l---'/r I

g' ,
( 40. How much is the revaluation/impairmentc. loss for the year 2O18? [5. [rUI y Lu --:;,
/u, A-
v?t ii
a.
b.
330,000
70.000 ,{n -i0,000 t
1r-t-
OnJanuary l,2OlT,YenEompanyobtainedafranchisefromEurr:!pfp.tosell fo(20ye-e19.fllro'sproducts. Theinitial franchisefee
as agreed upon shall be-P6,0OO.QQp, and shall be payable ir-i caslr, q1,Oggr90Jtl^/hen the contract is signed and the balance in -four ,
equal installments thereafte.. asGvidenced by a non-interest bearing notE- The agreement provides that the franchisor shall provide
the necessary initial services required under a franchise contract. The agreemegt-atso provides tha!'51{o-of th-e-r-evenue from the
franchise must be paid to the franchisor. Revenue from the franchise for 2Ol7 wi9-!!,QOO.Q0-QlThe plETailh6 intdiEstrate for this
type of note is L2ok. PV of P1 for 4 periods al l2o/o i1.6355 and PV of ordinary annuify'fffizlleriods at LTo/o is-aplza )

I 41. tlow much is the initial cost of the franchise?

i a.6,000,000 c.4,796,625
b. 4,t77,500 d.3,796,6?5 aA'

^aE I
fi*i ';q:.4
v: l,it\"
a-gainst revenues for the year 2Ol7?
t-,
\i - 42. How much is the total amount glErged
--. i,g; ,s,w)
\ , a. 458,875
b.945,426
-=-- 23e,831
d. 489,83i
iL,n','''
,' ,fu,: I
_litrf45_ 4lfrU
wrrl Company provided ygu the following infqrrmation pertainlng to its Research and Development activities for the year!'2077:
';

, 1-lSearching for applications of new(esciarchlindings

57,000 v\ dJ
|,--tllJy'"
Troubie-sho.-o-tiogr-i[connection with breakdowns during
) @merElilproduction B7,ooo ' OlifV4
., Adaptatin;,j:J*'#','[1::?;,?*L:"J,3f5?j3l.' t,ntlvf iv!,

'\ continuinQ-eammerciaLs6;v;ty 39,000

Engineering fellow-through in an early phase of
(94 meiqrat' Production 45,000
Labofatory (rsearch ?imed at discovery of new knowledge 2O4,0OO

- ,Desiglof tootf iffiand nplc[s-]nvolvin-q new techncltgy 72,OOO

.. Qu-aity control during fol1merciaTlroduction, inctrrCrn3t rr'ttrtr1g.r
L74,000
testing of prodtlcts
-/'Tesaog in search for product or process alternative 300,000
- .design and construction of preproduction prototype and model 384,000
>$qgljneTnd on-going efforts to refine, enrich, or otherwise,
'- improve upon the qualities of an existing product 750,000

\f 43. what is the total amount to be classified and expensed as research and deletopm,eJrtjor 2Oc15?
\ a.r,095,000 b. 1,017,000 -' i.'es63o --T sor,oob-
Noven Inc., places a coupon in each box of its produet. Custon-lers may,send in..-t-eAcoupons anff].d0, and the company will send
'h1r,- 6 CD. Sufficient CDs were purchased at-!5.40 _apieee. During ?-O17', L,2_6lE,O00boxes were sold. It was_estimaF9,thut of (l-
_r-)t:..:€ iouDC,ns wrll be redeemed. In 2017, 18,0OO.rirrrcns lere redeemed. I t. 2 - .)-. \- ;a" i. ,.0fital 4
premiuqllgsp itr - '!u-rr,
)l |
,: ., 44. How much is the for the 2Ol7?
y_ear :;
a.63,000 c. 15,120
b. 34,o2o d. 10,800 t- t ,i:,.''
h ou. How much is thg&blry for premiums outstanding as of December 31,2OL7? i?.,,t- ,.lt'' )_. .. 1._ ..(.
a.15,120 c.24,3OO f-,ld (rrt- ) ''Y:,i)'-:
b. 10,800 d. 43,200

A tr-uck owned and operated by Oslo Conrpany was involveo in an accident with an auto driven by Norway onpeleillbel l-Z,2AD*"
Oslo Company received notice on December 24, 2-OL7 of a iawsuit for P35O,OOO damages for a personal injury suffered by Norway.
Oslo's counsel lrclieves that jilis plobable that Norway witl be successful against the company for an estimated amount in the range
betwee\ PlOO,O0Olnd f 4OO,OOO, Each point within that rairge cf amoirnts is considered as likely as any other point. Qn,_DeEember
2)-2oL7; an-emptoyeeffid a-P1,5OO,OOO lawsuit against Oslo Company for damages suffered when one of oslo's equipment
malfunctioned in August of 2At7. The legal;ot+as€Lgf the cofliparry believes that it is*.pfSbqhlp that Oslo will pay th€ damages
ranging between P500,000 to 1,000,000 but P850,000 ls consrd_e_re( to be the best estimate of the obligation. On Me,rchJlz018, the
employee has offered to settle the lawsuit o^ut of court fo@_!QDQO,and the company lctepl$ the offer. The financialstatements
were Oltbo_rjze! to be issued on March 31,.2018.
a
{'t 46. How much is total provision that should be recognized as of December 31, 2O,-7?
\' a. 1,1OO,0OO b. 1,200,000 c. 850,000 d. none of the choices
On January !,2017, Sydney Inc. issuedleStrO.qrO-OglaA value. 5-year bonds t]!9 Each P 1,OOO bond was issued with,one_,/
detachable share warrant, each of which enEEId il,e bondholder to purchass 15 sh;E56[.'[-1,0-par ordinary share atf;2O. At issuaild
date, the market value of each of the bonds without warrant sql! {!-9, The stated rate on the bonds is 11olo payable annually every
1,2018. -ifl -> Tiil: fl'-^,* ,il:
Januarv 1, startins January
.I1'daf,i^f Svrl:i.$ Tl- ,

. 47. How much should be credited to sha-r-e pl-"Tlf# ,roi€Ii;.,se of the warrants assnming 6o*.,qf,P!,1":a r"nt *'Y
V^ were exercisggl? . . '>- ' '{ -J^n, _s'u'-*
\ u-:qso,doil- c. 900,000
^
qq|.t151i . Y ' 'h',<
b. 7s0,0oo d. 1,200,000
; ,nq;,y', 6r[;(_ ,,,,,,rybX,l
Chicago Company leased a new machine from Bulls Co. On January l,2Ot7, Chicago company provided the following information
pertaining to the lease:

Annual rental payable at beginning of each lease year, startlng Jan. 1,.2017 P400,000
Lease term 10 years
Useful life of machine 12 years
OI,EIXIEII-EAD E.AT'}I 2' \ Draa t aJ O