1. Traveler Company bought a franchise from Trending Corporation on January 1, 2018 for P5,100,000. An independent consultant retained by Traveler estimated that the remaining useful life of the franchise was 20 years. Its unamortized cost on Trendings books at January 1, 2018 was P1,700,000. Traveler decided to amortize the franchise over the maximum period allowed. What is the carrying value of the franchise on December 31, 2020?

a. 4,845,000

b. 4,335,000

c. 4,590,000

d. 4,717,500

2.) James Corporations current liabilities at December 31, 2020 totaled P1,800,000 before any necessary year-end adjustment relating to the following transactions: On December 23, 2020, a vendor authorized James to return for full credit, merchandise shipped and billed at P54,000 on December 9, 2020. A P54,000 credit memo was received and recorded by James on January 2, 2021. During December 2020, James received P90,000 from Red, a customer, as an advance payment for a handicraft that James will make to Reds specifications. From this transaction, James has a P90,000 credit balance in its accounts receivable from Red at December 31, 2020.What amount should Cherry report as total current liabilities in its December 31, 2020 balance sheet?

a. 1,890,000

b. 1,746,000

c. 1,764,000

d. 1,836,000

3.) Sumo Department Store sells gift certificates, redeemable for store merchandise, that expire one year after their issuance. Sumo has the following information pertaining to its gift certificates sales and redemptions: Unearned at December 31, 2020, 720,000; 2020 sales, 2,400,000; 2020 redemptions of prior-years sales 240,000; and 2020 redemptions of current-year sales, 1,680,000. Sumos experience indicates that 10% of gift certificates sold will not be redeemed. In its December 31, 2020 balance sheet, what amount should Sumo report as unearned revenue?

a. 480,000

b. 960,000

c. 720,000

d. 1,200,000