1) ABC Company started construction of a new building on Jan 1, 2020 and moved into a finished building on Jul 1, 2020.Cost of the building is P25M.P20M was incurred in 2020 evenly throughout the year.

The entity's incremental borrowing rate was 12% throughout 2020 and the total amount of interest incurred was P1.02M.How much interest should be capitalized on Dec 31, 2020?

A. 1,200,000

B. 1,020,000

C. 1,500,000

D. 2,400,000

2)On Janaury 1, 2020, the city government agreed to provide ABC Company with a P6M 3-yr, interest-free loan.

The prevailing rate of interest for a loan of this type is 10% and the present value of 1 at 10% for 3 years is .75.

What is the deferred grant income on Dec. 31, 2020?

A. 600,000

B. 1,050,000

C. 450,000

D. 900,000

3) On July 1, 2020, XYZ Company, a calendar year entity, purchased the rights to a mine.The total purchase price was P14M, of which P2M was allocable to land.

Estimated reserves were 1.5M tons.The entity expects to extract and sell 25,000 tons per month.

The entity purchased new equipment on July 1, 2020 costing P8M and with useful life of 4 yrs.

What is the depletion for 2020?

A. 1,950,000

B. 2,400,000

C. 1,200,000

D. 1,400,000

4) At the beginning of the year, XYZ Company purchased a mineral mine for P36M with removable ore estimated at P2.16M tons.The property has an estimated value of P3.6M after the ore has been extracted.

Development costs incurred in preparing the property for the extraction is P10.8M.During the year, 270K tons were removed and 240K tons were sold.

How much depletion should be included in the cost of goods sold for the current year?

A. 4,800,000

B. 4,050,000

C. 3.600,000

D. 5,400,000

5) On July 1, 2020, XYZ, a calendar year entity, purchased the rights to a mine.The total purchase price was P14M, of which P2M was allocable to land.

Estimated reserves were 1.5M tons.The entity expects to extract and sell 25,000 tons per month.

The entity purchased new equipment on July 1, 2020 costing P8M and with useful life of 4 yrs.

What is the depreciation for 2020?

A. 1,600,000

B. 1,000,000

C. 2,000,000

D. 1,200,000