Far Module 21 27

MODULE 21 EMPLOYEE BENEFITSMultiple Choice
Identify the choice that best completes the statement or answers the question.
1. Angel Company reported the fair value plan assets at 7,000,000 and projected benefit obligation at 8,000,000.
The entity revealed the following for the current year:
Current service cost 1,800,000
Past service cost 500,000
Discount rate 12%
Benefits paid to retirees 900,000
Contribution to the plan 1,300,000
Actual return on plan assets 650,000
What is the employee benefit expense?
a. 4,100,000 b. 1,920,000 c. 3,260,000 d. 2,420,000
Interest exp. On PBO (8,000,000*12%) 960,000
Interest expense on the EAC EAC, beg*DR 0
Interest income on PA PA, Beg*DR (840,000)
Settlement loss 0
Settlement gain 0
Pension expense (P or L) 2,420,000
2. On the year 2021, the records about the defined benefit plan showed the following:
Fair value of plan assets 6,000,000
Projected benefit obligation 7,250,000
During the current year, the following transactions are gathered:
Contribution to the plan 600,000
Actual return 750,000
Discount rate 12%
How much is the employee benefit expense?
a. 1,500,000 b. 1,670,000 c. 2,450,000 d. 1,350,000
Interest exp. On PBO PBO, 870,000
beg*DR
Interest income on PA PA, Beg*DR (720,000)
Settlement loss 0
Settlement gain 0
3. Ozz Ltd. reported the following values at the beginning of the year:
PBO, January 1, 2021 10,000,000
FVPA, January 1, 2021 7,500,000
During the year, Ozz Ltd. made a lump sum payment to a plan participant in exchange for their
rights to receive a certain post-employment benefit. The defined benefit obligation was Php
1,250,000 and the lump sum payment was Php1,000,000. In addition, the following were also
provided
Current Service Cost 1,125,000
Contribution to the fund 875,000
Actual Return on Plan Assets 1,000,000
Discount Rate 10%
What amount of employee benefit expense should be recorded?
a. 625,000 b. 875,000 c. 1,125,000 d. 1,375,000
Past service cost 0
Interest exp. On PBO PBO, beg*DR 1,000,000
Less: Interest income on PA PA, Beg*DR (750,000)
Settlement loss 0
Settlement gain 1,250,000- (250,000)
1,000,000
4. At the beginning of the current year, Ruru Company provided the following data in connection with a
defined benefit plan:

Following information for the current year:

Current Service cost 1,500,000
Discount rate 10%
Benefits paid to retirees 850,000
1. Determine the employee benefit expense for the current year

a. 1,955,000 b. 1,205,000 c. 1,555,000 d. 2,650,000
2. Determine the remeasurement at year-end

a. 45,000 gain b. 45,000 loss c. 155,000 gain d. 155,000 loss
beg*DR
Settlement loss 0
Settlement gain 0
Actual return on PA 650,000

Interest income on PA (695,000)
Remeasurement gain (loss) on (45,000)
PA
Projected benefit obligation
Actuarial gain 0
Actuarial loss 0
Effect on Asset Ceiling:
EAC, end XX
EAC, beg (XX)
Loss XX
Less: interest on EAC (XX) 0
Total remeasurement gain (loss) - OCI (45,000)
5. Carrie Company provided the following information regarding to the defined benefit plan for the current
year:
Past service cost 1,150,000
Interest expense on PBO 390,000
Interest income on plan assets 530,000
What is the total defined benefit cost?

a. 2,800,000 b. 2,970,000 c. 2,510,000 d. 2,790,000
beg*DR
Settlement loss 0
Settlement gain 0
PA
Pension Expense 2,510,000
Remeasurement (gain) loss 280,000
Defined benefit cost 2,790,000
6. The following data was given by Juan Co. about its Pension Plan during the year:
Current Service Cost 1,000,000

Actuarial Gain 400,000
Projected benefit obligation, January 1 6,000,000
Fair Value of Plan assets, Beg. 5,700,000
Actual return on Plan assets 200,000
Settlement rate 10%
What is the Defined Benefit Cost?

a. 2,950,000 b. 2,930,000 c. 2,900,000 d. 2,850,000 e. 1,760,000
What is the Interest Income?

a. 110,000 b. 600,000 c. 570,000 d. 550,000
What is the remeasurement gain/loss

a. 50,000 Loss b. 30,000 Gain c. 30,000 Loss d. 50,000 Gain
beg*DR
Settlement loss 0
Settlement gain 0
PA
PBO: Actuarial gain 400,000
Actuarial loss 0
Total Remeasurement gain (loss) 30,000
Remeasurement (gain) loss (30,000)
Defined benefit cost 1,760,000
7. At the beginning of 2018, Sakura Company had the following balances in the memorandum records with
respect to a defined benefit plan:
FV of plan assets 5,000,000

During the year, the accountant determined current service cost of 1,500,000. Discount rate of 10%, actual
return on plan asset is 700,000, entity contributed 1,200,500 at the end of the year
1. Determine the employee benefit expense for the current year

a. 1,500,000 b. 1,600,000 c. 2,700,500 d. 2,600,000
2. Determine the prepaid/accrued liability at year- end

a. 1,199,500 b. 1, 900,000 c. 1,899,500 d. 1,299,500
Past service cost 0
beg*DR
Settlement loss 0
Settlement gain 0
Plant Asset, beg 5,000,000
Add: Interest income on PA (500,000)
Remeasurement gain (loss) on 0
PA
Total 4,500,000
Loss: benefits paid 280,000
Plant asset, end 2,790,000
8. Lisa Company showed the following reports on the beginning of the year:
Defined benefit obligation 7,000,000
Discount rate 10%
Expected return 8%
What amount should be reported as net interest expense?

a. 700,000 b. 300,000 c. 400,000 d. 240,000
Interest Expense PBO, 700,000
beg*DR
Interest Income PA, beg*DR (300,000)
Net interest 400,000
expense
9. Peanut Company provided the following information pertaining to its defined benefit plan on December 31,
2020:
Fair value of plan asset 4,350,000

Asset ceiling 1,000,000
Expected return on pension fund 500,000
What is the effect on asset ceiling?
a. 1,000,000 b. 4,350,000 c. 1,500,000 d. 500,000
PA, end 4,350,000
PBO, end (2,350,000)
Prepaid pensions 2,000,000
cost/surplus
Less: Asset ceiling (1,000,000)
Effect on asset ceiling 1,000,000
10. Benson Company had a noncontributory defined benefit pension plan. The entity received the projected
benefit obligation report from the independent actuary at year-end.
Pension Fund 135,000

PBO December 31 2,160,000
Interest expense 120,000
Discount rate 8%
What is the projected benefit obligation on January 1?

a. 1,500,000 b. 2,160,000 c. 1,687,500 d. 1,987,200
What is the current service cost for the current year?

a. 675,000 b. 810,000 c. 540,000 d. 225,000
PBO, beg 1,500,000 120,000/8%
Current service 540,000
cost
Interest cost 120,000 (PBO,
beg*DR)
PBO, end 2,160,000
*Work back
11. On January 2, 2020, Edit corp. presented the fair value of the plan assets at 6,300,000 and Projected
benefit obligation was amounted to 6,125,000. During 2020, the company reported current service cost of
220,000 and actual return on Plan assets was 500,000. The settlement rate was discovered to be 9%.
On December 31, 2020, The Projected benefit obligation was 6,223,000.
1. What was the actuarial gain or loss on PBO during 2020?

a. 637,520 b. 673,520 c. 673,250 d. 637,250
2. Interest Income for the year was?

a. 675,000 b. 576,000 c. 567,000 d. 765,000
PBO, beg 6,125,000
Current Service Cost 220,000
Interest Expense 551,250
Actuarial (gain) loss 673,250
PBO, end 6,223,000
Interest Income (567,000)

6,300,000*9%
12. At the beginning of the year, Taylor Company reported fair value of plan assets at 5,000,000 and projected
benefit obligation of 4,950,000.
During the year, it was determined that the current service cost was 1,050,000, past service cost of 750,000
and discount rate is 11%. The actual return on plan asset was 750,000. Other information during the year
related to the benefit plan are as follows:
Benefits paid to the retirees 90,000
Decrease in projected benefit obligation 150,000
1. What amount should be reported as employee benefit expense?
a. 1,794,500 b. 1,800,500 c. 1,944,500 d. 1,956,400
2. What amount should be reported as total remeasurement gain?

a. 300,500 b. 350,000 c. 350,500 d. 355,000
Interest on PBO 544,500
Interest Income 550,000

Interest income (550,000)
Remeasurement gain on 200,000
PA
Decrease in PBO gain 150,000
Total remeasurement gain 350,000
13. LEAN Company recorded the fair value of plan assets at 7,400,000 at the beginning of the year. It was
determined that the market value of the pension plan at that time was 6,900,000. Other related events were
recorded by the company:
Pension benefits paid 800,000
Discount rate 8%
1. What is the fair value of plan assets at the end of the year?
a. 7,800,000 b. 7,850,000 c. 7,900,000 d. 7,950,000
2. What is the remeasurement on plan assets?

a. 98,000 gain b. 98,000 loss c. 108,000 gain d. 108,000 loss
Interest Income (592,000)
Remeasurement gain on 108,000
PA
PA, beg 7,400,000

Less: benefits paid (800,000)
PA, end 7,950,000
14. Zeus Co. has the following balances relating to defined benefit plan on December 31, 2020: Fair value of
plan assets 64,500,000, Projected benefit obligation 55,450,000 and Asset ceiling 3,500,000. What will be
the amount of the effect on asset ceiling?
a. 0 b. 9,050,000 c. 3,500,000 d. 5,550,000
PA, end 64,500,000
PBO, end (55,450,000)
Prepaid pensions 9,050,000
cost/surplus
Less: Asset ceiling (3,500,000)
Effect on asset ceiling 5,550,000
15. Kathnails Company is fast leading Corporation which renders beauty services to customers. On January 1,
2019, it showed a projected benefit obligation of 32,000,000 and a pension fund with a fair value of
10,200,000. In addition, a decrease on PBO of 2,800,000 is recorded. The entity provided the additional data
during the year:

Actual return on pension fund 1,000,000
Employer contribution 7,800,000
Benefits paid to retirees 8,500,000
Effect of asset ceiling 600,000
Discount rate 8%
Expected return on pension fund 10%
Q1. What is the pension expense for the current year?

a. 17,792,000 c. 16,816,000
b. 15,560,000 d. 16,048,000
Q2. What is the fair value of the pension fund on December 31?
a. 16,048,000 c. 10,500,000
b. 15,000,000 d. 18,500,000
Q3. What is the projected benefit obligation on December 31?

a. 39,260,000 c. 41,860,000
b. 34,000,000 d. 37,500,000
Q4. What is the remeasurement gain or loss on December 31?

a. 2,800,000 gain c. 2,948,000 loss
b. 2,984,000 gain d. 2,800,000 gain
Q5. What is the pension asset/liability on December 31?

a. 28,760,000 asset c. 28,760,000 liability
b. 39,260,000 asset d. 39,260,000 liability
Interest exp. On PBO PBO, beg*DR 2,560,000
Interest expense on the EAC, beg*DR 48,000
EAC 600,000*8%
Less: Interest income on PA, Beg*DR (816,000)
PA
Settlement loss 0
Settlement gain 0
Plant Asset, beg 10,200,000
Contribution 7,800,000
Actual Return 1,000,000
Less: benefits paid (8,500,000)
PA, end 10,500,000
PBO, bed 32,000,000
Interest expense on PBO 2,560,000
Less: decrease in BPO (2,800,000)
Benefits, settled (8,500,000)
PBO, end 39,260,000
Actual return on PA 1,000,000
Interest income 816,000
Remeasurement gain 184,000
(loss)
Actuarial gain (dec in PBO) 2,800,000
Total remeasurement gain 2,984,000
PBO, end 39,260,000
PA, end (10,500,000)
Accrued pension cost 28,760,000
MODULE 22 INTERIM FINANCIAL REPORTING

