod,
the
remus
tbea
a.def
err
edt axbenefit c.i
ncomet axpa yabl
e
b.def
err
edt axexpense d.prepai
dinc omet ax

44.Traderec
eivableshaveac arr
ying amountofP4,000.Therela
ted r
evenuehasal
ready bee
n
incl
udedintaxableprofit(t
axloss
). How muc
histhetaxbas
eoftheasset
?
a.4,
000 b.
2,400 c. 1,
600 d.0

45.Divi
dendsr
ecei
vabl
efrom as
ubsi
diaryha veacar
ryi
ngamountofP4,
000.Thedi
videndsar
enot
t
axable
.How muchisthet
axbas
eoft heasset
?
a.4,
000 b.2,
400 c.1,600 d.
0

46.Currentl
iabil
it
iesi
ncludeaccruedfine sandpenal
ti
eswithac ar
ryi
ngamountofP4,000.Fi
nes
andpenalti
esarenotdeducti
blefort
axpurpos
es.How muc
hi st
hetaxbas
eofthel
iabi
li
ty?
a.4,
000 b.
2,400 c.
1,600 d.0
 Page |9

47.A l
oanpa yablehasacarr
yingamountofP4,000.Therepa
ymentoft
hel
oanwi
llha
venot
ax
c
ons equences.How muchisthet
axbas
eoftheliabil
it
y?
a
.4,000 b.2,
400 c
.1,
600 d.0
 P a g e | 10

Usethef
oll
owingi
nfor
mat
ionf
ort
henextf
ourq
uest
ions
:
Take
nf r
om therecor
dsofABCCo.asofDecember31,
20x1i
sthef
oll
owi
ngi
nfor
mat
ion:
Car
ryi
ngamount Taxbas
e Di
ffe
renc
e
Compute
rsof
twa
rec
ost 500,000 - 500,
000
Machi
nery 1
,000,000 6
00,
000 400,
000
Ac
crue
dli
abi
li
ty-he
alt
hcar
e 200,000 - 200,
000

Addi
ti
o nali
nfo r
ma t
ion:
 Softwaredeve l
opme ntcostsaftertechnologicalfeasi
bilit
ywases tabl
ished werecapit
ali
zedfor
financ ialr eporti
ng.Thecostswer erecognizedasout rightdeduc
tionsfortaxpurposes
.
 Str
ai ghtlineme thodisusedindepr eciat
ingthemac hi
ne rywhilesum-of-t
he-year
s’di
gitsmethod
isus edfort axpur poses
.
 He althcar ebenefit sareaccruedasi ncurredbutar et axdeductibl
eonlywhe ncashisactual
ly
paid.
 Pretaxpr ofitf or20x1is₱1,000,000.Incomet axrateis30%.
 The rewe renot emporarydiffer encesasofJ anuary1, 20x1.

48.How muc hist

hedef
err
edt
axl
iabi
li
tyonDec
ember31,
20x1?
a. 400,
000
b. 900,
000
c. 320,
000
d. 270,
000

49.How muc hist

hedef
err
edt
axas
setonDe
cember31,
20x1?
a. 270,
000
b. 120,
000
c. 90,
000
d. 60,
000

50.How muc hist

hedefer
redt
axe
xpens
e/benefiti
n20x1?
a. 210,
000expens
e
b. 210,
000benefit
c. 270,
000expens
e
d. 270,
000benefit

51.How muc hist

hec
urr
entt
axe
xpe
nsei
n20x1?
a. 300,
000
b. 160,
000
c. 90,
000
d. 64,
000

52.ABC Co.i sdetermini

ngt heamountofi t
spretaxaccount
inginc
omef ortheyearbymaking
adjust
me nttotaxabl
eincomefrom thecompany'syear-
endinc
omet axretur
n.Thetaxret
urn
indic
atestaxabl
eincomeof₱100,000,onwhi c
hat axl i
abi
li
tyof₱30,000hasbeenrec
ogni
zed
(₱100,000x30% =₱30,000).
Addit
ionali
nformat
ionisshownbel
ow:

Goodwi llimpairme ntlossnotincl

udedasade ducti
oni
n
thet axr e
tur nbutma ybede duc t
edforfinanc i
al
repor t
ing. 3
5,000
Interestincomeons avingsandt i
mede posi
tswith
priva t
eba nks 6
,000
Reve nuesf rom ins
tall
me ntsale
sa rer
ecognizedas
goodsar es ol
dbuta retaxedonlywhe ninsta
llment
 P a g e | 11

payme ntsarecoll
ected. 40,
000
Excessofde preci
ati
onr ecognizedforfinanc ialre
porti
ng
overdepr e
c i
ati
onr ecognizedfortaxa
tionpurpos esdue
toshorte
rde precia
tionpe ri
odus edforfinanc i
al 1
0,000
report
ing
Badde btexpe ns
er ec
ogni zedusingthea l
lowance
me t
hod 15,
000

How muchist
hepr
etaxi
ncome
?
a. 115,
000
b. 100,
000
c. 96,
000
d. 86,
000

53.Legalcapi
t alist
hepor ti
onofc ont
ributedc apit
althatc
annotbedi st
ributedtotheownersduring
thelif
eti
meoft hec orporati
onunl es
st hec orporat
ionisdissolvedandal lofi t
sli
abi
lit
iesare
set
tl
edfir st
.Forno- parvalueshares,legalcapi
tali
s
a.t heaggr egat
eparval ueofsharesis
s uedands ubscr
ibed.
b. thetotalcons i
derationrecei
vedorr eceivabl
efrom shar
esissuedors ubsc
ribed.
c.t heaggr egat
es ta
tedval ueofsharesissuedands ubscri
bed.
d. theaggr egat
emar ketvalueofsharesi s
suedands ubscr
ibed.

54.Whichofthefol
lowingisnotoneofthebasi
cs harehol
dersright
s?
a. Theri
ghttopartic
ipat
einearni
ngs.
b. Theri
ghttomai nt
ainone'
sproporti
onalinter
estinthecorpora
tion.
c. Theri
ghttopartic
ipat
eintheproceedsofthes al
eofc or
porat
eas set
suponl
iqui
dat
ionoft
he
cor
porat
ion.
d. Theri
ghttoinspectt
heaccount
ingrecordsofthec or
porati
on.

55.OnFebr uary1,authorizedor
dinar
yshar
ewass ol
donas ubsc
ripti
onbasi
satapri
cei
nexces
sof
parvalue,and20per c
entofthesubs
cri
pti
onpr i
cewascoll
ected.OnMa y1,t
heremai
ning80
per
centofthes ubs
c ri
ptionpr
icewasc
oll
ect
ed.
Shar epr
emium wouldinc
reas
eon
February1 May1
a. No Yes
b. No No
c. Ye s No
d. Ye s Yes

56.Theentrytorecor
dtheiss
uanceofordinaryshare
sforfullypai
dsharesubsc
ript
ionsis
a. amemor andum ent
ry.
b. Dr.
CommonSt ockSubsc
ribed;Cr.
CommonSt oc Cr
k; .Additi
onalPai
d-I
nCapi t
al
c. Dr.Subsc
ribedShar
eCapital;Cr
.Subscri
pti
onsReceivabl
e
d. Dr.
Subs c
ribedShar
eCapital;Cr
.ShareCapit
al

57.Theiss
uanceofsharesofpreferr
eds t
oc kt
os har
eholder
s
a.increas
e spr
efer
redstockoutstanding.
b. hasnoe ffectonpreferr
e dstockoutst
anding.
c.increas
esprefer
redstockauthorized.
d. decr
easespref
err
eds t
ockaut horized.

58.Whichoft
hefol
lowingisanappropri
atepres
ent
ati
onoftrea
sur
yst
ock?
a. Asamarket
ablesecuri
ty
b. Asadeduct
ionatcostfr
om t
otals
tockhol
der
s'equi
ty
 P a g e | 12

c. Asadeduc
tiona
tcos
tfrom t
otalc
ontinge
ntli
abil
it
ies
d. Asadeduc
tiona
tparfr
om tot
alstoc
kholder
s'equi
ty

59.Gai
nsandlosse
sont hepur chaseandr esal
eoftrea
sur
ystockma
yber
efle
ctedonl
yin
a.sharepremium acc
ount .
b. s
harepremium andretainede arni
ngsaccounts
.
c.income,pai
d-i
nc apit
al,andr etai
ningearni
ngsacc
ounts
.
d. i
ncomeandpaid-incapitalaccounts.

