Question
8. Fell Company operates a retail grocery store that is allowed by law to collect refundable deposits of P5 on soda cans. Information for 2015
8. Fell Company operates a retail grocery store that is allowed by law to collect refundable deposits of P5 on soda cans. Information for 2015 follows:
Liability for refundable deposits - January 1 150,000
Cans of soda sold 100,000
Soda cans returned 110,000
On February 1, 2015, the entity subleased space and received a P25,000 deposit to be applied against rent at the expiration of the lease in 2017.
On December 31, 2015, what amount should be reported as current liability?
A. 125,000
B. 100,000
C.75,000
D. 25,000
9. Black Company required advance payments with special orders for machinery constructed to customer specifications. These advances are nonrefundable. The entity provided the following information for the current year:
Customer advances-beginning of year 1,180,000
Advances received with orders 1,840,000
Advances applied to orders shipped 1,640,000
Advances applicable to orders canceled 500,000
What amount should be reported as current liability for advances from customers at year-end?
A. 1,480,000
B. 1,380,000
C. 880,000
D. 0
10. Dunn Trading Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Past experience indicates that only 80% of the stamps sold to licensees will be redeemed. The liability for stamp redemptions was P6,000,000 on January 1, 2015. The entity provided the following information for the current year:
Stamp service revenue from stamps sold to licensees 5,000,000
Cost of redemption (stamps sold prior to 1/1/2015) 2,750,000
If all the stamps sold in 2015 were presented for redemption in 2016, the redemption cost would be P2,250,000.
What amount should be reported as a liability for stamp redemptions on December 31, 2015?
A. 7,250,000
B. 5,500,000
C. 5,050,000
D. 3,250,000
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