Multiple Choice
1. Farr Corporation had the following transactions during the quarter ended March 31, 2021.
Loss from typhoon 700,000
Payment of fire insurance premium for calendar year 2021 100,000
What amount should be included in the income statement for the quarter ended March 31, 2021?
Casualty loss Insurance expense
A 700,000 100,000
B 700,000 25,000
C 175,000 25,000
D 0 100,000
Insurance allocate (100,000/4) = 25,000
2. Harper Company incurred an apparently permanent inventory loss from market decline of P840,000 during
June 2021.
What amount of the inventory loss should be recognized in Harper’s quarterly income statement for the three
months ended June 30, 2021?
a. 210,000
b. 280,000
c. 420,000
d. 840,000
3. On June 30, 2021, Mill Company incurred a P1,000,000 net loss from disposal of a business segment. Also,
on June 30, 2021, Mill paid P400,000 for property taxes assessed for the calendar year 2021.
What amount of the foregoing items should be included in the determination of the net income or loss for the
six-month interim period ended June 30, 2021?
a. 1,400,000
b. 1,200,000
c. 900,000
a. 700,000
Loss from disposal 1,000,000
Property Tax (400,000/2) 200,000
Total 1,200,000
4. On March 15, 2021, Rex Company paid property taxes of P180,000 on its factory building for calendar year
2021. On April 1, 2021 Rex made P300,000 in unanticipated repairs to its plant equipment. The repairs will
benefit operations for the remainder of the calendar year.
What total amount of these expense should be included in Rex’s quarterly income statement for the three
months ended June 30, 2021?
a. 75,000
b. 145,000
c. 195,000
d. 345,000
Unanticipated repairs – Plant equipment (300,000/4) 100,000
Property Taxes (180,000/4) 45,000
Total 145,000
5. Vilo Company has estimated that total depreciation expense for the year ending December 31, 2021 will
amount to P600,000 and that 2021 year-end bonuses to employees will total P1,200,000.
In Vilo’s interim income statement for the six-month ended June 30, 2021, what total amount of expense
relating to these two items should be reported?
a. 1,800,000
b. 300,000
c. 900,000
d. 0
Depreciation Expenses (600,000/2) 300,000
Year-end bonuses (1,200,000/2) 600,000
Total 900,000
6. Kell Corporation’s P950,000 net income for the quarter ended September 30, 2021, included the following
after tax items:
A P600,000 expropriation gain, realized on April 30, 2021, was allocated equally to the second, third,
and fourth quarters of 2021.
A P160,000 cumulative-effect loss resulting from a change in inventory valuation method was
recognized on August 1, 2021.
In addition, Kell paid P480,000 on February 1, 2021, for 2021 calendar-year property taxes. Of this amount,
P120,000 was allocated to the third quarter of 2021.
For the quarter ended September 30, 2021, Kell should report net income of
a. 910,000
b. 1,030,000
c. 1,110,000
d. 1,150,000
Net income 950,000
Expropriation gain (600,000/3) (200,000)
Cumulative-effect loss 160,000
Net Income Sep. 30,2021 910,000
7. Moon Corporation reports quarterly to its stockholders. Condensed financial information is presented.
Selected information for the year 2021 is shown below.
Machinery repairs of 500,000 incurred in the first quarter are expected to benefit each quarter equally.
Advertising costs are allocated among the remaining quarters of the annual period, including the quarter in
which the costs are incurred on the basis of historical pattern of sales: 20%, 30%, 15%, and 35% in the first
through fourth quarters respectively. Advertising expense amounted to P600,000 and was incurred in the
second quarter.
How much of the expense should be reported for the second quarter?
a. 1,100,000
b. 325,000
c. 350,000
d. 600,000
Machine repairs (500,000/4) 125,000
Advertising expense (600,000/3) 200,000
Total expense 325,000
8. Kell Corp.’s 95,000 net income for the quarter ended September 30, 2020, included the following after-tax
items (SAME AS # 6)
A 60,000 extraordinary gain, realized on April 30, 2020, was allocated equally to the
second, third, and fourth quarters of 2020.
A 16,000 cumulative-effect loss resulting from a change in inventory valuation method
was recognized on August 2, 2020.
In addition, Kell paid 48,000 on February 1, 2020, for 2020 calendar-year property taxes. Of this amount,
12,000 was allocated to the third quarter of 2020.
For the quarter ended September 30, 2020, Kell should report net income of
a. 91,000
b. 103,000
c. 111,000
d. 115,000
Net income 95,000
Expropriation gain (60,000/3) (20,000)
Cumulative-effect loss 16,000
Net Income Sep. 30,2021 91,000
9. Vilo Corp. has estimated that total depreciation expense for the year ending December 31, 2020, will
amount to 60,000 and that 2020 year-end bonuses to employees will total 120,000. In Vilo’s interim income
statement for the six months ended June 30, 2020, what is the total amount of expense relating to these
two items that should be reported?
a. 0
b. 30,000
c. 90,000
d. 180,000
60,000/2 = 30,000 + 120,000/2 = 60,000
10. On June 30, 2020, Mill Corp. incurred a 100,000 net loss from disposal of a business segment. Also, on
June 30, 2020, Mill paid 40,000 for property taxes assessed for the calendar year 2020. What amount of
the foregoing items should be included in the determination of Mill’s net income or loss for the six-month
interim period ended June 30, 2020?
a. 140,000
b. 120,000
c. 90,000
d. 70,000
100,000+(40,000/2) = 120,000
MODULE 23 OPERATING SEGMENTS

Multiple Choice
1. Joseph Company and its division are engaged solely in manufacturing operations. The following data pertain
to the industries in which operations were conducted for the year ended December 31, 2021:
Segments Total Revenue Operating Profit Identifiable Assets

A 20,000,000,00 3,600,000,00 40,000,000,00
B 16,000,000,00 2,800,000,00 36,000,000,00
C 12,000,000,00 2,400,000,00 28,000,000,00
D 6,000,000,00 1,200,000,00 16,000,000,00
E 9,000,000,00 1,400,000,00 14,000,000,00
F 3,000,000,00 600,000,00 6,000,000,00
66,000,000,00 12,000,000,00 140,000,000,00
In its segment information for 2021, how many reportable segments does Joseph Company have?
a. three
b. four
c. five
d. six
66,000,000*10% =6,600,000
12,000,000*10% =1,200,000
140,000,000*10% =14,000,000
*Must be 10% of total to be qualified as reportable segment.
2. Operating profit and loss figures for the seven segments of Joseph Company are as follows:
Segments Amount
K P13,000,000
L 1,200,000
M 7,800,000
N ( 2,400,000 )
P ( 600,000)
Q ( 1,800,000)
What segments are reportable based on the operating profit or loss criterion?
a. segments k,l,m and p
b. segments k,m, and n
c. segments n,o, and q
d. none is reportable
Operating Profit Operating Loss
K. 13,000,000
L. 1,200,000
M 7,800,000
N. 2,400,000
P. 600,000
Q. 1,800,000
22,000,000 4,800,000
*To be reportable must be/ above 22,000,000*10% =2,200,000
3. The following information pertains to the Joseph Company and its divisions for the year ended December
31, 2021
Sales to unaffiliated customers 10,000,000

Inter-segment sales of product similar to those sold
Unaffiliated customers 2,000,000
Interest earned on loans to the other industry segments 400,000
Joseph Company and all of its divisions are engaged solely in the manufacturing operations.
Joseph has a reportable segment if that segment’s revenue is-

a. 500,000 b. 1,000,000 c. 1,040,000 d. 1,200,000
10,000,000+2,000,000 = 12,000,000
12,000,000*10% = 1,200,000
4. Joseph Company discloses supplemental industry segment information. The following information is
available for year 2021:
Segments Sales Traceable operating expenses
B 4,000,000 2,000,000
C 3,200,000 2,000,000
D 2,400,000 1,400,000
9,600,000 5,800,000
Additional expenses not included above are as follows:
Indirect operating expenses 1,440,000

General and administrative expenses 1,500,000
Appropriate common cost are allocated to segments based on the ratio of segments sales to total sales.
Segment D’s operating profit was

a. 400,000 b. 640,000 c. 1,000,000 d. 1,500,000
Sales 2,400,000
Less: Traceable common cost (1,400,000)
Allocated common cost (1,440,000*2.4/9.6) (360,000)
Operating profit 640,000
5. Joseph Company has three lines of business, each of which has determined to be reportable segment.
Joseph Company sales aggregated 15,000,000 in 2021 of which segment number 1 contributed 40%.
Traceable cost were 3,500,000 for September to November out of a total 10,000,000 for the company as a
whole. For internal reporting, Joseph allocates common cost of 3,000,000 based on the ratio of a segment’s
income before common cost.
In its 2021 financial statements, how much should Joseph report as operating profit for segment no.1?
a. 750,000 b. 1,000,000 c. 1,500,000 d. 2,000,000
Segment 1 Other Total
Segment
Sales 6,000,000 9,000,000 15,000,000
Less: Traceable common cost (3,500,000) (6,500,000) 10,000,000
Income 2,500,000 2,500,000
Less: Allocated common cost (3,000,000*50%) (1,500,000)
Operating profit 1,000,000
6. Joseph Company has three divisions, each of which has been determined to be reportable segment.
Common cost are appropriately allocated on the basis of its division’s sales in relation to Joseph’s aggregate
sales in 2021,segment 1 had sales of P6,000,000, which was 25% of the Joseph total sales and had
traceable operating cost of P3,800,000. In 2021, Joseph incurred operating cost of 1,000,000 that were not
directly traceable to any of the segments and incurred interest expense of 300,000 in 2021.
In reporting segment information, what amount should be shown as segment 1’s operating profit for 2021?
a. 1,500,000 b. 1,750,000 c. 1, 800,000 d. 1,950,000
Sales 6,000,000
Less: Traceable common cost (3,800,000)
Allocated common cost 1,000,000*.25 250,000
Operating profit 1,950,000
7. Joseph Corporation, a publicly owned Corporation, is subject to the requirements for segment reporting. In
its income statement for the year ended December 31,2021, Joseph reported revenues of P50,000,000
operating expenses of P47,000,000 and net income of P3,000,000, operating expenses included payroll
cost of P15,000,000 Joseph combined identifiable assets of all industry segments at December 31,2021 were
P40,000,000
In its 2021 financial statements, Joseph should disclose major customer data if sales to any single customer
amount to at least
a. 300,000 b. 1,500,000 c. 4,000,000 d. 5,000,000
50,000,000*10% =5,000,000
8. On September 30, 2021 when the carrying amount of the net assets of segment C was 7,000,000, X co.
signed a binding contract to sell segment C for 12,000,000. The sale is expected to be completed by January
31, 2022. In addition, prior to January 31, 2022, the sale contract obliges X Co. to terminate certain
employees of segment C incurring termination cost of 2,000,000 to be paid on June 30, 2022. The company
continued to operate segment C throughout 2021 revenue of segment C throughout 2021 was 8,000,000,
operating cost was 4,000,000.
How much income should be reported as income from ordinary activities of the discontinued segment for
2021, before tax?
a. 0 b. 2,000,000 c. 7,000,000 d. 8,000,000
9. The following information pertains to Aria Corp. and its operating segments for the year ended December
31, year 1:
Sales to unaffiliated customers 2,000,000 Intersegment sales of products similar to those sold to
unaffiliated customers 600,000 Interest earned on loans to other industry segments 40,000 Aria and all of
its divisions are engaged solely in manufacturing operations and evaluates divisional performance based
on controllable contribution. Aria has a reportable segment if that segment’s revenue exceeds
a. 264,000 b. 260,000 c. 204,000 d. 200,000
2,000,000+600,000=2,600,000
2,600,000*10% =260,000
10. Grum Corp., a publicly owned corporation, is subject to the requirements for segment reporting. In its
income statement for the year ended December 31, year 1, Grum reported revenues of 50,000,000,
operating expenses of 47,000,000, and net income of 3,000,000. Operating expenses include payroll costs
of 15,000,000. Grum’s combined identifiable assets of all industry segments at December 31, year 1, were
40,000,000. Reported revenues include 30,000,000 of sales to external customers.
Q1. In its year 1 financial statements, Grum should disclose major customer data if sales to any single
customer amount to at least
a. 300,000 b. 1,500,000 c. 4,000,000 d. 5,000,000
*50,000,000*10% = 5,000,000
Q2. External revenue reported by operating segments must be at least

a. 22,500,000 b. 15,000,000 c. 12,500,000 d. 37,500,000
*30,000,000*75% = 22,500,000
MODULE 24 Cash Basis to Accrual Basis of Accounting

Multiple Choice
1. Under the accrual basis, Tricia Company reported rental income for the current year at 600,000. The entity
provided the following additional information regarding rental income.
Unearned rental income - January 1 50,000

Unearned rental income - December 31 75,000
Accrued rental income - January 1 30,000
Accrued rental income - December 31 40,000
What total amount of cash was received from rental in the current year?
a. 585,000 b. 615,000 c. 625,000 d. 655,000
Rental Income (Earned) 600,000
Unearned rent, 1/1 -50,000
Unearned rent, 12/31 75,000
Accrued Rent, 1/1 -30,000
Accrued Rent, 12/31 -40,000
Rental Income (cash collected) 615,000
2. Kristine Company owns an office building and leases the offices under a variety of rental agreements
involving rent paid in advance monthly or annually. Not all tenants make timely payments of their rent.
Kristine’s balance sheet contained the following data:
2020 2021
Rentals receivable 960,000 1,240,000
Unearned rentals 3,200,000 2,400,000
During 2021, Kristine received 8,000,000 cash from tenants.
What amount of rental revenue should Kristine record for 2021?