60.Thes t
ockholders
'equit
ys ec
tionofPete
rCorpor a
tion'
sbalances
hee
tatDe
cember31,20X2,was
asfol
lows:
Ordinaryshares(₱10parvalue,aut
hori
zed1,000,
000
shares,i
ssuedandoutstanding900,
000shar
e ) ₱ 9,
s 000,
000
Sharepremium 2,
700,
000
Retai
nedear ni
ngs 1,
300,
000

On January 2,20X3,Peterpurchas
ed and r et
ired 100,
000 shar
esofit
sst
ockfor ₱1,
800,
000.
I
mmedi ate
lyaf t
err
eti
rementoft
hese100,
000s har
es,thebalanc
esinthes
har
epr
emium andr
etai
ned
ear
ningsaccountss
houldbe
Sharepremium Re
tainedearnings
a.₱ 900,000 ₱1,300,
000
b.₱1,
400,000 ₱ 800,000
c.₱1,
900,000 ₱1,300,
000
d.₱2,
400,000 ₱ 800,000

61.AspCo.wasorgani
zedonJanuary2,20x1,with30,
000authori
zeds esof₱10paror
har dinar
y
shar
es.
Duri
ng20x1thec
orporat
ionhadthefol
lowingcapi
talt
ransac
tions
:

J
an.5 Is
sued20,000sharsat₱15pers
e hare.
J
uly14 Purchas
ed5,000sharesat₱17pershare.
Dec.
27 Reis
suedthe5,000shareshe
ldintreas yat₱20pers
ur har
e.

Asp used thec

ostmethod t
or ecor
dthepurchaseand r
eis
suanceofthetr
easur
yshare
s.Inits
December31,20x1,bal
anc
esheet,whatamountshoul
dAs prepor
tassharepre
mium i
nex c
essof
par
?
a.100,
000
b.125,
000
c.140,
000
d.115,
000

62.In20x0,Ne wtCor p.acqui r

ed6, 000s haresofi tsown ₱1parvalueordi
narys hareat₱18per
share.In20x1,Newti s
sued3, 000oft heses haresat₱25pershar
e.Newtusesthec os
tmethodto
accountf orit
st r
easurys tockt r
ansactions.Wha taccount
sandamountsshouldNe wtcredi
tin
20x1tor ecordtheissuanceoft he3,000s hares?
Tre
asurys h. Sh. premium Re tainede ar
nings Ordi
narysh.
a.₱54,000 ₱21,000
b.₱54,000 ₱21,000
c. ₱72,000 ₱3,
000
d. ₱51,000 ₱21,000 ₱3,
000

63.OnDe c
ember1,20x1,LineCor
p.r
ece
ivedadonat
ionof2,000sharesofi
ts₱5parval
ueordi
nary
shar
esfr
om ashareholder
.Ontha
tdate,t
hest
ock’smarketvaluewas₱35pe rshar
e.Thest
ock
 P a g e | 13

wasor i
ginal
lyiss or₱25pers
ued f har
e.By wha
tamountwoul
dthi
sdona
tion c
aus
etot
al
stockholders
’equi
tyt
odecr
eas
e?
a.70,000
b. 50,
000
c.20,000
d. 0

64.Anent erpri
s ehasmadeal lnec
essar
yadj ust
ingentr
iesandi
snow c
los
ingit
sacc
ountsf
orthe
peri
od.Di videndsof₱30, 000werede cl
aredanddist
ribut
eddur
ingt
heyear
.Theent
rytocl
ose
thedividendsac countwouldbe
a. Retainedear nings 30,000
Di vidends 30,
000
b. Dividends 30,000
Ret ainedear
nings 30,
000
c.I ncomes ummar y 30,
000
Di vidends 30,
000
d. Dividends 30,000
Inc omes ummar y 30,
000

65.Nes
tCo.iss
ued100,000sharesofc ommons toc
k( i
.e.
,ordi
naryshares)
.Ofthe
se,5,
000wer
eheld
ast
reas
urystockatDecember31,20x1. During20x2,trans
act
ionsinvol
vingNest
'sc
ommons t
ock
wer
easfol
lows :
 Ma y3-1,000shar
esoft r
easurys t
oc kweresold.
 August6-10,000sharesofpreviouslyunissuedstockwer
es ol
d.
 November18-a2- for
-1stocksplittookeffe ct.

