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1. On January 1, 2013, Abigail Company issued a 5-year 10% bonds wit!5,000,000 "a#e $alue and interest are payable semi-annually starting June30. e e&e#ti$e rate be"ore bond issue #ost is 12% and e&e#ti$e rate a"terbond issue #ost is 13%. Abigail Company ele#ts to use te e&e#ti$e interesto" amorti'ation "or te bonds. On (e#ember 31, 201), wat is teunamorti'ed portion o" te bond issue #ost* +use ) de#imal pla#es o" present

$alue "a#torsa. !323,50b. !102,/5#. !33,250d. P117,575

2. ian#a Company re#ei$ed a go$ernment grant related to a depre#iable asseton January 1, 200 in te amount o" !50,000. is grant was dedu#ted "romte #apital #ost o" te asset pur#ased at a total amount o" !),500,000a#uired on te same date wit a use"ul li"e o" 10 years and no residual$alue. On January 1, 2013, te entire !1,000,000 be#ame payable due tobrea# o" #ontra#t by ian#a Company. at is te depre#iation e4pense totat sould be re#ogni'ed "or (e#ember 31, 2013*

a. !1,200,000b. !1,125,000c. P825,000d. !)50,000

3. Casmere Company and its subsidiaries own te "ollowing properties tat area##ounted "or in a##ordan#e wit !A )067and eld "or undetermined use !5,000,000A $a#ant land to be leased out under 8nan#e lease 3,000,000!roperty eld by real estate subsidiary in te ordinary #ourse

o" business

2,000,000

!roperty eld "or use in produ#tion ),000,000uilding owned by subsidiary o" wi# se#urity and

maintenan#e is pro$ided to lessees 1,500,000

7and leased to subsidiary under operating lease 2,500,000!roperty under #onstru#tion "or use as in$estment property ,000,0007and eld "or "uture "a#tory site 3,500,0009a#inery leased out under operating lease 1,000,000at is te total in$estment property tat sould be reported in te#onsolidated statement o" 8nan#ial position o" Casmere Company*

a. !15,500,000b. P12,000,000#. !10,500,000d. !/,500,000

). (iane Company in#urred te "ollowing e4penses relating to an intangibleasset being produ#ed6:uipment a#uired solely "or te intangible asset !/5,000(epre#iation o" te euipment 135,0009aterial used 200,000Compensation #ost o" personnel 500,000Outside #onsulting "ees 150,000;ndire#t #ost allo#ated 250,0007egal #ost to 8le intangible asset produ#ed 100,000at total resear# and de$elopment #ost sould be re#ogni'ed as e4pense"or te #urrent year*

a. !2,15,000

b. P2,075,000#. !1,235,000d. !1,05,000

5. On January 1, 2013, :ini Company granted its 10 employees 5,000 sareappre#iation rigts "or ea# employee "or past ser$i#es. e rigts aree4er#isable immediately and e4pire on (e#ember 31, 201). e employeese4er#ised all te rigts on (e#ember 31, 201) and are entitled to re#ei$e#as in e4#ess o" mar

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date. e marowe$er, te new interest rate is 13%payable annually e$ery (e#ember 31. at is te gain on e4tinguisment o"debt to be re#ogni'ed "or 2013*

a. !1,000,000b. !505,500#. !350,000d. P0

. ;n #omputing "or its net in#ome "or ta4 purposes, te "ollowing data werepro$ided by ?erlyn Company6

Carrying amount a4 baseA##ounts re#ei$able !1,500,000 !1,50,000:uipment 1,50,000 1,250,000!ro$ision "or warranty 120,000 0(eposit re#ei$ed in

ad$an#e

150,000 0

e depre#iation rates "or a##ounting and ta4ation are 15% and 25%respe#ti$ely. e deposits are ta4able only wen re#ei$ed and warranty #ostsare dedu#tible wen paid. An allowan#e "or doubt"ul debts o" !250,000 asbeen raised against a##ounts re#ei$able "or a##ounting purposes but su#debts are only dedu#tible wen pro$en wortless. at amount sould?erlyn Company report as de"erred ta4 asset on (e#ember 31, 2013,assuming tat te ta4 rate is 30%*

a. P156,000b. !120,000#. !1,000d. !3,000

. >oney Company pur#ased a li"e insuran#e poli#y "or te li"e o" its presidentwit its "amily as te bene8#iary o" te poli#y. e poli#y is dated January 1,2010 wit a poli#y $alue o" !2,000,000 and te annual premium "or te poli#yis !0,000. e #as surrender $alue "or 2012 and 2013 are !15,000 and!1/,000 respe#ti$ely. e entity "ollows a #alendar year as a##ounting period.

