(Q1)ABC Company purchased a varnishing machine for P3,000,000 on January 1, 2019. The entity received a government grant of P500,000 in respect of this asset. The policy is to depreciate the asset over five years on a straight-line basis and to treat the grant as deferred income. On January 1, 2021, the grant became repayable because of noncompliance with conditions.

1) Refer to ABC Company, what is the amount of depreciation expense in relation to the machine for the year 2019?

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2)Refer to ABC Company, what is the amount of government grant income to be reported in the 2019 income statement?

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3)Refer to ABC Company, what is the amount of deferred income - government grant to be reported in its December 31, 2020 Statement of Financial Position?

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(Q2)On January 1, 2019, BBB Company for P1,500,000 a 30% ownership interest in CCC Company. The fair values of the identifiable assets and liabilities of CCC Company on January 1, 2019 were equal to their carrying amount. CCC Company reported net income of P5,000,000, P7,000,000, and P8,000,000 for the years ended December 31, 2019, 2020, and 2021, respectively. CCC declared and paid dividends of P3,000,000 during 2019, P4,000,000 during 2020, and P4,500,000 during 2021.

1)Refer to BBB Company, what is the carrying amount of its Investment in CCC Company to be reported by BBB Company in its December 31, 2019 Statement of Financial Position?

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2)Refer to BBB Company, what is the carrying amount of its Investment in CCC Company to be reported by BBB Company in its December 31, 2020 Statement of Financial Position?

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3)Refer to BBB Company, what is the carrying amount of its Investment in CCC Company to be reported by BBB Company in its December 31, 2021 Statement of Financial Position?

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(Q3)GGG Company's sales for the year 2019 amounted to P8,000,000 based on stand-alone selling price. Related to these sales, 15,000 loyalty points were earned with a total stand-alone selling price of P2,000,000. Customers can use the points in buying GGG's products. The management estimates of redemption rate was 80% during 2019 and 90% during 2020. Actual points redeemed were 7,200 points during 2019 and 2,925 points during 2020. The points have no expiration.

1)Refer to GGG Company, what is the amount to be recognized as Sales during 2019?

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2)Refer to GGG Company, what is the amount to be recognized as Unearned Revenue-Points before redemptions?

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3)Refer to GGG Company, what is the amount to be recognized as Sales related to the points redeemed during 2019?

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4)Refer to GGG Company, what is the amount to be recognized as Sales related to the points redeemed during 2020?

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(Q4)On January 2, Year 1, Morey Corp. granted Dean, its president, 20,000 stock appreciation rights. Dean is required to stay in the company before the rights can be exercised on January 2, Year 4. On exercise, Dean is entitled to receive cash for the excess of the stock's market price on the exercise date over the market price on the grant date. The market price of Morey's stock was P30 on January 2, Year 1, P32.25 on December 31, Year 1, P32.7 on December 31, Year 2, and P33.15 on December 31, Year 3.

1)Refer to Morey Corp., what is the amount of compensation expense related to share appreciation rights to be reported in its Year 1 income statement?

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2)Refer to Morey Corp., what is the amount of compensation expense related to share appreciation rights to be reported in its Year 2 income statement?

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3)Refer to Morey Corp., what is the amount of compensation expense related to share appreciation rights to be reported in its Year 3 income statement?

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4)Refer to Morey Corp., what is the amount of salaries payable related to share appreciation rights to be reported in its December 31, Year 2 balance sheet?

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5)Refer to Morey Corp., what is the amount of salaries payable related to share appreciation rights to be reported in its December 31, Year 3 balance sheet?

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