1.Lake Company reported P950,000 net income for the quarter ended September 30, 2019 which included the following after tax items:

A P600,000 expropriation gain, realized in April 30, 2019, was allocated equally to the second, third and fourth quarters of 2019.

A P160,000 cumulative-effect loss resulting from a change in inventory valuation method was recognized on August 1, 2019.

In addition, the entity paid P480,000 on February 1, 2019 for 2019 calendar-year property taxes. Of this amount, P120,000 was allocated to the third quarter of 2019. For the quarter ended September 30, 2019, what amount should be report as net income?

a. 910,000

b. 1,030,000

c.1,110,000

d. 1,150,000

2.Webb Company is preparing its interim financial statements for the first quarter ended March 31, 2019. Expenses in the first quarter totaled P4,000,000 of which 25% was variable. The fixed expenses included television advertising expense of P1,500,000 representing air time to be incurred evenly during 2019, and depreciation expense of P600,000 for 2019 for an equipment that was available use on March 1, 2019. What amount should be reported as total expenses in the first quarter ended March 31, 2019?

a. 4,000,000

b. 2,875,000

c.2,325,000

d. 2,335,000

3.Masig Company has a financial reporting year that begins July 1, 2019 and ends on June 30, 2020. The tax year ends every December 31. The entity reports quarterly for interim purposes and the quarterly income is P1,000,000 for the first quarter, P1,500,000 for the second quarter, P2,500,000 for the third quarter and P4,000,000 for the fourth quarter. The annual effective ta rate is 30% for 2019 and 40% for 2020. What is the total income tax expense for the year ended June 30, 2020?

a. 3,350,000

b. 2,700,000

c.3,600,000

d. 3,150,000

4.During a period of inflation, an account balance remains constant. With respect to this account, a purchasing power loss will be recognized if the account is a

a.Monetary asset

b.Monetary liability

c.Nonmonetary asset

d.Nonmonetary liability

5.During a period of deflation, an entity would have the greatest gain in general purchasing power by holding

a.Cash

b.Property, plant and equipment

c.Accounts payable

d.Mortgage payable