a. 9,080,000 b. 8,520,000 c. 7,480,000 d. 6,920,000
8,000,000 Cash Collection
(960,000) Rent Rec, beg
1,240,000 Rent Rec, end
3,200,000 Rent Income,
beg
(2,400,000) Rent Income,
end
9,080,000 Earned
3. Kimberly, a consultant, keeps his accounting records on a cash basis. During 2019, Kimberly collected
P2,000,000 in fees from clients. At December 31, 2018, Kimberly had accounts receivable of P400,000. At
December 31, 2019, Kimberly had accounts receivable of P600,000 and unearned fees of P50,000.
On an accrual basis, what was Kimberly’s service revenue for 2019?

a. 1,750,000 b. 1,800,000 c. 2,150,000 d. 2,250,000
Revenue (CASH COLLECTED) 2,000,000
ACCOUNTS RECEIVABLE
BEG (400,000)
END 600,000
UNEARNED FEES
BEG 0
END 50,000
REVENUE (ACCRUAL-EARNED) 2,250,000
*Cash Basis to Accrual
4. Trishia Company experienced the following changes in selected accounts for the current year:
Accrual sales 5,000,000

Account receivable:
January 1 800,000
December 31 500,000
Advances from customers:
January 1 300,000
December 31 400,000
How much was received from customers during the year?

a. 5,400,000 b. 5,300,000 c. 4,800,000 d. 4,600,000
Sales 5,000,000
Account Receivable
Beg 800,000
End (500,000)
Advances from Customers
Beg (300,000)
End 400,000
Sales (cash-collection) 5,400,000
5. The following information pertains to Ozz Company’s sales:
Cash sales
Gross 2,000,000
Returns and allowances 100,000
Credit sales
Gross 3,000,000
Discounts 150,000
On January 1, 2021, customers owed Ozz P1,000,000. On December 31, 2021, customers owed Ozz
P750,000. Ozz uses direct write-off method for bad debts. No bad debts were recorded in 2021.
Under the cash basis of accounting, what amount of revenue should Ozz report for
2021?
a. 5,000,000 b. 4,750,000 c. 4,250,000 d. 1,900,000
Accounts Receivable
1,000,000
3,000,000 150,000
4,000,000 3,250,000
(3,250,000)
750,000
*1,900,000+3,100,000 = 5,000,000
6. During the current year, Angel Company reported total operating expenses of 3,200,000 consisting of
1,000,000 depreciation, 700,000 insurance and 1,500,000 salaries. The prepaid insurance is 150,000 on
January 1 and 200,000 on December 31. The accrued salaries payable totaled of 120,000 on January 1 and
100,000 on December 31.
What total amount was paid for operating expenses?

a. 3,270,000 b. 2,270,000 c. 2,130,000 d. 2,230,000
Total Operating Expense 3,200,000
Depreciation (1,000,000)
Prepaid Insurance
Beg (150,000)
End 200,000
Accrued Salaries payable
Beg 120,000
End (100,000)
2,270,000
7. The following balances were reported by Kimberly Company at December 31, 2021 and 2020:
12/31/2021 12/31/2020
Inventory 2,600,000 2,900,000
Accounts payable 750,000 500,000
Kimberly paid suppliers 4,900,000 during the year ended December 21, 2021.
What amount should Kimberly report for cost of goods sold in 2021?
a. 5,450,000 b. 4,950,000 c. 4,850,000 d. 4,350,000
Paid Suppliers 4,900,000
Inventory
Beg 2,900,000
End (2,600,000)
Accounts payable
Beg (500,000)
End 750,000
5,450,000
8. Cleo Company borrows money under various loan agreements involving notes discounted and notes
requiring interest payments at maturity. During the year ended December 31, 2021, Cleo paid interest totaling
100,000. Cleo’s December 31 balance sheets included the following information:
2020 2021
Prepaid interest 23,500 18,000
Interest payable 45,000 53,500
How much interest expense should Cleo report for 2021?

a. 86,000 b. 97,000 c. 103,000 d. 114,000
Cash paid for interest (cash) 100,000
Prepaid Interest
Beg 23,500
End (18,000)
Interest payable
Beg (45,000)
End 53,500
Interest expense (accrual-incurred) 114,000
9. Cleo Company acquires patent right from other enterprises and pays advance royalties in some cases, and
in others, royalties are paid within 90 days after year end. The following data are included in Cleo’s December
31 balance sheet:
2020 2021
Prepaid royalties 550,000 450,000
Royalties payable 800,000 750,000
During 2021, Cleo remitted royalties of 3,000,000.
In its income statement for the year ended December 31, 2021, Cleo should report royalty expense of
a. 2,950,000 b. 3,050,000 c. 3,100,000 d. 3,300,000
Royalties Paid 3,000,000
Prepaid Royalties
Beg 550,000
End (450,000)
Royalties payable
Beg (800,000)
End 750,000
Royalties expense (accrual-incurred) 3,050,000
10. Kelly Company maintains its accounting records on the cash basis but restates its financial statements to the
accrual method of accounting. Kelly had 6,000,000 in cash basis pretax income for 2021. The following
information pertains to the operations for the years ended December 31, 2021 and 2020.
2021 2020
Accounts receivable 4,000,000 2,000,000
Accounts payable 1,500,000 3,000,000
Under the accrual method, what amount of income before tax should Kelly report in its 2021 income
statement?
a. 2,500,000 b. 5,500,000 c. 6,500,000 d. 9,500,000
Revenue – assume 20,000,000
Expense – assume (14,000,000)
NI cash basis 6,000,000
Revenue – cash 20,000,000

Accounts Receivable
Beg (2,000,000)
End 4,000,000
Total 22,000,000
Expenses-cash 14,000,000
Accounts payable
Beg (3,000,000)
End 1,500,000
Total 12,500,000
Royalties expense (accrual-incurred) 9,500,000
11. The income statement of Arlene Corporation for 2019 included the following items:
Interest income P2,101,000

Salaries expense 1,650,000
Insurance expense 277,200
The following balances have been excerpted from Arlene Corporation's statements of financial position:
12/31/2018 12/31/2019
Accrued interest receivable P165,000 P200,200
Accrued salaries payable 92,400 195,800
Prepaid insurance 33,000 24,200
Based on the above and the result of your audit, determine the following:
1. The cash received for interest during 2019 was

a. 1,900,800 c. 2,065,800
b. 2,101,000 d. 2,136,200
2. The cash paid for salaries during 2019 was

a. 1,753,400 c. 1,546,600
b. 1,557,600 d. 1,845,800
3. The cash paid for insurance premiums during 2019 was

a. 253,000 c. 244,200
b. 286,000 d. 268,400
Interest Income 2,101,000
Interest Rec,
Beg 165,000
End 200,200
Interest income – cash collected 2,065,800
Salaries expense 1,650,000

Salaries payable
Beg 92,400
End 195,800
Salaries expense – cash paid 1,546,600
Insurance expense 277,200

Prepaid insurance
Beg 33,000
End 24,200
Insurance expense – cash paid 286,000
12. On January 1, 2021, the statement of financial position of Kristine Company showed total assets of 5,000,000,
total liabilities of 2,000,000 and contributed capital of 2,000,000. During the current year, the corporation
issued share capital of 500,000 par value at a premium of 300,000. Dividend of 250,000 was paid on
December 31, 2021. The statement of financial position on December 31, 2021 showed total assets of
7,500,000 and total liabilities of 3,200,000.
What was the net income for the current year?

a. 1,750,000 b. 1,000,000 c. 750,000 d. 500,000
BEG END
Total Assets 5,000,000 7,500,000
Total Liabilities 2,000,000 3,200,000
TOTAL EQUITY 3,000,000 4,300,00
CONTRIBUTED 2,000,000 2,800,000
CAPITAL
RE 1,000,000 1,500,000
RE, BEG 1,000,000

ADD: NI? 750,000
TOTAL 1,750,000
LESS: DIVIDENDS (250,000)
RE, END 1,500,000
13. The following changes in Kristine Company’s account balances occurred during the current year:
Increase
Assets 8,900,000
Liabilities 2,700,000
Share capital 6,000,000
Share premium 600,000
Except for a 1,300,000 dividend payment and the year’s earnings, there were no changes in retained earnings
for the year. What was Kristine’s net income for the current year?
a. 400,000 b. 900,000 c. 1,300,000 d. 1,700,000
ASSETS LIAB EQUITY
8,900,000 2,700,000 6,200,000
INC. ASSETS 8,900,000
INC. IN LIAB (2,700,000)
INC. EQUITY 6,200,000
INC. IN CC (6,600,000)
DEC. IN RE (400,000)
+NI? 900,000
-DIV (1,300,000)
DEC. IN RE (400,000)
14. An analysis of the records of Connie Company disclosed changes in account balances for 2021 and the
supplementary data listed below.
Cash 480,000 decrease

Accounts receivable 300,000 increase
Merchandise inventory 3,100,000 increase
Accounts payable 420,000 increase
During the year, Connie borrowed 4,000,000 in notes from the bank and paid off notes of 3,000,000
and interest of 240,000. Interest of 100,000 is accrued on December 31, 2021. There was no
interest payable at the end of 2020. In 2021, Connie transferred certain trading securities to the
business and these were sold for 1,500,000 to finance purchase of merchandise. Connie made
weekly withdrawals in 2021 of 10,000.
What was the net income for 2021?

a. 1,520,000 b. 1,920,000 c. 1,400,000 d. 420,000
DEC. IN CASH (480,000)
INC. IN AR 300,000
INC. IN INVENT. 3,100,000
NET INC. IN ASSET 2,920,000
INC. IN AP 420,000
INC. IN NP (4M-3M) 1,000,000
INC. IN INT. 100,000
PAYABLE
INC. IN LIAB 1,520,000
NET INC. IN EQUITY 1,400,000
WORK BACK
NI 420,000
ADDITIONAL INVTS 1,500,000
DRAWING (10,000*52) (520,000)
NET INC IN CAP 1,400,000
15. Presented below are changes in all the account balances of Connie Company for the current year, except
for retained earnings.
Increase
(Decrease)
Cash 790,000
Accounts receivable, net 240,000
Inventory 1,270,000
Investments (470,000)
Accounts payable (380,000)
Bonds payable 820,000
Share capital 1,250,000
Share premium 130,000
There were no entries in the retained earnings account except for net income and a dividend declaration of
190,000 which was paid in the current year. What was the net income for the current year?
a. 1,200,000 b. 1,190,000 c. 200,000 d. 10,000
INC. IN CASH 790,000
INC. IN AR 240,000
DEC. INVTESTMENT (470,000)
DEC. IN AP (380,000)
INC. IN BP 820,000
INC. IN LIAB 440,000
INC. IN CC (1.25+130) (1,380,000)
INC. IN RE 10,000
+NI 200,000
-DIV (190,000)
INC. IN RE 10,000
16. Presented below are changes in the accounts of Shawn Company for 2021.
Increase
(Decrease
Cash 1,500,000
Accounts receivable (net) 3,500,000
Inventory 3,900,000
Investments (1,000,000)
Equipment 3,000,000
Accounts payable (800,000)
Bonds payable 2,000,000
During 2021, Shawn sold 100,000 shares of its P20 par stock for P30 per share and received cash
in full. Dividend of 4,500,000 was paid in cash during the year. Shawn borrowed 4,000,000 from
the bank and made interest payment of 600,000. Shawn had no other loan payable. Interest of
400,000 was payable at December 31, 2021. Interest payable at December 31, 2020 was 100,000.
Equipment of 2,000,000 was donated by a shareholder during the year.
What was the net income for the year 2021?

a. 9,200,000 b. 4,800,000 c. 4,900,000 d. 4,300,000
INC. IN CASH 1,500,000
INC. IN AR 3,500,000
DEC. INVTESTMENT (1,000,000)
INC. EQUIP 3,000,000
DEC. IN AP (800,000)
INC. IN BP 2,000,000
INC. IN LP 4,000,000
INC. INT. PAY 300,000
INC. IN LIAB 5,5500,000
INC. IN CC (3+2) (5,000,000)
INC. IN RE 400,000
+NI 4,900,000
-DIV (4,500,000)
INC. IN RE 400,000
17. Following data are selected information for Shawn Company for the current year:
Cash balance, January 1 130,000

