Question 16 4 pts Problem 5 Sarzuela, Corp is the guarantor of a P1,500,000 notes payable of Ramos, Inc to BPI. During the year, Ramos, Inc. was unable to operate for four months due to an ongoing pandemic. As of December 31, 2020, Sarzuela's management deemed that it is reasonably possible that Ramos will not be to pay the principal amount of the loan. On January 26, 2021 Ramos declared bankrupcy, five days before the Board of Directors of Ramos approved the issuance of its financial statements. Sarzuela's financial statements were released on January 25, 2021. How should the liability be accounted for in the financial statements? O Recognize a P1 500.000 provision in the statement of comprehensive income O Disclosure of a contingent liability 4 pts Question 14 Problem 3 The following are the provisions related to Zendaya, Inc. for 2020: . On January 1, 2020, Zendaya purchased a special machinery to conduct its oil drilling operations in Davao for P5,000,000, its useful life is 10 years. The Company is required by local government to clean the area after the drilling operations. The estimated clean-up costs was P1,500,000. The relevant discount rate was 8%. Zendaya has been operating its powerplant in Davao for 15 years in order to supply energy to surrounding areas. On December 27, 2020 there was a minor chemical leak. This was resolved immediately on December 29, 2020. On January 16, 2021, b Jore the financial statements were issued, there was a major chemical leak that lead to an explosion resulting to a fire that damaged the surrounding areas. The Company's legal counsel believed that damages amounting to P8,000,000 will be paid. The Company has a P20,000,000 comprehensive public liability insurance plan with a P1,000,000 deductible clause. How much is the provision to be recognized in the statement of financial position as of December 31, 2020? (Round off answers to the nearest whole number)