e president died on O#tober 1,2013 and te poli#y is settled on (e#ember31, 2013. at amount sould >oney Company report as gain on li"einsuran#e settlement in its 2013 in#ome statement*

a. !2,000,000b. !1,/2,000#. !1,/2,000d. P0

/. ;ra Company dis#loses supplemental operating segment in"ormation. e"ollowing in"ormation is a$ailable "or te #urrent year6egment ales ra#eable e4pensesuper !5,000,000 !3,000,000

@ltra ),000,000 2,500,0009ega 3,000,000 1,500,000Additional e4penses, not in#luded abo$e, are as "ollows6;ndire#t e4penses !2,000,000?eneral #orporate e4penses 1,000,000;nterest e4pense 500,000;n#ome ta4 e4pense )00,000

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e interest e4pense and in#ome ta4 e4pense are regularly re$iewed by te#ie" operating de#ision ma

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2013, were in#urred e$enly during te year. e entity ad te "ollowingloans outstanding at (e#ember 31, 20136

10% note to 8nan#e spe#i8#ally "or te #onstru#tion o" te new

building "a#ility, dated January 1, 2013, !10,000,000. ile stillunused, te amount o" te loan was in$ested and earned !100,000in#ome. Eemains unpaid as o" (e#ember 31, 2013.

12% 20-year bonds issued at "a#e $alue on April 30, 2012,

!30,000,000.

% 5-year note payable, dated 9ar# 1, 2012, !10,000,000.

at amount o" interest sould be #apitali'ed as #ost o" te new building "orte year 2013*

a. !1,550,000b. !1,500,000c. P1,450,000d. !1,)00,000

1).Forlianne Company as a erd o" 100 2-year old animals on January 1, 2013.10 animals aged 2.5-year were pur#ased on July 1, 2013 "or !10,00 ea#

and 10 animals were born on July 1, 2013. Fo animals were sold or disposedo" during te year. e "air $alues less #ost to sell per unit were62-year old animal on January 1, 10,0002.5-year old animal on July 1 10,00Few born animal on July 1 ,0002-year old animal on (e#ember 31 10,5002.5-year old animal on (e#ember 31 11,100Fewborn animal on (e#ember 31 ,2003-year old animal on (e#ember 31 12,0000.5-year old animal on (e#ember 31 ,000at is te gain "rom #ange in "air $alue tat sould be reported "or 2013*

a. !0

b. !55,000#. !23,000d. P292,000

15.Orrianie Company uses retail in$entory metod to appro4imate its endingin$entory. e "ollowing in"ormation about its in$entory are pro$ided below6

Cost Eetail;n$entory, eg. !50,000 !1,200,000!ur#ases /,000,000 1),00,000=reigt in 200,000!ur#ase returns 300,000 500,000!ur#ase allowan#es 150,000(epartmental trans"ers 200,000 300,000

Fet mar

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:4#luded "rom te pysi#al #ount were goods billed to a #ustomer, =O

sipping point, on (e#ember 31, 2013. e goods ad a #ost o"!200,000 and ad been billed at !350,000. e sipment is ready "orpi#

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#. !)20,500d. P424,800

20.risia Company borrowed !5,000,000 "rom a ban< at a $ariable rate o"interest "or ) years on January 1, 2013. ;nterest is payable annually to teban< e$ery (e#ember 31 and te prin#ipal is due on (e#ember 31, 201.@nder te agreement, te mar

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patent. (uring 2013, te #ompany paid !1,000,000 in legal #ost "orsu##ess"ully de"ending patent A and !1,200,000 o" legal #ost "or patent "orwi# was unsu##ess"ully de"ended. On April 1, 2013 te entity paid!00,000, o" wi# 5% was "or a trademar< and 25% was "or te entityagreement wit a #ompetitor not to #ompete "or 5 year period in line wit tetrademaral" o" te in$entorywere sold during 2013. (uring 2013, te in$estee reported net in#ome o"!),000,000 and paid a !1,500,000 #as di$idend. e in$estment as a

re#orded amount o" !5,)00,000 on (e#ember 31, 2013. at is te pur#asepri#e o" te in$estment in asso#iate on January 1, 2013*

a. !5,100,000b. P5,000,000#. !),/00,000d. !),00,000

25.uri Company is a di$ersi8ed entity wit nationwide interests in #ommer#ialreal estate de$elopment, banowe$er,in te se#ond uarter, a design "ault was "ound and warranty #laims weree4pe#ted to be 10% "or te wole year. ales "or te 8rst uarter was!10,000,000 and !15,000,000 "or te se#ond uarter. at would be tepro$ision #arged in te se#ond uarters interim 8nan#ial statements*

a. !50,000b. !1,250,000#. !1,500,000d. P2,000,000

2.e 8nan#ial tatements o" Andrei Company were autori'ed "or issue on9ar# 31, 201) and te end o" te reporting period is (e#ember 31, 2013.

e "ollowing transa#tions in#urred a"ter te end o" te reporting period.