Accounts receivable, January 1 190,000
Collections from customers 2,100,000
Shareholders’ equity, January 1 380,000
Total assets, January 1 750,000
Total assets, December 31 880,000
Cash balance, December 31 160,000
Accounts receivable, December 31 360,000
Total liabilities, December 31 390,000
The net income for the current year is

a. 490,000 b. 150,000 c. 110,000 d. 70,000
ASSET LIAB EQUITY
BEG 750,000 380,000
END 880,000 390,000 490,000
110,000
+NI? 110,000
-DIV 0
INC. IN RE 110,000
18. Steven started a retail merchandise business on January 1, 2021. During the fiscal year ended December
31, 2021, he paid his trade creditors 2,000,000 in cash and suffered a net loss of 350,000. Among his ledger
account preclosing balances on December 31, 2021 were the following:
Accounts receivable 600,000

Accounts payable 750,000
Capital (total investment in cash) 2,000,000
Expenses (paid in cash) 100,000
Merchandise (unadjusted debit balance) 700,000
There were no withdrawals. All sales and purchases were on credit. The merchandise account is debited
for purchases and credited for sales.
The sales for 2021 amounted to

a. 2,750,000 b. 2,050,000 c. 2,650,000 d. 700,000
PURCH – DEB TO MI 2,750,000
SALES – CREDITED TO 2,050,000
MI?
MMI -UNADJUSTED 700,000
*WORKBACK
750,000+2,000,000=2,750,000
19. Ana & Associates maintains its records on the cash basis. You have been engaged to convert its cash basis
income statement to the accrual basis. The cash basis income statement, along with additional information,
follows:
Ana & Associates

Income Statement (Cash Basis)
For the Year Ended December 31, 2021
Cash receipts from customers P2,800,000

Cash payments:
Wages P1,200,000
Taxes 520,000
Insurance 320,000
Interest 200,000 2,240,000
Net profit P 560,000
Additional information:
12/31/2020 12/31/2021
Accounts receivable P240,000 P400,000
Wages payable 160,000 120,000
Taxes payable 152,000 112,000
Prepaid insurance 32,000 64,000
Accumulated depreciation 600,000 760,000
No plant assets were sold during 2021.
How much is the profit before income tax under the accrual basis of accounting?
a. 880,000 c. 720,000
b. 816,000 d. 656,000
Revenue 2,800,000
AR, beg (240,000)
AR, END 400,000
REV, ACCRUAL – 2,960,000 2,960,000
EARNED
WAGES, CASH – PAID 1,200,000

WAGES PAYABLE, BEG (160,000)
WAGES PAYABLE, END 120,000
ACCRUAL - INCURRED 1,160,000 (1,160,000)
TAXES PAID 520,000

TAXES PAYABLE
BEG (152,000)
END 112,000
480,000 (480,000)
INSURANCE PAID 320,000

PREPPAID INSURANCE
BEG 32,000
END (64,000)
288,000 (288,000)
ACCR. DEP, END 600,000
ACCR DEP, BEG (760,000)
DEP EXPENSE (160,000) (160,000)
INTEREST PAID 200,000

BEG (72,000)
END 24,000 (152,000)
NET PROFIT 720,000
20. We were given the following information which were obtained from the single-entry records of Angel:
January 1 June 30
Interest receivable P 12,000 P 9,600
Accounts receivable 540,000 1,056,000
Notes receivable 180,000 144,000
Merchandise inventory 456,000 120,000
Store and office equipment (net) 390,000 360,000
Prepaid operating expenses 30,000 26,400
Notes payable 120,000 144,000
Accrued operating expenses 32,400 60,000
An analysis of the cashbook shows the following:

Balance, January 1 P180,000
Receipts:
Interest income P 24,000
Notes receivable 180,000
Investment by Angel 72,000 708,000
888,000
Disbursements:
Interest expense P 18,000
Notes payable 96,000
Operating expenses 204,000 942,000
Balance, June 30 – bank overdraft (P 54,000)
Based on the above and the result of your audit, determine the following for the six months ended June 30,
2020:
1. Sales
a. 948,000 c. 1,092,000
b. 132,000 d. 1,164,000
2. Purchases
a. 624,000 c. 816,000
b. 576,000 d. 504,000
3. Operating expenses, excluding depreciation

a. 172,800 c. 228,000
b. 231,600 d. 235,200
4. Net loss
a. 4,800 c. 152,400
b. 132,000 d. 1,221,600
Receipts from AR 432,000 SALES 1,092,000
Receipts from NR 180,000 BI 456,000
AR, 1/1 (540,000) PURCH 624,000
AR, 6/30 1,056,000 AFS 1,080,000
NR, 1/1 (180,000) LESS: IE (120,000) (960,000)
NR, 6/30 144,000 GP 132,000
SALES – ACCRUAL 1,092,000 OPEX 235,200
30,000
PAYMENT – AP 624,000 (21,600)
NP 96,000 20,400 264,000
AP, 1/1 (420,000) NET LOSS 132,000
AP, 6/30 300,000
NP, 1/1 (120,000)
NP, 6/30 144,000
PURCHASES ACCRUAL 624,000
DISB FOR OPEX 204,000

30,000
(26,400)
(32,400)
60,000
235,200
MODULE 25 STATEMENT OF FINANCIAL POSITION

Multiple Choice
1. Angel Company provided the following account balances at year-end:
Accounts receivable 1,600,000

Financial assets at fair value through profit or loss 500,000
Financial assets at amortized cost 1,300,000
Cash 1,100,000
Inventory 3,000,000
Equipment and furniture 2,500,000
Accumulated Depreciation 1,500,000
Patent 400,000
Prepaid Expenses 100,000
Equipment held for sale 1,800,000
What total amount should be reported as current assets at year-end?

a. 8,100,000 b. 6,300,000 c. 8,000,000 d. 7,600,000
2. The following data pertains to Jerome Company on December 31, 2021:
Cash, including sinking fund of P500,000 with trustee 2,000,000
Notes receivable (P200,000 pledged) 1,200,000
Accounts receivable – unassigned 3,000,000
Accounts receivable – assigned 800,000
Notes receivable discounted(without recourse) 700,000
Equity of assignee in accounts receivable assigned 500,000
Inventory, including P600,000 cost of goods in transit purchased FOB
destination. The goods were received on January 3, 2022 2,800,000
Allowance for doubtful accounts 100,000
How much current assets should be shown in the balance sheet on December 31, 2021?
a. 7,900,000 b. 8,000,000 c. 7,400,000 d. 7,700,000
Cash (2,000,000 - 500,000) 1,500,000
NR ( 200,000 pledge) 1,200,000
NRD -700,000 500,000
AR - unassigned 3,000,000
AR - assigned 800,000
Inventory (2,800,000 - 600,000) 2,200,000
Allowance for doubtful accounts -100,000
Total current assets 7,900,000
3. At year-end, the current assets of Hazel Company revealed cash and cash equivalents of P700,000,
accounts receivable of P1,200,000 and inventories of P600,000. The examination of accounts receivable
disclosed the following:
Trade accounts 930,000

Allowance for doubtful accounts (20,000)
Claim against shipper for goods lost in transit 30,000
Selling price of unsold goods sent by Hazel
On consignment at 130% of cost and not
Included in ending inventory 260,000
Total accounts receivable 1,200,000
What total amount should be reported as current assets at year-end?

a. 2,412,000 b. 2,440,000 c. 2,240,000 d. 2,500,000
Cash & cash equivalent 700,000
Trade & other receivables( 1.2 - .260) 940,000
Inventory( 600,000 +(260,000/130%) 800,000
4. Kaila Company trial balance reflected the following account balances at December 31, 2021:
Trading securities 500,000
Accumulated depreciation on equipment and furniture 1,500,000
Cash 1,100,000
Inventory of merchandise 3,000,000
Equipment and furniture 2,500,000
Patent 400,000
Prepaid expenses 100,000
Land held for future business site 1,800,000
In Kaila Company’s December 31, 2021 balance sheet, the current assets total is
a. 8,100,000 b. 7,300,000 c. 6,700,000 d. 6,300,000
5. The following is Kaila Company’s June 30, 2021, trial balance:

Cash overdraft 100,000
Accounts receivable, net 350,000
Inventory 580,000
Land classified as “held for sale” 1,000,000
Property, plant and equipment, net 950,000
Accounts payable and accrued expenses 320,000
Common stock 250,000
Additional paid-in capital 1,500,000
Retained earnings 830,000
3,000,000 3,000,000
Checks amounting to 300,000 were written to vendors and recorded on June 29, 2021, resulting in cash
overdraft of 100,000. The checks were mailed on July 9, 2021. Land classified as held for sale was sold for
cash on July 15, 2021. Kaila issued its financial statements on July 31, 2021.
In its June 30, 2021 balance sheet, what amount should Kaila report as current assets?
a. 2,250,000 b. 2,050,000 c. 1,950,000 d. 1,250,000
Cash(300,000 - 100,000) 200,000
AR, net 350,000
Inventory 580,000
Land classified as "held for sale" 1,000,000
6. Presented below are account balances and related information on December 31, 2021 for Jerome Company:
Cash and cash equivalents 3,700,000
Allowance for doubtful accounts ( 200,000)
Inventory 2,000,000
Prepaid insurance 300,000
7,300,000
The cash and cash equivalents include the following:
Cash in bank, net of bank overdraft of 300,000
Maintained in a separate bank 1,000,000
Cash set aside by the Board of Directors for the
Purchase of a plant site 2,000,000
Petty cash 10,000
Cash withheld from wages for income tax of employees 190,000
General cash 500,000
3,700,000
========
Accounts receivable balance includes past due account in the amount of 100,000 on which a loss of
50% is anticipated. The account should be written off.
Merchandise inventory includes goods held on consignment amounting to 150,000 and goods of
200,000 purchased and received on December 31, 2021. Neither of these items have been recorded
as a purchase.
Prepaid-insurance includes cash surrender value of life insurance of 50,000.
The adjusted balance of current assets should be

a. 5,400,000 b. 5,100,000 c. 5,300,000 d. 5,200,000
Cash & cash equivalents(3.7+.3-2M) 2,000,000
AR (1.5 - .050) 1,450,000
Allowance(200 - 50) -150,000 1,300,000
Inventory(2M - .150) 1,850,000
Prepaid insurance(300 - 50) 250,000
Adjusted current assets 5,400,000
7. Jerome Company’s December 31, 2021 balance sheet reported the following current assets:
Cash 4,000,000
Inventory 4,000,000
Deferred tax asset 1,200,000
Equipment used and held for resale 300,000
17,000,000
An analysis of the accounts receivable disclosed the accounts receivable comprised the
following
Trade accounts receivable 5,000,000
Allowance for doubtful accounts (500,000)
Selling price of Jerome Company’s unsold goods sent to Tar Company
on consignment at 150% of cost and excluded from Jerome’s ending
inventory 3,000,000
7,500,000
At December 31, 2021, the total current assets should be
a. 16,000,000 b. 15,700,000 c. 14,500,000 d. 14,800,000
Cash 4,000,000
AR (7.5 - 3) 4,500,000
Inventory(4M +(3M/150%) 6,000,000
Equipment held for sale 300,000
8. The following trial balance of Jerome Company at December 31, 2021 has been adjusted except for income
tax expense:
Cash 2,000,000
Accounts receivable, net 20,000,000
Prepaid taxes 4,000,000
Inventory 12,000,000
Property, plant & equipment 35,000,000
Accounts payable 20,000,000
Common stock 30,000,000
Retained earnings 18,000,000
Foreign currency translation adjustment 5,000,000
Revenues 40,000,000
Expenses 30,000,000
108,000,000 108,000,000
During 2021, estimated tax payments of 4,000,000 were charged to prepaid taxes. Jerome has not yet
recorded income tax expense. The tax rate is 35%. Included in accounts receivable is 6,000,000 due from a
customer. Special terms granted to this customer require payment in equal semiannual installments of
1,000,000 every June 1 and December 1.
In the December 31, 2021 balance sheet, what amount should be reported as total current assets?
a. 34,500,000 b. 28,500,000 c. 35,500,000 d. 30,500,000
Cash 2,000,000
AR (20M-4M) 16,000,000
Prepaid taxes 500,000
Inventory 12,000,000
*6,000,000-2,000,000 = 4,000,000
4,000,000-3,500,000 (40M-30M*35%) = 500,000
9. An analysis of Joshtine Company’s liabilities disclosed the following
Accounts payable, after deducting debit balances

