Professional Documents
Culture Documents
1.) On June 30, 2015, ABC Company prepaid a P1, 000, 000 premium on an
annual insurance policy. The premium payment was a tax deductible expense
in the 2015 cash basis tax return. The accrual basis income statement will
report a P500, 000 insurance expense in 2015 and 2016. The income tax rate
is 30%. On December 31, 2015, what amount should be reported as deferred
tax liability?
2.) The shareholders of ABC Company approved a two-for-one split of the entitys
share capital, and an increase in authorized shares from 100, 000 shares with
P20 par value to P200, 000 shares with P10 par value. The shareholders
equity accounts immediately before the split shares were share capital P1,
000, 000, share premium P150, 000 and retained earnings P1, 350, 000.
What should be the balances in the share premium and retained earnings,
respectively, after the share split is affected?
3.) ABC Company was organized January 1, 2015 with 100, 000 authorized
shares of P100 par value. The following transactions occurred during the
year:
January 15
February 14 Issued 2, 000 shares for legal services with a fair value of
P300, 000. The shares on this date are quoted at P160 per
share.
March 27
October 31 Issued P4, 000, 000 convertible bonds at 110. The bonds
are quoted at 97 without the conversion feature.
November 5 Declared a 2-for-1 share split when the market value of
the share was P160.
December 17
1,
350,
200,
300,
During the current year, the actuary determined the current service cost at
P2, 500, 000 and the discount rate at 10%. The actual return on plan assets
was P1, 200, 000. Contribution to the plan amounted to P500, 000. The
actuarial loss due to increase in PBO during the year was P900, 000 and the
average remaining service periods is 10 years. What is the employee benefit
expense?
11.)
In problem number 10, what is the net remeasurement gain or loss?
12.)
In problem number 10, what is the prepaid or accrued benefit cost at
year-end?
13.)
On January 1, 2015, ABC Company estimated a projected benefit
obligation of P4, 400, 000 based on a settlement rate of 12%. Pension
benefits paid to retirees totaled P600, 000. Service cost for 2015 amounted to
P1, 480, 000. The fair value of plan assets totaled P3, 500, 000 and P4, 000,
000 on January 1, 2015 and December 31, 2015, respectively. What is the
projected benefit obligation on December 31, 2015?
14.)
A director of ABC Company shall receive a retirement benefit of 10%
of the final salary per annum for a contractual period of three years. The
director does not contribute to the scheme. The anticipated salary over three
years is P1, 000, 000 for 2015, P1, 200, 000 for 2016 and 1, 440, 000 for
2017. The discount rate is 5%. Using the projected unit credit method, what is
the estimated pension liability on December 31, 2016?
15.)
The directors of ABC Company whose P50 par value share capital is
currently selling at P60 per share have decided to issue a stock dividend. The
selling price is not expected to be affected by the stock dividend. The entity,
which has an authorization for P1, 000, 000 shares, had issued 500, 000
shares, of which 100, 000 shares are now held as treasury. In order to
capitalize P2, 400, 000 of retained earnings, what percentage should be
declared as a stock dividend by the directors?
16.)
On December 31, 2015, ABC Company declared a cash dividend of
P800, 000 to shareholders of record on January 15, 2016 and payable on
February 15, 2016. The entity reported the following information on
December 31, 2015:
Accumulated depletion
Share capital
000, 000
200, 000
1,
Share premium
300, 000
Retained earnings
600, 000
Amount
1, 100,
110,
600,
2, 500, 000
18.)
ABC Company was incorporated on January 1, 2015 with the following
authorized capitalization:
Ordinary share capital, 200, 000 shares, no par,
P100 stated value
10,
During 2015, the entity issued 150, 000 ordinary shares for a total of P18,
000, 000 and 50, 000 preference shares at P60 per share. In addition, on
December 15, 2015, subscriptions for 20, 000 preference shares were taken
at a purchase price of P100. These subscribed shares were paid for on
January 15, 2016. Net income for 2015 was P5, 000, 000. What amount
should be reported as total contributed capital on December 31, 2015?
19.)
ABC Company had depreciation of P300, 000 in the income statement
for 2015. In the tax return, ABC had depreciation of P500, 000. ABCs income
statement also included P50, 000 accrued warranty expense that will be
deducted for tax purposes when paid. The tax rates are 30% for 2015 and
25% for future years. These were the only temporary differences. What is the
deferred portion of the provision for income taxes?