1. The following information pertains to Tonton Company for the year ended December 31, 2015:

Net monetary assets - January 1 P 880,000

Sales 3,900,000

Purchases 2,340,000

Expenses 975,000

Income tax 585,000

Cash dividends paid on December 31, 2015 200,000

The sales, purchases, expenses and income tax accrued evenly throughout the year.

Selected general price index numbers are 110 on January 1 and 280 on December 31. What is the gain or loss on purchasing power during the year?

a. P1,360,000 gain

b. P1,360,000 loss

c. P200,000 gain

d. P200,000 loss

2. The following liabilities appear on the statement of financial position of Tantan Company:

Deferred tax liability 400,000

Estimated warranty liability 200,000

Advances from customers 1,200,000

Unearned revenue 300,000

Finance lease liability 4,000,000

Bonds payable 3,000,000

Accrued payable 500,000

Accounts payable 1,000,000

In preparing financial statements in a hyperinflationary economy, how much should the entity classify as monetary liabilities?

a. 8,900,000

b. 9,700,000

c. 8,500,000

d. 4,500,000

3. Tenten Company showed the following information for purposes of preparing hyperinflationary financial statements on December 31, 2015:

Note receivable (note was received on October 1, 2014)--- 2,400,000

Price index numbers October 1, 2014--- 80

January 1, 2015 ---100

December 31, 2015--- 400

Average for 2015--- 250

What is the fraction that should be used in restating the note receivable on December 31, 2015?

a. 400/150

b. 400/250

c. 44/80

d. 400/400

4. Tintin Company purchased land for P3,000,000 on December 31, 2014 when the index number was 120. The land was held until December 31, 2015 when it was sold for P4,000,000. The index number on December 31, 2015 was 300.

What amount should be reported in the income statement for 2015 in a hyperinflationary economy as gain or loss on sale of land?

a. 3,500,000 loss

b. 3,500,000 gain

c. 1,000,000 gain

d. 1,000,000 loss

5. MARK Company's machinery and equipment account on December 31, 2015 is analyzed as follows:

Cost Accumulated Depreciation Acquired in December 2012 4,000,000- 1,600,000

Acquired in December 2013 1,000,000- - 200,000

Pertinent index numbers at the end of each year are:

2012 -120

2013- 125

2014- 350

What should be reported in a hyperinflationary statement of financial position prepared on December 31, 2014 as the carrying amount of machinery and equipment?

a. 8,960,000

b. 7,800,000

c. 3,200,000

d. 9,240,000