In suppliers’ accounts amounting to P100,000 4,400,000
Accrued expenses 1,500,000
Credit balances of customers’ accounts 500,000
Stock dividend payable 1,000,000
Claims for increase in wages and allowance by
Employees of the company, covered in a
pending lawsuit 400,000
Estimated expenses in redeeming prize coupons
Presented by customers 600,000
How much should be presented as total current liabilities on the balance sheet?
a. 6,700,000 b. 6,600,000 c. 7,100,000 d. 7,700,000
10. The trial balance of Joshtine Company reflected the following liability account balances at December 31,
2021:
Deferred tax liability 400,000
Dividends payable 500,000
Income tax payable 900,000
Note payable, due January 31, 2022 600,000
Discount on bonds payable 200,000
The deferred tax liability is based on temporary differences that will reverse equally in 2022 and 2023.
In Joshtine’s December 31, 2021 balance sheet, the current liabilities total was
a. 7,100,000 b. 4,300,000 c. 3,900,000 d. 4,100,000
11. The trial balance of Angel Company reflected the following liability account balances on December 31, 2021:
Bonds payable, due December 30, 2022 10,000,000
Premium on bonds payable 500,000
Deferred tax liability 2,500,000
Dividends payable 4,500,000
Income tax payable 1,500,000
Note payable – bank 4,000,000
The bank note payable matures on June 30, 2022. On March 1, 2022, the entire balance of the bank payable
was refinanced on a long-term basis. Angel’s financial statements were issued on March 31, 2022.
In its December 31, 2021, Angel Company should report current liabilities at
a. 21,500,000 b. 24,000,000 c. 25,500,000 d. 28,000,000
12. The following information about Manchester Company is available at December 31, 2021:
Employee income taxes withheld 900,000
Cash balance at first state Bank 2,500,000
Cash overdraft at Harbor Bank 1,300,000
Accounts receivable with credit balance 750,000
Estimated expenses of meeting warranties on merchandise previously sold 500,000
Estimated damages as a result of unsatisfactory performance on a contact

1,500,000
Accounts payable
3,000,000
Deferred serial bonds, issued at par and bearing interest at 12%, payable in
semiannual installments of P500,000 due April 1 and October 1 of each year,
the last bond to be paid on October 1, 2027. Interest is also paid
semiannually. 5,000,000*12%*3/12 = 150,000 5,000,000
Stock dividend payable 2,000,000
The December 31, 2021 balance sheet should report current liabilities at
a. 8,100,000 b. 7,950,000 c. 9,100,000 d. 7,350,000
13. Joshtine Company had the following liabilities at December 31, 2021:
Account payable 550,000
Unsecured note, 8%, due July 1, 2022 4,000,000
Accrued expenses 350,000
Contingent liability 450,000
Deferred tax liability 250,000
Senior bonds, 7%, due March 31, 2022 5,000,000
The contingent liability is an accrual for possible loss on a 1,000,000-lawsuit filed against Joshtine.
Joshtine’s legal counsel expects the suit to be settled in 2022 and has estimated that Joshtine will be liable
for damages in the amount of 450,000
The deferred tax liability is not related to an asset for financial reporting and is expected to reverse in 2022
What amount should Joshtine report in its December 31, 2021 balance sheet for current liabilities?
a. 10,350,000 b. 10,150,000 c. 9,900,000 d. 4,900,000
14. Tricia Company provided the following data at year-end:
Accounts payable, including cost of goods

Received on consignment of P150,000 1,350,000
Accrued taxes payable 125,000
Customers’ deposit 100,000
Tricia Company as guarantor 200,000
Bank overdraft 55,000
Accrued electric and power bills 60,000
Reserve for contingencies 150,000
What total amount should be reported as current liabilities?

a. 1,840,000 b. 1,740,000 c. 1,650,000 d. 1,540,000
15. The following information pertains to Kaila Company on December 31 of the current year:
Property, plant and equipment 35,000,000
Prepaid insurance 2,500,000
Short-term note payable 3,000,000
Cash 5,000,000
Total assets 101,500,000
Land 20,000,000
Allowance for doubtful accounts 1,000,000
Merchandise inventory 13,000,000
Available for sale securities – to be held indefinitely 7,000,000
Wages payable 2,000,000
Total liabilities 56,000,000
Premium on bonds payable 3,000,000
The December 31 working capital is

a. 46,500,000 b. 33,500,000 c. 26,500,000 d. 35,500,000
*WORKING CAPITAL = CA-CL
16. Rosalie Corporation is located in London but does business throughout Europe. The company builds and
sells equipment used in manufacturing pharmaceuticals. On December 31, 2021, Rosalie has trading
securities valued at 42,000; goodwill valued at 300,000; prepaid insurance valued at 24,000; patents valued
at 140,000; and a customer list valued at 260,000. On Rosalie Corporation’s statement of financial position
at December 31, 2021, what amount should be reported as intangible assets?
a. 742,000 b. 766,000 c. 700,000 d. 440,000
17. The accounts and balances shown below were taken from Kaila Company’s trial balance on December 31,
2021. All adjusting entries have been made.
Wages Payable, P250,000; Cash, P175,000; Bonds Payable, P600,000; Dividends Payable,
P140,000; Prepaid rent, P136,000; Inventory, P820,000; Sinking Fund Assets, P525,000; Trading
securities, P153,000; Premium on Bonds Payable, P48,000; Stock Investment in Subsidiary,
P1,020,000; Taxes Payable, P228,000; Accounts Payable, P248,000; Accounts Receivable,
P366,000; Property Plant & Equipment, P1,200,000; Patents- net, P150,000; Accumulated
Depreciation-PPE, P400,000; Land held for future business site, P900,000.
How much should be reported in Kaila’s December 31, 2021 balance sheet as current and non-current
assets, respectively?
a. 1,650,000 and 2,375,000
b. 1,650,000 and 3,395,000
c. 1,800,000 and 2,225,000
d. 1,800,000 and 3,795,000
18. Jostin Company’s adjusted trial balance at December 31, 2021 includes the following accounts balances:
Ordinary share capital, P3 par 3,000,000

Subscription Receivable due 2022 300,000
Share premium 4,000,000
Treasury shares, at cost 250,000
Net unrealized loss on available for sale securities 100,000
Reserve for uninsured earthquake losses 750,000
Accumulated profits 1,000,000
Ordinary shares subscribed 500,000
Reserve for treasury share 250,000
What amount should Jostin report as total owners’ equity in its December 31, 2021 balance sheet?
a. 8,400,000 b. 8,900,000 c. 9,150,000 d. 9,200,000
19. Facundo Corporation’s post-closing trial balance at December 31, 2021 was as follows:
Facundo Corporation
Post-Closing Trial Balance
December 31, 2021
Debit Credit
Accounts payable P 495,000
Accounts receivable P 963,000
Reserve for depreciation 360,000
Reserve for doubtful accounts 54,000
Premium on ordinary shares 1,800,000
Gain on sale of treasury shares 450,000
Bonds payable 720,000
Building and equipment 1,980,000
Cash 396,000
Dividends payable on preference shares 7,200
Ordinary share capital (P1 par value) 270,000
Inventories 1,116,000
Land 684,000
Available-for-sale securities at fair value 513,000
Trading securities at fair value 387,000
Net unrealized loss on available-for-sale
securities 45,000
Preference share capital (P50 par value) 900,000
Donated capital 800,000
Share warrants outstanding 208,000

Treasury shares – ordinary, at cost 324,000
Totals P6,480,000 P6,480,000
At December 31, 2021, Facundo had the following number of ordinary and preference shares:
Ordinary Preference
Authorized 900,000 90,000
Issued 270,000 18,000
Outstanding 252,000 18,000
The dividends on preference shares are P0.40 cumulative. In addition, the preference share has a preference
in liquidation of P50 per share.
Based on the above and the result of your audit, determine the following as of December 31, 2021:
1. Share premium/Additional paid-in capital

a. 3,213,000 b. 3,258,000 c. 3,050,000 d. 2,600,000
Premium on ordinary shares 1,800,000
Gain on sale of treasury shares(SP-TS) 450,000
Donated capital(SP-Donation) 800,000
Share warrants outstanding (SP-W) 208,000
Total share premium 3,258,000
2. Total contributed capital
a. 4,428,000 b. 4,220,000 c. 3,770,000 d. 1,170,000
PS 900,000
OS 270,000
SP 3,258,000
Total contributed capital 4,428,000
3. Unappropriated retained earnings
a. 415,800 b. 739,800 c. 91,800 d. 37,800
Total RE 415,800
Less appro. For TS -324,000
Unappropriated RE 91,800
4. Total equity
a. 4,266,800 b. 4,519,800 c. 4,888,800 d. 4,474,800
Total contributed capital 4,428,000
Total RE 415,800
Less: TS -324,000
Net unrealized loss on AFS -45,000
Total Equity 4,474,800
20. Tricia Industries provided the following balances on December 31, 2021
Accrued taxes 55,000
Ordinary share capital 7,700,000
Dividends – ordinary share 4,400,000
Dividends – preference share 1,600,000
Mortgage payable ( 500,000 due in 6 months) 6,000,000
Notes payable, due on January 14, 2023 2,300,000
Preference share capital 3,250,000
Premium on notes payable 125,000
Income summary – credit balance 9,090,000
Retained earnings – January 1 8,080,000
Unamortized issue cost on note payable 65,000
Unearned rent income 35,000
What is the amount of retained earnings for the year ended?

a. 2,080,000 b. 11,170,000 c. 17,170,000 d. 22,120,000
RE - 1/1 8,080,000
Add: NI (Credit bal. to IS) 9,090,000
Total 17,170,000
Less: Dividends- OS 4,400,000
Dividends - PS 1,600,000 -6,000,000
RE - 12/31 11,170,000
MODULE 26 COMPREHENSIVE INCOME
Multiple Choice
All answers shall be submitted on or before December 4, 2020 (Friday)
1. Presented below is information related to Watt Company in its first year of operation. The following
information is provided at December 31, 2021, the end of its first year.
Sales revenue 450,000
Cost of good sold 210,000
Selling and administrative expenses 75,000
Gain on sale of plant assets 45,000
Unrealized gain on available-for-sale financial assets 15,000
Financial costs 10,000
Loss on discontinued operations 20,000
Allocation to non-controlling interest 60,000
Dividends declared and paid 8,000
Compute the following (a) income from operations, (b) net income, (c) net income attributable to Watt
Company shareholders, (d) comprehensive income, and (e) retained earnings balance at December 31,
2021.
Sales 450,000
less cost of goods sold -210,000
Gross profit 240000
Selling and administrative expenses 75,000
Net income 330,000
Other income and expense:
less allocation to non-controlling interest -60,000
Gain on sale of plant assets 45,000
Net income attributable to shareholders 270,000
Income from operations 360,000
Financing cost -10,000
Retained earnings, beg 0
Income from continuing operations 350,000
Add: Net income 330,000
Discontinued operations:
Total 330,000
Loss on discontinued operations -20,000
less dividends -8,000
Net income 330,000
Retained earnings, 12/31/21 322,000
Other comprehensive income:
Unrealized gain on AFS financial assets 15,000
Total comprehensive Income 345,000
2. The records containing several transactions incurred by Forbes Corporation at December 31, 2021 showed
the following balances:
Bad debts expense 2,750,000

Freight out 4,000,000
Cost of sales 46,350,000
Loss on sale of equipment 2,000,000
Loss on early retirement of long-term debt 3,000,000
Sales 97,500,000
Interest income 4,850,000
Administrative expenses 11,250,000
Finished goods inventory, January 1 60,000,000
Sales commissions 6,000,000
Finished goods inventory, December 31 55,000,000
Income tax rate 30%
What amount shall Forbes Corporation shall report as its net income for the year 2021?
a. 56,000,000 b. 30,000,000 c. 21,000,000 d. 18,900,000
Sales 97,500,000
Less cost of sales -46,350,000
Gross income/profit 51,150,000
Operating expenses:
Uncollectible accounts expense -2,750,000
Freight out -4,000,000
Administrative expenses -11,250,000
Sales commissions -6,000,000
Other income and expenses: Loss on ret. Of LTD -3,000,000
Loss on sale of equipment -2,000,000
Income from operations 22,150,000
Interest income 4,850,000
Income from continuing operations before tax 27,000,000
Income tax (30%) -8,100,000
Net income 18,900,000
3. In year 1, Casio Company provided the following information:
Sales 50,000,000
Cost of goods sold 30,000,000
Distribution costs 5,000,000
General and Administrative expenses 4,000,000
Interest expense 2,000,000
Gain on early extinguishment of long-term debt 500,000
Correction of inventory error, net of income tax-credit 1,000,000
Investment income-equity method 3,000,000
Gain on expropriation 2,000,000
Income tax expense 5,000,000
Dividends declared 2,500,000
What is the income before income tax?

