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Page 3 5. An entity began operations on January 1. 2016. From 2016 to 2018, the entity provided for doubtful accounts based on 5% annual credit sales, On January 1, 2019, the entity changed the method of determining the allowance for doubtful accounts using an aging schedule. In addition, the entity writes off all accounts receivable over I year old. 2019 2018 2017 2016 Credit sales 15.000,000 9.500,000 8.000.000 6.000,000 Collections excluding recovery 11.700,000 8,200.000 6.700.000 4.500.000 Accounts written off during year 200.000 120,000 80,000 None Recovery of accounts written off 100.000 40.000 35,000 None Amount Probability of Collection 30 days or less 3.000.000 95% Between 31 and 60 days 1,500,000 80% Between 61 and 180 days 1,200,000 75% Between 181 and one year 1,200,090 50% Over one year - to be written off 100.000 0% 1. What is the allowance for doubtful accounts on December 31, 20197 1. 1,350,000 b. 1,450,000 c. 1,250,000 d. 1.000,000 2. What amount should be reported as doubtful accounts expense for 2019? a. 500.000 b. 600.000 C. 700.000 d. 400,000 3. What is the net realizable value of accounts receivable on December 31, 20197 a. 6.900,000 b. 7.000,000 c. 5,550,000 d. 5,650,000 6. A bank granted a 10-year loan to a borrower in the amount of P1,500,000 with stated interest rate 6%. Payments are due monthly and are computed to be P16.650. The bank incurred P40,000 of dire loan origination cost and P20,000 of indirect loan origination cost. The bank charged the borrower 4-point nonrefundable loan origination fee. 1. What is the carrying amount of the loan receivable to be reported initially by the bank? n. 1.440,000 b. 1,480,000 c. 1,500,000 d. 1.520,000 2. What is the carrying amount of the loan payable to be reported initially by the borrower? a. 1,500,000 b. 1.440,000 c. 1,560,000 d. 1.590,000SELF TEST I. An entity provided the following trial balance on June 30, 2019: Cash overdraft ( 200.000) Property, plant and equipment, net 1.900,000 Accounts receivable, net 700.000 Accounts payable 700,000 1,200,000 3,000.000 Inventory Share capital Prepaid expenses 200,000 Share premium 500.000 Land held for resale 2,000,000 Retained carnings 1,600,000 Checks amounting to P600,000 were written to vendors and recorded on June 30 resulting in cash overdraft of P200,000, The checks were mailed on July 9. Land held for resale was sold for cash on July 15. The financial statements were issued on July 31. 1. What total amount should be reported as current assets? a. 4.500.000 b. 4.100.000 c. 4.300,000 d. 2,500.000 2. What total amount should be reported as current liabilities? a. 1.300.000 b. 1,500,000 C. 900.000 d. 700,000 3. What is the total shareholders' equity? n. 3,100,000 b. 3,500,000 c. 3,000.000 d. 4,600,000 2. An entity provided the following adjusted balances at year-end: Cash 550,000 Share premium 600,000 Accounts receivable 1,650,000 Retained carnings 700,000 Prepaid taxes 300,000 Translation adjustment - debit 500,000 Accounts payable 200,000 Revenue 3,600,000 Share capital 500,000 Expenses 2,600,000 During the current year, estimated tax payments of P300,000 were charged to prepaid taxes. The entity has not yet recorded income tax expense. There were no differences between financial income and taxable tax income and the tax rate is 30%. Included in accounts receivable is P500,000 due from a customer. Special terms granted to this customer require payment in equal semiannual installments of P125,000 every April I and October 1. I. What amount should be reported as total current assets? a. 1,950,000 b. 2,500,000 c. 2,200,000 d. 2,250,000 2. What is the total shareholders' equity? a. 2,500,000 b. 2,000,000 c. 1,800,000 d. 1,300.000 67153. An entity reported the following data for the current year. Page 2 Net sales Cost of goods sold 9,500,000 4,000,000 Selling expenses 1,000.000 Administrative expenses 1,200.00 Interest expense 700,000 Gain from expropriation of land 500.000 Income tax 800,000 Income from discontinued operations 600.000 Unrealized gain on equity investment at FVOCI 900.000 Unrealized loss on futures contract designated as a cash flow hedge 400.000 Increase in projected benefit obligation due to actuarial assumptions 300,000 Foreign translation adjustment - credit 100.000 Revaluation surplus 2,500,000 1. What net amount should be recognized in other comprehensive income? a. 2,600,000 b. 3,100,000 C. 3.400.000 d. 2,800,000 2. What net amount in OCI should not be recycled to profit or loss? a. 3.400.000 b. 2,700,000 c. 3.700,000 d. 3,100,000 3. What amount should be reported as comprehensive income? a. 5,500,000 b. 2,900.000 c. 5.700,000 d. 6,000,000 4. An entity reported the checkbook balance on December 31, 2019 at P8,000,000. In addition, the entity held the following items in the safe on that date: Check payable to the entity, dated January 2, 2020 in payment of a sale, not included in December 31 check book balance 400,000 Check payable to the entity, deposited December 15 and included in December 31 checkbook balance, but returned by bank on December 30 stamped "NSF". The check was redeposited on January 2, 2020 and cleared on January 5, 2020 3,000,000 Check drawn on the entity's account dated and recorded on December 31, 2019 but not mailed until January 15, 2020 2,500,000 Coins and currencies on hand 800,000 Three-month money market instruments due 2020 1,500,000 Four-month treasury bill due 2020 2,500,000 Cash restricted for acquisition of equipment to be disbursed 2020 600,000 Sinking fund restricted for bond payable due December 31, 2020 1,000,000 Traveler's check 200,000 Manager's check 100,000 What amount should be reported as cash and cash equivalents on December 31, 2019? a. 11.400,000 b. 11,100,000 c. 13,600,000 d. 10,400,000 67