LawsinNe s
t'
sstat
eofi ncorpor
ati
onprot
ectt
reas
urys
toc
kf r
om di
lut
ion.
AtDe
cember31,
20x2,how
manys haresofNest'scommons tockwer
eiss
uedandouts
tandi
ng?
Shar
esIssue
d Out s
tandi
ng
a. 220,000 212,000
b. 220,000 216,000
c. 222,
000 214,000
d.222,000 218,000

66.AtDe c
ember31,20x0and20x1,Car rCorp.hadoutst
anding4,
000s esof₱100parval
har ue6%
cumul ati
vepreferred s
toc
kand 20,000s haresof₱10parvaluec ommon stock(i
.e
.,or di
nar
y
shares).AtDec e
mber31,20x0,dividendsinar r
ear
sont hepref
err
eds tockwere₱12,000.Cas
h
dividendsdeclaredin20x1tot
ald₱44,
e 000.Ofthe₱44,
000,whatamount swerepa
yableone ac
h
classofstoc
k?
Pref
e re
nceshares Ordi
narys hares
a.₱44,000 ₱ 0
b. ₱36,
000 ₱ 8,000
c.₱32,000 ₱12,000
d. ₱24,
000 ₱20,000

67.ArpCorp.’
soutstandingc api
talst
ockatDecember15,20x1,
cons
ist
edoft
hefol
lowing:
 30,000,5% cumul ati
vepr ef
erenceshar
es ue₱10pe
,parval rshar
e,ful
lypart
ici
pati
ngast
o
di
vidends.Nodi videndswer einar
rear
s.
 200,000ordi
nar yshares,parvalue₱1pershare
.

OnDe cember15,20x1,Arpdec
lareddi dendsof₱100,
vi 000.Wha
twast
heamountofdi
vidends
pa
yabletoAr p’
sor
dinarys
toc
kholder
s?
a
.10,000
 P a g e | 14

b.34,
000
c.40,
000
d.47,
500

68.Thefollowingstockdivi
dendswe
redeclar
edanddistr
ibutedbySolCor
p.:
Per
centageofor
dinar
yshare
s
out
standingatdec
lar
ati
ondate Fairval
ue Pa rvalue
10 ₱15,
000 ₱10,000
28 40,
000 30,800

Whataggregat
eamounts
houl
dbede
bit
edt
oret
aine
dear
ningsf
ort
hes
est
ockdi
vidends
?
a.40,
800
b.45,800
c.50,
000
d.55,000

69.RayCor p.dec
lare
da5% s toc
kdi videndoni ts10,
000iss
ue dandoutst
andi ngs har
e sof₱2par
valuec ommon s t
ock,whi ch had afairvalueof₱5pers harebef
oret hes t
ockdi vidend was
declared.Thi
sstockdivi
de ndwasdi st
r i
but
ed60da ysaft
erthedecl
arat
ionda te.Bywhatamount
didRa y’scur
rentli
abi
lit
iesincreas
easar esultoft
hestoc
kdi vi
denddeclarat
ion?
a.0
b.500
c.1,000
d.2,500

70.A share-
basedpayme nttr
ansact
ionisonei nwhic
hanent i
tyrecei
vesgoodsorservi
cesandpays
forthe
m
a. byi s
suingit
sownequi tyins
trume nts
.
b. throughcash,buttheamounti sbasedonthefai
rval
ueoft heent
ity’
sequit
yinst
ruments.
c. eit
he raorb,asachoicegive
nt oeithe
rtheent
ityort
hes uppli
erofthegoodsorservi
ces
d. anyoft hes
e