a. 9,500,000 b. 14,500,000 c. 15,500,000 d. 14,000,000
Sales 50,000,000
Less cost of goods sold -30,000,000
Gross profit 20,000,000
Distribution cost/selling expenses -5,000,000
General and administrative expenses -4,000,000
Other income and expenses:
Gain on early extinguishment of LTD 500,000
Investment income 3,000,000
Gain on expropriation 2,000,000
Income from operations 16,500,000
Finance charges -2,000,000
Income from continuing operations before taxes 14,500,000
4. Smile Co., an investment entity, provided the following income and expenses for the current year:
Dividend income from investments 1,520,000

Distribution income from trusts 200,000
Interest income on deposits 150,000
Income from bank treasury bills 80,000
Unrealized gain on derivative contract as cash flow hedge 400,000
Income from dealing in securities and derivatives held for trading 200,000
Write-down of securities and derivatives held for trading 70,000
Other income 170,000
Finance cost 300,000
Administrative staff costs 3,800,000
Sundry administrative costs 1,200,000
Income tax expense 1,700,000
What is the total income before tax?

a. 2,900,000 b. 2,250,000 c. 2,700,000 d. 2,500,000
Dividend income from investments 1,520,000
Distribution income from trust 200,000
Interest income on deposits 150,000
Income from bank treasury bills 80,000
Income from dealing in securities and derrivatives
held for trading 200,000
Write-down of securities and derrivatives held for trading -70,000 130,000
Other income 170,000
Total income 2,250,000
5. The following costs were incurred by Griff Co., a manufacturer, during year 1:
Accounting and legal fees 25,000 Freight-in 175,000 Freight-out 160,000 Officers salaries 150,000
Insurance 85,000 Sales representatives salaries 215,000 What amount of these costs should be reported
as general and administrative expenses for year 1?
a. 260,000 b. 550,000 c. 635,000 d. 810,000
6. Brock Corp. reports operating expenses in two categories: (1) selling, and (2) general and administrative.
The adjusted trial balance at December 31, year 1, included the following expense and loss accounts:
Accounting and legal fees 120,000 Advertising 150,000 Freight-out 80,000 Interest 70,000 Loss on sale of
long-term investment 30,000 Officers’ salaries 225,000 Rent for office space 220,000 Sales salaries and
commissions 140,000 One-half of the rented premises is occupied by the sales department.
Brock’s total selling expenses for year 1 are
a. 480,000 b. 400,000 c. 370,000 d. 360,000
7. Chase Corp. had the following infrequent transactions during 2021:

A 150,000 gain from selling its automotive division.
A 210,000 gain on the sale of investments.
A 70,000 loss on the write-down of inventories.
In its 2021 income statement, what amount should Chase report as other income and expense?
a. 80,000 b. 140,000 c. 290,000 d. 360,000
8. Ortiz Co. had the following account balances:

Sales 120,000
Cost of goods sold 60,000
Salary expense 10,000
Depreciation expense 20,000
Dividend revenue 4,000
Utilities expense 8,000
Rental revenue 20,000
Sales returns 11,000
Advertising expense 13,000
What amount would Ortiz report as other income and expense in its income statement?
a. 24,000 b. 12,000 c. 49,000 d. 10,000
9. James, Inc. incurred the following infrequent losses during 2021:

A 70,000-impairment loss on intangible assets.
A 40,000-litigation settlement.
A 60,000 write-off of obsolete inventory.
In its 2021 income statement, what amount should James report as other income and expense?
a. 170,000 b. 130,000 c. 110,000 d. 100,000
10. Use the following information:

Gross profit 7,800,000
Loss on sale of investments 20,000
Gain on sale of discontinued operations 60,000
Income tax rate 20%
Compute the amount of discontinued operations to be combined with income from continuing operations on
the income statement.
a. 60,000 b. 48,000 c. 12,000 d. 0
*48,000 = 60,000-(60,000*20%)
11. During 2021, Lopez Corporation disposed of Pine Division, a major component of its business. Lopez realized
a gain of 1,200,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were
1,400,000 in 2021. How should these facts be reported in Lopez's income statement for 2021?
Total Amount to be Included in
Income from Results of
Continuing Operations Discontinued Operations
a. 1,400,000 loss 1,200,000 gain
b. 200,000 loss 0
c. 0 200,000 loss
d. 1,200,000 gain 1,400,000 loss
12. Use the following information (in thousands):

Revenues 1,200,000
Net Income 135,000
Income from operations 330,000
Selling & administrative expenses 750,000
Income before income tax 300,000
Determine the amount of discontinued operations.

a. (30,000)
b. 120,000
c. 150,000
d. (15,000)
*(15,000) = 135,000-150,000
13. On November 1, year 2, management of Herron Corporation committed to a plan to dispose of Timms
Company, a major subsidiary. The disposal meets the requirements for classification as discontinued
operations. The carrying value of Timms Company was 8,000,000 and management estimated the fair
value less costs to sell to be 6,500,000. For year 2, Timms Company had a loss of 2,000,000. How much
should Herron Corporation present as loss from discontinued operations before the effect of taxes in its
income statement for year 2?
a. 0 b. 1,500,000 c. 2,000,000 d. 3,500,000
14. On September 30, 2020, when the carrying amount of the net assets of segment C was 7,000,000, X
Company signed a binding contract to sell segment C for 12,000,000. The sale is expected to be completed
by January 31, 2021, the sale contract obliges X Company to terminate certain employees of segment C
incurring termination costs of 2,000,000 to be paid on June 30, 2021. The company continued to operate
segment C throughout 2020. Revenue of segment C throughout 2020 was P 8,000,000, operating costs
was P4,000,000.
How much income should be reported as income from discontinued segment for 2020, before tax?
a. None b. 2,000,000 c. 7,000,000 d. 8,000,000
*8,000,000-4,000,000 = 4,000,000
(2,000,000)-4,000,000 = 2,000,000
15. On January 1, 2021, Zhang Inc. had cash and share capital of 5,000,000. At that date, the company had no
other asset, liability, or equity balances. On January 5, 2021, it purchased for cash 3,000,000 of equity
securities that it classified as available-for-sale. It received cash dividends of 400,000 during the year on
these securities. In addition, it has an unrealized loss on these securities of 300,000. The tax rate is 20%.
Compute the amount of comprehensive income.

a. 100,000 b. 80,000 c. 320,000 d. 300,000
*400,000-300,000 = 100,000
100,000-(100,000*20%) = 80,000
16. Korte Company reported the following information for 2021:

Cost of goods sold 350,000
Operating expenses 55,000
Unrealized holding gain on available-for-sale securities 20,000
Cash dividends received on the securities 2,000
For 2021, Korte would report comprehensive income of
a. 117,000 b. 115,000 c. 97,000 d. 20,000
Cost of sales -350,000
Gross profit 150,000
Operating expense -55,000
Other income and expense - dividends 2,000
OCI: Unrealized gain on AFS securities 20,000
Total comprehensive income 117,000
17. Nikki Company reported the following data for the current year:
Loss from impairment of plant assets 500,000
Correction of understatement of depreciation expense
in prior years, net of tax 800,000
Income omitted from last year’s financial statement 750,000
Loss on sale of one of Nikki’s warehouses 300,000
Unrealized gain on AFS 600,000
Dividends received 950,000
For the current year, Nikki would report other comprehensive income of
a. 300,000 b. 600,000 c. 1,550,000 d. 1,100,000
18. The accountant for Optic Co. has determined the following information for the year ended, December 31,
2021.
Profit or loss 300,000

Share of total comprehensive income after tax of associates 20,000
Share of profit (after tax) of associates 15,000
Exchange difference gain (net of tax of P3,000) on translation of
foreign operation up to the date sold (October 1, 2021) 7,000
Exchange difference gain (net of tax of P9,000) on disposal of
foreign operation recognized in profit for the year 21,000
Increase in asset revaluation surplus (net of tax) 45,000
What is the total amount of other comprehensive income for Optic Co. for the year ended, December 31,
2021?
a. 36,000 b. 57,000 c. 51,000 d. 72,000
19. The alphabetical list of items that may be relevant in the preparation of a statement of comprehensive income
of Kimberlie Corporation is provided below:
Actuarial gains on defined benefit pension plans

recognized outside profit or loss 1,333
Decrease in inventories of finished goods and work in
progress 107,900
Depreciation and amortization expense 17,000
Employee benefits expense 43,000
Exchange differences gain on translating foreign operations 10,667
Finance costs 18,000
Gains on property revaluation 3,367
Income tax expense 32,000
Income tax relating to components of other comprehensive
income 9,334
Loss for the year from discontinued operations 30,500
Other expenses 5,500
Other income 11,300
Raw material and consumables used 92,000
Revenue 355,000
Share of other comprehensive income of associates
(Unrealized loss on available-for-sale financial assets) 700
Share of profit of associates 30,100
Unrealized gain on available-for-sale financial assets 26,667
Unrealized loss on derivatives in an effective cash flow hedge 4,000
Work performed by the entity and capitalized 15,000
Based on the above and the result of the audit, determine the following:
1. The profit for the year

a. 65,500 b. 64,800 c. 96,000 d. 281,300
Revenue 355,000
Work performed by the entity and capitalized (Revenue) 15,000
Total revenue 370,000
Decrease in inventories of finished good and WP -107,900
Raw materials and consumables used -92,000
Depreciation and amortization -17,000
Employee benefit expense -43,000
Other income 11,300
Other expense -5,500
Share in profit of associates 30,100
Finance cost -18,000
Loss from discontinued operations -30,500
Income tax expense -32,000
Profit/Net income 65,500
2. The other comprehensive income for the year
a. 93,500 b. 32,700 c. 28,700 d. 28,000
Actuarial gains on defined benefit pension plans 1,333
Exchange difference gain on translating foreign operations 10,667
Gains on property revaluation 3,367
Share on OCI of associates( unrealized loss on AFS) -700
Unrealized gains on AFS 26,667
Unrealized loss on derrivatives in an effective cash flow hedge -4,000
Income tax relating to OCI -9,334
Other comprehensive income 28,000
3. Total comprehensive income for the year
a. 93,500 b. 92,800 c. 94,200 d. 28,000
Profit for the year 65,500
Other comprehensive income for the year 28,000
Total comprehensive income 93,500
20.The bookkeeper for the Kristine Company prepared the following income statement and retained earnings
statement for the year ended December 31, 2021:
Kristine Company
December 31, 2021
Expense and Profits
Sales (net ) P1,568,000

Less: Selling expenses ( 156,800)
Net sales 1,411,200
Add: Interest revenue 18,400
Add: Gain on sale of equipment 25,600
Gross sales revenue 1,455,200
Less: Costs of operations
Cost of goods sold P960,800
Correction of overstatement in last year's
income due to error (net of P13,200
income tax credit) 30,800
Dividend costs (P4 per share for 8,000
ordinary shares) 32,000
Loss due to earthquake 33,600 (1,057,200)
Taxable revenues 398,000
Less: Income tax on income from
continuing operations ( 99,840)
Net income 298,160
Miscellaneous deductions
Loss from operations of discontinued
Segment X44 (net of P7,200 income
tax credit) 16,800
Administrative expenses 134,400 ( 151,200)
Net revenues P 146,960
Kristine Company
Retained Revenue Statement
For the Year Ended December 31, 2021
Beginning retained earnings P474,400

Add: Gain on sale of Segment X44 (net of P10,800 income
taxes) 25,200
Recalculated retained earnings 499,600
Add: Net revenues 146,960
646,560
Less: Interest expense ( 27,200)
Ending: retained earnings P619,360
The preceding account balances are correct but have been incorrectly classified in certain instances.
Based on the above and the result of the audit, answer the following:
1. The income from continuing operations for the year ended December 31, 2021 is
a. 207,760 b. 199,360 c. 299,200 d. 226,560
Sales 1,568,000
Less cost of sales -960,800
Gross profit 607,200
Less operating expenses:
Selling expenses -156,800
Administrative expenses -134,400
Operating income 316,000
Other income and expense:
Gain on sale of equipment 25,600
Loss due to earthquake -33,600
Finance cost:
Interest income 18,400
Interest expense - 27,200
Income from continuing operations before taxes 299,200
Less income tax expense - 99,840
2 The income (loss) from discontinued operations for the year ended December 31, 2021 is
a. 8,400 b. (16,800) c. 25,200 d. 0
Loss from operations of discontinued segment(net of tax) - 16,800
Gain on sale of segment ( net) 25,200
Income from discontinued operations 8,400
3. The profit for the year ended December 31, 2021 is
a. 234,960 b. 307,600 c. 209,760 d. 207,760
Income from discontinued operations 8,400
Profit/Net income 207,760
4. The balance of retained earnings as of December 31, 2021 should be
a. 619,360 b. 646,560 c. 650,160 d. 709,360
Prior period adjustments -30,800
Adjusted RE, 1/1 443,600
Add profit 207,760
Total 651,360
Less dividends -32,000
MODULE 27 STATEMENT OF CASH FLOWS
Multiple Choice
All answers shall be submitted on or before December 4, 2020 (Friday)
1. On December 31, 2020, Harold Corporation provided the following information:
Dividend received 500,000