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On (e#ember 31, 2013, te entity ad an a##ount re#ei$able o"

!1,000,000 "rom a #ustomer and on =ebruary 1, 201), te re#ei$erappointed "or te #ustomer in"ormed te entity tat te !1,000,000would be paid in "ull on (e#ember 31, 201).

On (e#ember 31, 2013, te entity ad an a##ount re#ei$able o"

!3,000,000 "rom a #ustomer and on 9ar# 1, 201), te liuidator o"te #ustomer ad$ised te entity in writing tat te #ustomer wasinsol$ent and tat only 50% o" te a##ount would be #olle#ted on(e#ember 31, 201).

e entity reported a #ontingent liability on (e#ember 31, 2013 related

to a #ourt #ase. On mar# 15, 201), te Budge rendered a de#isionagainst te entity "or damages amounting to !2,000,000.

at amount sould be reported as adBusting e$ents on "or te year 2013*a. !,000,000b. !),500,000#. !),000,000d. P3,500,000

2.On January 1, 2013, ardy Company #lassi8ed one o" its non#urrent asset aseld "or sale wi# was pur#ased on January 3, 200/ at a #ost o" !5,000,000wit use"ul li"e o" 10 years. =air $alue o" te euipment on January 1, 2013 is!3,200,000 e4#luding #ost to sell o" !200,000. On (e#ember 31, 2013, "air$alue o" te euipment is !3,500,000 in#luding #ost to sell o" !500,000 andon te date te euipment was remo$ed "rom being eld "or sale. atsould be te $alue o" te euipment a"ter #easing to be eld "or sale on(e#ember 31, 2013*

a. P2,500,000b. !3,000,000#. !3,500,000d. !),000,000

2/.On January 1, 2013, Claude Company pur#ased 50,000 units o" goods at !20per unit. (uring te year, te entity sold )0,000 units at !3 per unit. eentity paid !1)0,000 "or operating e4penses. e #urrent repla#ement #ost o"te in$entory on (e#ember 31, 2013 is !30 per unit. On (e#ember 31, 2013,wat amount o" net in#ome under #urrent #ost a##ounting sould bereported*

a. !500,000b. P600,000#. !)0,000d. !)0,000

30.e "ollowing are ta

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#ompanies. e euipment as a residual $alue o" !3)0,000 and use"ul li"e o" years. :ri# #ompany pro$ides to pa#

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9ugs distributed )0,000 55,0009ugs to be distributed ne4t year 5,000 10,000at amount sould be reported as premium e4pense "or 201)*

a !2,50,000b !3,250,000c P3,000,000

d !3,50,00035.;on Company as te "ollowing in"ormation relating to its employee bene8t

plan "or 20136!roBe#ted bene8t obligation, January

1

!/,000,000

=air $alue o" plan assets, January 1 10,000,000!roBe#ted bene8t obligation,

(e#ember 31

10,000,000

=air $alue o" plan assets, (e#ember

31

15,000,000

@nre#ogni'ed net a#tuarial loss 1,500,000

!ast ser$i#e #ost !1,000,000(uring te #urrent year, te a#tuary determined te #urrent ser$i#e in teamount o" !2,500,000 and interest #ost o" 10%. e e4pe#ted and a#tualreturn on plan asset is 12%. e a$erage remaining ser$i#e period o" te#o$ered employees is 10 years. at is te bene8t e4pense "or 2013*

a.P2,350,000b. !2,250,000#. !1,50,000d. !1,50,000

3.Jonny Company in#urred te "ollowing #osts during te #urrent year 20136Option "ee "or land a#uired !10,000Option "ee "or land not a#uired 10,000

a4es in arrears on building on land 50,000!ayment "or land 1,000,000(emolition o" old building, in#luding o" sal$age $alue o"

!10,000

110,000

Ar#ite#t "ee 230,000!ayment to #ity all "or appro$al o" building #onstru#tion 120,000Contra#t pri#e "or "a#tory building 5,000,000a"ety "en#e around te #onstru#tion area 35,000a"ety inspe#tion on building 30,000Eemo$al o" sa"ety "en#e a"ter #ompletion o" building 20,000Few "en#e surrounding te "a#tory 0,000