71.Whichoft hefollowi
ngisexcl
udedfrom t
hescopeofPFRS2?
a. Empl oyeeshareopti
onplans
b. Empl oyeeshareapprec
iat
ionri
ghts
c. Purcha seofgoodsf
rom anunrel
atedpart
yinexchangef
oranent
it
y’sownshar
esofs
toc
ks
d. Transferofequit
yinst
rumentsasconsi
derat
ionf
orabusine
ssc
ombinati
on

72.OnFe br
uar y1,20x1,Ent ityA offer ed it
se mpl oye
esshareopt i
onss ubj
ecttot
heoffe rbeing
rat
ified i nt hes har
eholders
’gener almee t
ing.Thes hare opti
on offe rwasappr ove
di nt he
shareholders
’gener almeetingheldonMar ch1,20x1.Entit
yA i s
suedt heshar
eopti
onsonApr il
1,20x1.Thef airvalueoftheshareopt i
onsvar ybetweentheseda t
es.Forpurpose
sofPFRS2, t
he
shareoptionss houldbevalueda tthefairval
uedet ermine
don
a. Fe br
uary1, 20x1. c.April1,20x1.
b. Mar ch1, 20x1. d.anyofthe se

73.OnJ anuary1,20x4,Ent i
tyA hasgranted600s hareopt i
onstoeachofits100empl oyees.The
opti
onsve sti
nt hreeyear s
’time.Eachs hareoption hasaf ai
rvalueof₱100on gr antdate
.
Inf
orma t
ionone mployeedepartur
eisasfollows:
• J anuary1,20x4:est
imateofemployeesleavi
ngtheentityduri
ngthevest
ingperiod–4%
• De c
ember31, 20x4:r
evisi
onofesti
ma teofemployeesleavi
ngto5% bef
oreves
tingda te
• De c
ember31, 20x5:r
evisi
onofesti
ma teofemployeesleavi
ngto6% bef
oreves
tingda te
 P a g e | 15

• De
cember31,
20x6:
act
ualempl
oyee
sle
avi
ng5%

How muc
hi sthesal
ari
esexpe
nsei
n20x5?
a. 2,
000,000
b. 1,
900,000
c. 1,
860,000
d. 1,
840,000

Usethefo
ll
owinginf
ormat
ionf
orthenextt
woq ue
sti
ons
:
OnJ anuary1,20x1,Ent
ityA grant
s100s har
eoptionst
oe achofi
ts100keyempl
oyeesc
ondi
ti
onal
upone achemployeeremaini
ngi nEntityA’semployoverthenext3years
.Thef
airval
ueofeac
h
shar
eopt i
onis₱15.

Ont hebasi
sofawei ghtedaverageprobabi
li
ty,Enti
tyA est
imate
sonJanuar
y1,20x1thatabout20
employees(i
.e
.,20% or20outoft he100empl oyee
s)willlea
vedur
ingthethr
ee-yearper
iod and
t
herefor
eforf
eitt
heirri
ghtst
ot heshareopti
ons.

During20x1,7empl oyee
slef
t.Ent
it
yA r
evi
sesi
tse
sti
mat
etoat
otalof25% e
mpl
oyeede
par
tur
e
overtheves
tingper
iod.

During20x2,9empl oyee
slef
t.Ent
it
yA r
evi
sesi
tse
sti
mat
etoat
otalof28% e
mpl
oyeede
par
tur
e
overtheves
tingper
iod.

During20x3,8empl
oyee
slef
t.The
ref
ore
,theac
tualempl
oyeede
par
tur
eovert
hepas
tthr
eeyear
sis
24% [(
7+9+8)÷100].

74.How muchist
hes
alar
iese
xpens
ein20x2?
a. 33,
700
b. 37,
500
c. 34,
500
d. 42,
000

75.How muchist
hes
alar
iese
xpens
ein20x3?
a. 33,
700
b. 37,
500
c. 34,
500
d. 42,
000

Usethefo
ll
owinginf
ormat
ionfo
rthene
xtt
woq ue
sti
ons
:
OnJ anuary1,20x1,Enti
tyA grant
s1,000shar
eapprec
iat
ionri
ght
s(SARs)toe
mploye
eswitht
he
condit
ionthattheemployeesremai
nins e
rvi
cewithi
nthenext3ye
ars.I
nfor
mati
onontheS
ARsis
shownbe l
ow:

Dat
e No.
ofSARsexpec
tedt
ove
st Fai
rval
ueofeac
hSAR
Ja
n.1.20
x1 1,
000 10
Dec
.31
,20x1 900 12
Dec
.31
,20x2 800 15
Dec
.31
,20x3 750 16

76.How muchi
sthes
alar
iese
xpens
ein20x3?
a. 3,
700
b. 4,
500
c. 4,
000
 P a g e | 16

d. 4,
400

77.How muchi
stheac
crue
dsal
ari
espa
yabl
eonDe
cember31,
20x2?
a. 4,
400
b. 7,
500
c. 8,
000
d. 8,
400

Usethefo
ll
owingi
nfo
rmat
ionfo
rthene
xtt
hre
eques
tio
ns:
Caroli
neCo.’
sequit
yst
ructur
eatDecember31,
20x1iss
hownbe
low:

10% Pr efe
r ences h.,₱100par(l
iqui
dat
i ue₱120pe
onval rshar
e) 1,000,000
Ordi narys hares,₱100par 3,000,000
Subs cri
beds harec apit
al-ordi
narys hares 100,000
Subs cri
ptionr eceivable (60,000)
Retainedear nings 900,000
Treasur yshar es(atc ost
)-2,
000or di
nar yshares. (260,000)
Tot
a lshare
ho l
de rs
'e quit
y 4,
680,000

78.Theprefer
enc
eshar
esarecumulat
i .Di
ve videndsar
einar
rear
sfort
hreeyear
s.How muc
hist
he
bookvaluepe
rordi
nar
ys har
e?
a. 150
b. 111.
72
c. 112.
37
d. 141.
38

79.Theprefer
enceshare
sarenoncumulat
i .Di
ve videndsar
einar
rear
sfort
hreeye
ars
.How muc
his
thebookvalueperordi
nar
ys har
e?
a. 118.
62
b. 112.
62
c. 98.
87
d. 122.
39

80.Thepref e
renc
eshare
sarecumulat
ive
.Alldi
videndsar
epai
dupt
oendoft
hec
urr
entyear
.How
muchi sthebookval
ueperordi
naryshar
e?
a. 120.00
b. 119.82
c. 118.62
d. 122.07

81.Thes
har
ehol
der
s'e
qui
tyofABCCons
truc
tion,
Inc
.onDe
cember31,
20x1i
ncl
ude
sthef
oll
owi
ng:

8% Pr efe
renceshares ,20,000shares
,₱100parvalue 3,
000,
000
10% Pr efe
renceshare s,10,000share
s,₱300parvalue 4,
500,
000
Ordi naryshares
, 50,000s har ,₱100parval
es ue 7,
500,
000
Shar epremium ine xce ssofpar 2,
250,
000
Retainedear ni
ngs 3,
350,
000
Tot
a lshare
hol
ders'equity 20,
600,
000

The8% stockiscumulat
iveand ful
ly par
tici
pati
ng.The10% s
toc
kisnonc
umul
ati
veand f
ull
y
par
tic
ipat
ing.
Divi
dendshavenotyetbee
npai dfor3year
s.
 P a g e | 17

How muchist
hebookval
ueperor
dinar
yshar
e?
a. 192.
30
b. 200.
30
c. 202.
30
d. 205.
30

82.Thecomputat
ionofe
arni
ngspers
har
eisaddr
ess
edby
a. PAS36
b. PFRS3
c. PAS33
d. PFRS11

83.Entit
yA had 100,
000,₱10par,10% cumul
ati
vepreferences hare
sout s
tandi
ngallthr
oughout
20x1. EntityA repor
tedprofitaft
ert
axof₱2,800,000fortheyearendedDec
e mber31,
20x1.
Themovementsinthenumberofordinar
yshar
esareasf oll
ows :
1/1/2
0x1 Ordi
narys har
esout s
tanding 120,
000
3/1/2
0x1 Shar
esiss
ue dforcash 42,
000
9
/30/20x1 Subsc
ribedshares 20,
000
1
1/1/20x1 Reac
quisi
tionoftreasuryshares (12,
000)
Outs
tandi
ngs h
aresa
tt hee
ndo fp
erio
d 170,
000