Dividend paid 1,000,000
Cash received from customers 9,000,000
Cash paid to suppliers and employees 6,000,000
Interest received 200,000
Interest paid on long-term debt 400,000
Proceeds from issuing share capital 1,500,000
Proceeds from sale of long-term investments 2,000,000
Cash paid for equity investment at FVOCI 800,000
Income taxes paid 300,000
Proceeds from long-term debt 3,000,000
What is the net cash provided by operating activities for 2020?
a. 3,300,000 b. 3,000,000 c. 2,700,000 d. 2,000,000
2. During 2020, Pyramid Co. had the following activities related to its company activities:
Cash receipts from sale of goods 4,500,000

Cash payments to suppliers 1,900,000
Cash collected from rent revenue 600,000
Cash payments of distribution expenses 500,000
Cash payment for insurance 300,000
Cash payments to purchase land 3,000,000
Cash proceed from sale of equipment 2,000,000
Purchase of equipment by issuing bonds 1,800,000
Proceeds from issuance of ordinary shares 1,300,000
Proceeds from issuance of preference shares 800,000
Cash dividends on preference shares paid 700,000
Purchase of treasury shares 1,100,000
Proceeds from sale of plant 1,500,000
PROFIT OR LOSS (OPERATING) NCA (INVESTING) NTL & SE (FINANCING)
4,500,000 -3,000,000 1,300,000
-1,900,000 2,000,000 800,000
600,000 1,500,000 -700,000
-500,000 -1,100,000
-300,000
TOTAL: 2,400,000 500,000 300,000
1. The amount of net cash used in operating activities to appear at Pyramid’s statement of cash flows
for 2020 should be:
a. 2,400,000 b. 2,500,000 c. 2,700,000 d. 2,600,000
2. The amount of net cash used in investing activities to appear at Pyramid’s statement of cash flows
for 2020 should be:
a. 400,000 b. 500,000 c. 600,000 d. 700,000
3. The amount of net cash used in financing activities to appear at Pyramid’s statement of cash flows
for 2020 should be:
a. 350,000 b. 400,000 c. P 300,000 d. P 450,000
3. At the beginning of the current year, Daedalus Company reported cash balance of 6,000,000. During the
current year, the entity disclosed the following changes in certain accounts:
Accounts receivable 1,000,000 increase
Inventory 700,000 decrease
Accounts payable 1,500,000 decrease
*ASSUME AMOUNT TO COMPUTE
Total sales and cost of goods sold were 25,000,000 and 15,000,000 respectively. All sales and purchases
were made on credit. Various expense of 3,200,000 were paid in cash.
What is the total amount of collections from customers?

a. 25,000,000 b. 24,000,000 c. 23,000,000 d. 22,000,000
What is the total amount of payment to suppliers?

a. 14,800,000 b. 17,300,000 c. 15,800,000 d. 15,000,000
What amount was reported as cash balance on December 31, 2020?

a. 9,000,000 b. 13,000,000 c. 10,000,000 d. 11,000,000
4. Blue Ocean Company reported net income of P 5,500,000 for the current year.
Changes in certain accounts during the year are:
Investment in Blue Moon stock carried on the equity basis 360,000 increase
Accumulated depreciation for the year 110,000 increase
Unearned interest income 70,000 decrease
Premium on bonds payable 100,000 decrease
Deferred tax liability 130,000 increase
What amount should be reported as net cash provided by operating activities?
a. 5,100,000 b. 5,210,000 c. 5,200,000 d. 5,170,000
NET INCOME 5,500,000
-360,000
110,000
-70,000
PREM. BP -70,000
130,000
TOTAL 5,240,000
*DO NOT INVOLVE CASH OUTLAYS ADD BACK – ACCU. DEP
5. Kensington Industries reported net income of 50,000 in 2021. Depreciation expense was 19,000.
The following working capital accounts changed:
Accounting receivable 11,000 increase
Non-trading equity investment 16,000 increase
Inventory 7,300 increase
Non-trade note payable 15,000 increase
Accounts payable 12,200 increase
If Kensington uses IFRS reporting and the indirect method, what amount is their adjustments to reconcile
net income to net cash provided by or (used in) operating activities?
a. 3,100 b. 49.500 c. 12,900 d. 10,500
NET INCOME – ACCRUAL 50,000
ADJUSTMENTS:
DEP EXP 19,000
INC. AR -11,000
INC. INVT -7,300
INC. AP 12,200 12,900
CASH FLOW – OPE. ACT 62,900
6. During 2021, Orton Company earned net income of 384,000 which included depreciation expense of 78,000.
In addition, the company experienced the following changes in the account balances listed below:
Increases Decreases
Accounts payable 45,000 Accounts receivable 12,000
Inventory 36,000 Accrued liabilities 24,000
Prepaid insurance 33,000
Based upon this information what amount will be shown for net cash provided by operating activities for
2021?
a. 492,000 b. 465,000 c. 285,000 d. 267,000
NI – ACCRUAL 384,000
ADJ:
DEP 78,000
INC. AP 45,000
INC. INV -36,000
DEC. AR 12,000
DEC. ACC. LIAB -24,000
DEC. PREP INS 33,000 108,000
CASH – OPE. ACT 492,000
7. Jarvis, Inc. reported net income of 34,000 for the year ended December 31, 2021 Included in net income
were depreciation expense of 8,400 and a gain on sale of equipment of 1,700. Each of the following
accounts increased during 2021:
Inventory 4,500
Prepaid rent 6,800
Available-for-sale investment 1,000
What is the amount of cash provided by operating activities for Jarvis, Inc. for the year ended December
31, 2021?
a. 31,200 b. 33,900 c. 22,200 d. 32,200
ADJ:
DEP 8,400
GAIN ON SALE OF EQUIP -1,700
INC. AR -2,200
INC. INVENTORY -4,500
INC. PREPAID RENT -6,800
INC. AP 5,000 (1,800)
8. Cashman Company reported net income of 255,000 for the year ended 12/31/2021. Included in the
computation of net income were: depreciation expense, 45,000; amortization of a patent, 24,000; income
from an investment in ordinary shares of Linda Inc., accounted for under the equity method, 36,000; and
amortization of a bond premium, 9,000. Cashman also paid a 60,000 dividend during the year. The net
cash provided by operating activities would be reported at:
a. 279,000 b. 231,000 c. 219,000 d. 171,000
ADJ:
DEP 45,000
AMORT. PATENT 24,000
INCOME - INVTS -36,000
AMORT. PREMIUM -9,000 24,000
9. The net income for the year ended December 31, 2021, for Olivia Company was 1,200,000. Additional
information is as follows:
Depreciation on plant assets 600,000
Amortization of leasehold improvements 340,000
Provision for doubtful accounts on short-term receivables 120,000
Provision for doubtful accounts on long-term receivables 100,000
Interest paid on short-term borrowings 80,000
Interest paid on long-term borrowings 60,000
Based solely on the information given above, what should be the net cash provided by operating activities in
the statement of cash flows for the year ended December 31, 2021?
a. 2,260,000 b. 2,360,000 c. 2,340,000 d. 2,500,000
NI – ACCRUAL 1,200,000
ADJ:
DEP 600,000
AMORT. LEASEHOLD IMPR. 340,000
PROV. DOUBTFUL ACCT ON STR 120,000
PROV. DOUBTFUL ACCT. ON LTR 100,000
NET CASH – OPE. ACT 2,630,000
10. Soo Kwang Co. provided the following data for the preparation of cash flows for the current year:
Cash balance, beginning 1,500,000
Cash paid to purchase inventory 7,800,000
Cash received from sale of trading securities 2,500,000
Cash paid for interest in bank loan 450,000
Cash paid to repay principal amount of bank loan 1,000,000
Cash collected from customers 10,000,000
Cash received from issuance of ordinary shares 1,200,000
Cash paid for dividends 2,000,000
Cash paid for income taxes 1,350,000
Cash paid to purchase trading securities 1,000,000
1. What is the net cash provided by operating activities?

a. 1,900,000 b. 2,900,000 c. 2,350,000 d. 400,000
2. What is the net cash used in financing activities?

a. 3,000,000 b. 2,000,000 c. 1,800,000 d. 4,200,000
3. What is the cash balance at year end?

a. 3,400,000 b. 1,600,000 c. 1,400,000 d. 2,400,000
*DIRECT METHOD
CASH BAL, BEG 1,500,000
OPERATING ACTIVITIES
Cash paid to purchase inventory -7,800,000
Cash received from sale of trading securities 2,500,000
Cash paid for interest in bank loan -450,000
Cash paid to repay principal amount of bank loan 10,000,000
Cash collected from customers -1,350,000
Cash received from issuance of ordinary shares -1,000,000 1,900,000
FINANCING ACTIVITIES
Cash paid for dividends (2,000,000)
Cash paid for income taxes 1,200,000
Cash paid to REPAY BANL LOAN (1,000,000) (1,800,000)
CASH BAL. END 1,600,000
11. In preparing Titan Inc.’s statement of cash flows for the year ended December 31, 2021, the following
amounts were available:
Collect Long term note receivable 320,000I
Issue bonds payable 406,000F
Purchase treasury shares 210,000F
What amount should be reported on Titan, Inc.’s statement of cash flows for investing activities?
a. 320,000 b. 110,000 c. 726,000 d. 110,000
INVESTMENT 320,000
FINANCING 406,000
210,000
12. The following information on selected cash transactions for 2021 has been provided by Mancuso Company:
Proceeds from sale of land 160,000I
Proceeds from long-term borrowings 400,000F
Purchases of plant assets 144,000I
Purchases of inventories 680,000-O
Proceeds from sale of Mancuso ordinary shares 240,000F
What is the cash provided (used) by investing activities for the year ended December 31, 2021, as a result
of the above information?
a. 16,000 b. 256,000 c. 160,000 d. 800,000
PROCEEDS FROM SALE ON 160,000
LAND
PURCH. OF PLANT ASSETS -144,000
CASH PROVIDED BY INV. ACT 16,000
13. During 2021, Stout Inc. had the following activities related to its financial operations:
Carrying value of convertible preference shares in Stout,
converted into ordinary shares of Stout 360,000
Payment in 2021 of cash dividend declared in 2020 to
preference shareholders 186,000
Payment for the early retirement of long-term bonds payable
(carrying amount 2,220,000) 2,250,000
Proceeds from the sale of treasury shares (on books at cost of 258,000) 300,000
The amount of net cash used in financing activities to appear in Stout's statement of cash flows for 2021
should be
a. 1,590,000 b. 1,776,000 c. 2,136,000 d. 2,148,000
PAYMENT OF CASH DIV TO PS -186,000
PAYMENT FOR THE EARLY RETIRE. OF BONDS 2,250,000
PROCEEDS FROM SALE OF TREASURY 300,000
CASH USED IN FINANCING ACT -2,136,000
14. Napier Co. provided the following information on selected transactions during 2021:
Purchase of land by issuing bonds 250,000
Proceeds from issuing bonds 500,000F
Purchases of inventory 950,000
Purchases of treasury shares 150,000F
Loans made to affiliated corporations 350,000I
Dividends paid to preference shareholders 100,000F
Proceeds from issuing preference share 400,000F
Proceeds from sale of equipment 50,000I
1. The net cash provided (used) by investing activities during 2021 is

a. 50,000 b. (300,000) c. (550,000) d. (1,250,000)
2. The net cash provided by financing activities during 2021 is

a. 550,000 b. 650,000 c. 800,000 d. 900,000
NCA – INVESTING NTL/EQITY - FINANCING
-350,000 500,000
50,000 -150,000
-100,000
400,000
-300,000 650,000
15. Peavy Corp.'s transactions for the year ended December 31, 2021 included the following:
Acquired 50% of Gant Corp.'s ordinary shares for 180,000 cash which was borrowed from a bank.
Issued 5,000 of its preference shares for land having a fair value of 320,000.
Issued 500 of its 11% debenture bonds, due 2019, for 392,000 cash.
Purchased a patent for 220,000 cash.
Paid 120,000 toward a bank loan.
Sold available-for-sale investments for 796,000.
Had a net increase in returnable customer deposits (long-term) of 88,000.
NCA – INVESTING NTL/EQITY - FINANCING
-180,000 180,000
-220,000 392,000
796,000 -120,000
88,000
396,000 540,000
1. Peavy’s net cash provided by investing activities for 2021 was