(ri$eways and par

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e4pense!repaid

insuran#e

10,000 @nderstated

;n addition, on (e#ember 31, 2013, "ully depre#iated ma#inery was sold "or!10,00 #as, but te sale was not re#orded until 201). Fo #orre#tions a$ebeen made "or any o" te errors. at is te e&e#t o" te errors on worow sould te settlement o" te appre#iation rigts bea##ounted "or on (e#ember 31, 201*

a. !ayment o" !3,200,000 and no gain.b. !ayment o" !),00,000 and no gain.c. Payment of P3,200,000 and a gain of P1,600,000.

d. !ayment o" !),00,000 and a gain o" !3,200,000.)2.On June 30, 2013, te statement o" 8nan#ial position o" FaBib Company

#ontains te "ollowing in"ormation about its ma#ine6

9a#ine at #ost !5,000,000A##umulated depre#iation 1,500,000

e euipment was measured using te #ost model and depre#iation on astraigt line basis o$er a 10-year period. On (e#ember 31, 2013, temanagement de#ided to #ange te basis o" measuring te euipment "rom

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te #ost model to te re$aluation model. e euipment was re$alued to its"air $alue o" !),550,000 wit remaining use"ul li"e o" 5 years. at amountsould FaBib Company report as re$aluation surplus on (e#ember 31, 2013*

a !1,050,000b P1,300,000# !1,500,000

d !2,000,000)3.Oman Company sells euipment ser$i#e #ontra#t tat #o$er a 2-year period

and sales pri#e o" ea# #ontra#t is !500. e entitys past e4perien#e is te o"te total amount spent "or repairs on ser$i#e #ontra#ts, )0% is in#urrede$enly during te 8rst year and 0% e$enly on te se#ond year. :n#ouragedsold 2,000 #ontra#ts e$enly during 2013. ;n its (e#ember 31, 201) in#omestatement, wat amount sould be reported as earned re$enue "rom ser$i#e#ontra#ts*

a. !200,000b. P250,000#. !300,000d. !)00,000

)).!an8lo Company pur#ased an euipment on January 1, 200 "or !,000,000wit a use"ul li"e o" 10 years wit no residual $alue. e euipment isdepre#iated using te straigt line metod. ;n 2013, te managementde#ided to #ange te depre#iation metod "rom straigt line metod to150% de#lining balan#e metod. e estimate use"ul li"e remain un#angedbut te euipment was estimated to a$e a residual $alue o" !500,000. >owmu# is te a##umulated depre#iation to be presented in te statement o"8nan#ial position o" !an8lo Company "or (e#ember 31, 2013*

a. !5,250,000b. !5,02,500c. P4,550,000d. !),)00,000

)5.Guan Company pro$ided te "ollowing in"ormation relating to its 2013operation6A##ounts re#ei$able, beginning !),000,000A##ounts re#ei$able #olle#ted ,)00,000Cas sales 2,000,000;n$entory, beginning ),00,000;n$entory, ending ),)00,000!ur#ases ,000,000?ross margin on sales ),200,000at is te balan#e o" a##ounts re#ei$able on (e#ember 31, 2013*

a !,200,000

b P6,200,000# !),200,000d !2,000,000

).Eoger Company re#ei$ed "rom a #ustomer a 1-year note wit an annualinterest rate o" 10% on January 1, 2013 in te amount o" !1,000,000. (ue tosortage o" #as being e4perien#e by Eoger Company, te note wasdis#ounted witout re#ourse to E an< at a dis#ount rate o" 15% on 9ar# 31,2013. at is te loss on note re#ei$able dis#ounting*

a. !15,000b. !115,312.50#. !/0,000d. P48,750

).e sareolders euity se#tion o" ane Company "or (e#ember 31, 2013 ispro$ided612% !re"eren#e sare #apital, 20,000 sares, !100 par $alue !2,000,0001)% !re"eren#e sare #apital, 10,000 sares, !300 par $alue 3,000,000Ordinary sare #apital, 50,000 sares, !100 par $alue 5,000,000Eetained earnings 2,2)0,000are premium 1,500,000

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e 12% pre"eren#e sare is #umulati$e and "ully parti#ipating. e 1)%pre"eren#e sare is non#umulati$e and "ully parti#ipating. (i$idends a$e notbeen paid "or 3 years. at is te boo< $alue per ordinary sare*

a P132b !12# !112

d !100).On January 1, 2013, erry Company pur#ased 100,000 sares o" Company

entity "or !,200,000. On O#tober 1, 2013, te Company ga$e erryCompany 100,000 sto#< rigts, wi# entitles te older to a#uire one sare"or !50. e mar