Whati
sthebas
ice
arni
ngspers
har
e?
a. 18.
92
b. 17.
09
c. 18.
07
d. 16.
98

84.Ent
it
yA hadt
hef
oll
owi
ngi
nst
rume
ntsout
standi
ngal
lthr
oughout20x1:

12% convertiblebondspayabl eiss

uedatfaceamount,
each
₱1,000bondi sconver
tibleinto30ordi
naryshar
es ₱2,000,
000
Ordinarys har es
,₱10par,100,000shar
esiss
uedand
outstandi ng 1,
000,000

Pr
ofitf
ort
heye
ari
s₱800,
000.
Ent
it
yA’
sinc
omet
axr
atei
s30%.

Wha
tisthedi
lut
ede
arni
ngspershar
ein20x1?
a. 6.
28 b.
6.05 c
.6.
15 d.
5.98

85.PAS33isintendedtoappl ytowhi
choft
hef
oll
owi
ng?
a. Publi
cly-
list
edentiti
es
b. Non-publicl
ylist
edentit
ies
c. Fi
nancialinst
it
utions
d. Allent
iti
esus i
ngt hePFRSs

86.Which ofthe f
oll
owi
ng doesnotr esul
tto aretros
pec
tive adj
ust
mentofpr
ior
-per
iod EPS
inf
ormati
on?
a.s har
edivi
dends c.i
ssuanc
eofshar
esforcash
b. shar
espli
t d.i
ssuanceofs
toc
kright
s

87.Ear
ningspershar
eisnotrequir
edtobecomputedon
a. profitorlos
sfrom c
ontinuingoper
ati
ons
.
 P a g e | 18

b. resul
tsofdi
sconti
nuedoperati
ons
.
c. profitorlossfortheyear
.
d. othercompr
ehensiveinc
ome .

88.Enti
tyA i sc omputing f
orit
s bas
ice
arnings pe
rshar
e and has ga
the
red t
he f
oll
owi
ng
i
nformati
on:
Lossf
ortheye ar (1,
000,
000)
Pre
ferr
eddi vi
dends 50,
000
Outst
andingor di
nar
yshar
es 100,
000

Ther
ehavebeennochangesinthenumberofouts
tandi
ngor
dinar
ysharesdur
ingt
heper
iod.Wha
t
i
sthebasi
cear
nings(
loss
)pershar
e?
a
.- 10.
50 b.10.
50 c
.-9.
50 d.9.50

89.Enti
tyA had200,000ordinar
ys haresouts
tandingallthroughout20x1.I
n20x2,t
hef
oll
owi
ng
shar
eis
suancesoccur
red:
 OnApr il1,20,
000shareswereis
s uedf
orcash.
 OnSept ember30,a10% bonusissue(s
haredividend)wasdeclar
ed.
 OnNovembe r1,a2-f
or-1shar
espl i
twasiss
ued.

Enti
tyA hadthef
ollowingprofit s
:₱2,200,000i
n20x2and₱1,
800,
000in20x1.Wha
tar
ethee
arni
ngs
pershar
etobedis
closedinEntit
yA’s20x2c omparat
ivefinanc
ials
tat
ements
?
20x2 20x1
a. 4.
22 4.
02
b. 4.
37 4.
07
c. 4.
65 4.
09
d. 4.
78 4.
12

90.EntityA has200, 000ordinarys haresouts

tandi
ngonJ anuary1,20x1.Entit
yA offer sright
siss
ue
toitsexisti
ngs harehol
derst hatenablethemtoacquire1ordi
narys hareatasubscri
pti
onpr i
ceof
₱120f oreve r
y5r ight
she ld.Ther ight
sar eex
erci
sedonMa y1,20x1.Themar ketpri
ceofone
ordinarys harei mmedi ately beforeexerci
seis ₱180.Entit
yA r eport
ed profitaf tertax of
₱2,900,000in20x1. Whatist hebas i
cearni
ngspersharein20x1?
a. 12.58 b.12.67 c.11.
92 d.17.
67