a. 296,000 b. 396,000 c. 476,000 d. 616,000
2. Peavy’s net cash provided by financing activities for 2021 was

a. 452,000 b. 540,000 c. 572,000 d. 660,000
16. Fleming Company provided the following information on selected transactions during 2021:
Dividends paid to preference shareholders 150,000 F-DEDUCT
Loans made to affiliated corporations 750,000 I-DEDUCT
Proceeds from issuing bonds 900,000 F-ADD
Proceeds from issuing preference shares 1,050,000 F-ADD
Proceeds from sale of equipment 450,000 I-ADD
Purchases of inventories 1,200,000 CURRENT
Purchase of land by issuing bonds 300,000 DISCLOE
Purchases of treasury shares 600,000 F-DEDUCT
1. The net cash provided (used) by investing activities during 2021 is

a. (600,000) b. (300,000) c. 150,000 d. (450,000)
2. The net cash provided (used) by financing activities during 2021 is

a. (1,650,000) b. 450,000 c. 750,000 d. 1,200,000
NCA NTL/E
Investing Financing
-150,000
-750,000
900,000
1,050,000
450,000
-600,000
-300,000 1,200,000
17. The balance in retained earnings at December 31, 2020 was 720,000 and at December 31, 2021 was
582,000. Net income for 2021 was 500,000. A share dividend was declared and distributed which increased
share capital 200,000 and share premium 110,000. A cash dividend was declared and paid.
RE,12/31/20 720,000
NET INCOME 500,000
1,220,000
LESS: SHARE DIV -310,000
CASH DIV 328,000
RE. 12/31/21 582,000
1. The amount of the cash dividend was

a. 248,000 b. 328,000 c. 442,000 d. 638,000
2. The share dividend should be reported on the statement of cash flows (indirect method) as
a. an outflow from financing activities of 200,000.
b. an outflow from financing activities of 310,000.
c. an outflow from investing activities of 310,000.
d. Share dividends are not shown on a statement of cash flows.
18.The following information was taken from the 2021 financial statements of Dunlop Corporation:
Bonds payable, January 1, 2021 500,000
Bonds payable, December 31, 2021 2,000,000
During 2021
A 450,000 payment was made to retire bonds payable with a face amount of 500,000.
Bonds payable with a face amount of 200,000 were issued in exchange for equipment.
In its statement of cash flows for the year ended December 31, 2021, what amount should Dunlop report as
proceeds from issuance of bonds payable?
a. 1,500,000 b. 1,750,000 c. 1,800,000 d. 2,200,000
Bonds Payable
Retirement 500,000 500,000 beg.
200,000 Exchange with equipt.
?1.8M Proceeds from issuance
CA 500 2,500,000 Cr.
Ret. Price -450 -500,000 -Dr.
Gain 50 20,000,000 Ending
19. The net cash provided by operating activities in Sosa Company's statement of cash flows for 2021 was
115,000. For 2021, depreciation on plant assets was 45,000, amortization of patent was 8,000, and cash
dividends paid on ordinary shares was 54,000. Based only on the information given above, Sosa’s net
income for 2021 was
a. 115,000 b. 62,000 c. 8,000 d. 116,000
*WORK BACK
115,000-8,000-45,000 = 62,000
20. The balance sheet data of Kohler Company at the end of 2021 and 2020 follow:
2021 2020
Cash 50,000 70,000
Accounts receivable (net) 120,000 90,000
Merchandise inventory 140,000 90,000
Prepaid expenses 20,000 50,000
Buildings and equipment 180,000 150,000
Accumulated depreciation—buildings and equipment (36,000) (16,000)
Land 180,000 80,000
Totals 654,000 514,000
Accrued expenses 24,000 36,000
Notes payable—bank, long-term 80,000
Mortgage payable 60,000
Share capital-ordinary, 10 par 418,000 318,000
Retained earnings (deficit) 16,000 (30,000)
654,000 514,000
Land was acquired for 100,000 in exchange for ordinary shares, par 100,000, during the year; all equipment
purchased was for cash. Equipment costing 10,000 was sold for 4,000; book value of the equipment was
8,000 and the loss was reported in net income. Cash dividends of 20,000 were charged to retained earnings
and paid during the year; the transfer of net income to retained earnings was the only other entry in the
Retained Earnings account. In the statement of cash flows for the year ended December 31, 2021, for Naley
Company:
1. The net cash provided by operating activities was

a. 52,000 b. 66,000 c. 56,000 d. 48,000
Operating:
Net Income 66,000
Adjustments:
Increase in AR -30,000
Increase in MI -50,000
Dec. in Prepaid exp, 30,000
Increase in AP 26,000
Decrease in Accrued expenses -12,000
Depreciation 22,000
loss on sale of equipment 4,000
Cash flow from operating activities 56,000
2. The net cash provided (used) by investing activities was
a. 26,000 b. (40,000) c. (136,000) d. (36,000)
Investing:
Sale of Equipment 4,000
Cash purchase of equipment -40,000
Cash flow from investing activities - 36,000
3. The net cash provided (used) by financing activities was
a. -0- b. (20,000) c. (40,000) d. 60,000
Financing:
Retirement of NP - LT -80,000
Issuance of MP 60,000
Payment for dividends -20,000
Cash flow from financing activities - 40,000
21. The differences in Beal Inc.’s balance sheet accounts at December 31, year 2 and year
1, are presented below.
Increase (Decrease)
Assets
Cash and cash equivalents 120,000
Available-for-sale securities 300,000
Accounts receivable, net --
Inventory 80,000
Long-term investments (100,000)
Plant assets 700,000
Accumulated depreciation --
1,100,000
Liabilities and Stockholders’ Equity
Accounts payable and accrued liabilities (5,000)
Dividends payable 160,000
Short-term bank debt 325,000
Long-term debt 110,000
Common stock, 10 par 100,000
Additional paid-in capital 120,000
1,100,000
The following additional information relates to year 2:
Net income was 790,000.

Cash dividends of 500,000 were declared.
Building costing 600,000 and having a carrying amount of 350,000 was sold for
350,000.
Equipment costing 110,000 was acquired through issuance of long-term debt.
A long-term investment was sold for 135,000. There were no other transactions
affecting long-term investments.
10,000 shares of common stock were issued for 22 a share.
In Beal’s year 2 statement of cash flows,
Q1. Net cash provided by operating activities was

a. 1,160,000
b. 1,040,000
c. 920,000
d. 705,000
*920,000 = 790,000-80,000-35,000+250,000-5,000
Q2. Net cash used in investing activities was
a. 1,005,000
b. 1,190,000
c. 1,275,000
d. 1,600,000
*1,005,000=-300,000+135,000+220,000
Q3. Net cash provided by financing activities was
a. 20,000
b. 45,000
c. 150,000
d. 205,000
22. Arlene. Inc. had the following statements prepared as of Dec. 31, 2021:
Arlene, Inc.
COMPARATIVE BALANCE SHEET
Dec. 31, 2021 and 2020
12/31/2021 12/31/2020
Cash P 30,000 P 35,000
Account Receivable 540,000 505,000
Available for sale securities 175,000 90,000
Inventories 161,688 300,000
Prepaid rent 25,000 20,000
Machinery and Equipment 770,000 650,000
Accumulated Depreciation (175,000) (125,000)
Total Assets P1,526,688 P1,475,000
Accounts Payable P230,000 P200,000

Income taxes payable 20,000 30,000
Wages payable 40,000 20,000
Short-term loans payable 40,000 50,000
Long-term loans payable 300,000 345,000
Common Stock, P10 par 500,000 500,000
APIC 150,000 150,000
Retained Earnings 246,688 180,000
Total Liabilities and Equity P1,526,688 P1,475,000
Arlene, Inc.
INCOME STATEMENT
For the year ending Dec. 31, 2021
Sales P1,690,750
Cost of Good sold 875,000
Gross Profit 815,750
Operating Expenses 620,000
Operating Income 195,750
Interest Expense 47,000
Income before tax 148,750
Income tax expense 52,062
Net Income P 96,688
Addition information:
1. Dividends in the amount of P30,000 were declared and paid during 2021.
2. Depreciation expense is included in operating expenses
3. No unrealized gains or losses have occurred on available for sale securities
during the year.
Based on the given data, calculate the following;
1. Cash received from customers

a. P1,725,750
b. P1,625,750
c. P1,655,750
d. P1,593,688
Accounts Receivable
Beg. 505,000 ? Collection
Sales 1,690,750 1,655,750
Debit 2,195,750
Less credit
End 540,000
2. Cash paid to suppliers
a. P706,688
b. P983,312
c. P766,688
d. P736,688
Accounts Payable
Payment ? 200,000 Beg. Beg. Inventory 300,000
706,688 736,688 Purchases Purchases ? 736,688
936,688 Credit TGAS 1,036,688
Less debit Less ending inventory-161,688
230,000 End Cost of goods sold 875,000
3. Cash paid for operating expenses
a. P545,000
b. P595,000
c. P617,062
d. P555,000
Operating expense - accrual 620,000
Depreciation expense -50,000
Prepaid rent - beg. -20,000
Prepaid rent - ending 25,000
Wages payable - beg. 20,000
Wages payable - end. -40,000
Payment for operating expense 555,000
4. Net cash provided by operating activities
a. P347,062
b. P285,000
c. P335,000
d. P305,000
*285,000=1,655,750-706,688-555,000-47,000-62,062
Taxes payable
Payment ? 30,000 Beg.
62,062 52,062 ITE ITE/ITP
82,062 Credit
Less debit
20,000 Ending
5. Net cash used in investing activities
a. P120,000
b. P235,000
c. P205,000
d. P347,062
*(205,000)=-120,000-85,000
6. Net cash used in financing activities
a. P75,000
b. P147,062
c. P55,000
d. P85,000
*85,000=-10,000-45,000-30,000

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MODULE 21 EMPLOYEE BENEFITSMultiple Choice

Fair value of plan assets 6,950,000

Following information for the current year:

1. Determine the employee benefit expense for the current year

2. Determine the remeasurement at year-end

Actual return on PA 650,000

What is the total defined benefit cost?

Current Service Cost 1,000,000

What is the Defined Benefit Cost?

What is the Interest Income?

What is the remeasurement gain/loss

FV of plan assets 5,000,000

1. Determine the employee benefit expense for the current year

2. Determine the prepaid/accrued liability at year- end

What amount should be reported as net interest expense?

Fair value of plan asset 4,350,000

Pension Fund 135,000

What is the projected benefit obligation on January 1?

What is the current service cost for the current year?

On December 31, 2020, The Projected benefit obligation was 6,223,000.

1. What was the actuarial gain or loss on PBO during 2020?

2. Interest Income for the year was?

Interest Income (567,000)

2. What amount should be reported as total remeasurement gain?

Actual return on PA 750,000

2. What is the remeasurement on plan assets?

PA, beg 7,400,000

Current service cost 13,000,000

Q1. What is the pension expense for the current year?

Q3. What is the projected benefit obligation on December 31?

Q4. What is the remeasurement gain or loss on December 31?

Q5. What is the pension asset/liability on December 31?

MODULE 22 INTERIM FINANCIAL REPORTING

MODULE 23 OPERATING SEGMENTS

Segments Total Revenue Operating Profit Identifiable Assets

Sales to unaffiliated customers 10,000,000

Joseph has a reportable segment if that segment’s revenue is-

Segments Sales Traceable operating expenses

Additional expenses not included above are as follows:

Indirect operating expenses 1,440,000

Segment D’s operating profit was

Q2. External revenue reported by operating segments must be at least

MODULE 24 Cash Basis to Accrual Basis of Accounting

Unearned rental income - January 1 50,000

What amount of rental revenue should Kristine record for 2021?

On an accrual basis, what was Kimberly’s service revenue for 2019?

Accrual sales 5,000,000

How much was received from customers during the year?

5. The following information pertains to Ozz Company’s sales:

What total amount was paid for operating expenses?

How much interest expense should Cleo report for 2021?

During 2021, Cleo remitted royalties of 3,000,000.

Revenue – cash 20,000,000

Interest income P2,101,000

1. The cash received for interest during 2019 was

2. The cash paid for salaries during 2019 was

3. The cash paid for insurance premiums during 2019 was

Salaries expense 1,650,000

Insurance expense 277,200

What was the net income for the current year?