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'''(3. &evaluation o asset is requently done due to the act that the groupo assets is materially impaired in a given period. #hus, initial measurementmay indicate initial revaluation using such model.'''(7. !ppreciation is the e)cess o the revalued amount over the historicalcost. *uch amount is allocated over the remaining useul lie o the assetthrough piecemeal reali2ation.'''(8. &evaluation surplus is an equity account. &eali2ation o its portionin a given period is debited to such amount that may lead to a decrease inequity.'''(9. &evaluation is the same with impairment o asset.'''(5. &evaluation o assets may be made in dissimilar assets provided thatthe regularity o revaluing these items should be observed based on themateriality dierence o its carrying amount over its related air value.?owever, it is still upon management1s discretion whether or not to userevaluation as its basis or initial measurement o this asset.'''+4. ;oo value is a term related to historical cost o the asset whilereplacement cost is related to revaluation model. !t any given time, both maybe interchanged.

Tes II. MULTIPLE CHOICE- C!1(+)$!%s. 2"$e !%' e ee" !, '!+" *!$*e. #$%d' ()*e '!+" ,$%)

)%se" !% e s()*e ("!/$ded 0e,!"e e %+10e".

6=& I#%@* (-+, reer to the inormation below:=n Aanuary (, +4(+, an entity purchased (44 cows which are years old or(3,444 each or the purpose o producing mil or the local community. =nAuly (, +4(+, the cows gave birth to +4 calves.

6air value less cost to sell o the biological assets as ollows:Bewborn cal on Auly ( ,444Bewborn cal on >ecember ( 3,444 year old cal on >ecember ( 8,444 years old cow on >ecember ( (9,444 years old cow on >ecember ( +,444

'''(. #otal air value on >ecember (, +4(+ o said biological asset!.D (,394,444;.D (,44,444C.D +,34,444>.D Bone o the above

'''+. #otal change in air value or +4(+ amounted to '''''.!.D 544,444;.D 574,444C.D (,44,444>.D -4-

'''. *t. "eter Company has a recent gross proit history o 4E o net

sales. #he ollowing data are available rom &omero1s accounting records orthe three months ended @arch (, +4(+:

Inventory at (/( 734,444"urchases ,+44,444Bet sales ,344,444"urchase returns 83,4446reight in 34,444

nder gross method, estimated cost o goods sold or three months ended @arch(, +4(+ should be!.D (,944,444;.D +,844,444

C.D ,883,444>.D Bone o the above

'''. *t. Gregory Company began operations in +4(+. 6or the year ended>ecember (, +4(+, *t. Gregory made available the ollowing inormation:

#otal merchandise purchases or the year 8,444,444@erchandise inventory at >ecember ( (,44,444Collection orm customers ,444,444

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!ll merchandise was mared to sell at 4E above cost. !ssuming that all salesare on a credit basis and all receivables are collectible, what should be the>ecember (, +4(+ accounts receivable balanceF!.D (,444,444;.D 8,94,444C.D ,94,444>.D Bone o the above

'''3. *t. !ndrew Inc. uses the 6I6= retail method o inventory valuation. #heollowing inormation is available:

Cost Retail

;eginning Inventory 744,444 (,344,444"urchases ,444,444 3,344,444Bet additional marup 344,444Bet mardowns (,444,444*ales revenue ,344,444

What would be estimated cost o ending inventoryF!.D (,+44,444

;.D (,44,444C.D (,744,444>.D Bone o the above

'''7.D *t. @atthew Company uses the average cost retail inventory method toaccount or inventory. #he ollowing inormation relates to operations orthe current year:

Cost Retail

;eginning inventory and purchases 7,444,444 5,+44,444Bet marups 44,444Bet mardowns 744,444*ales 8,944,444

#he cost o sales or the current year should be!.D 944,444;.D 3,+44,444C.D 3,+34,444>.D Cannot be determined due to limited inormation given

'''8. =n >ecember 4, +4(+, *t. @ar Company purchased a machine rom 6ellCorporation in e)change or a noninterest bearing note requiring eightpayments o +44,444. #he irst payment was made on >ecember 4,+4(+ and theothers are due annually on >ecember 4. !t date o issuance o note, theprevailing rate o interest or this type o note was ((E.

Bote payable carrying amount as o >ecember (, +4(+ should be!.D (,(+,44

;.D 5+,44C.D (,4+5,+44>.D (,47,+44

'''9.D *t. "aul Company recently acquired two items o equipment. #hetransactions are described as ollows:

!cquired a press at an invoice price o ,444,444 subect to a 3E cashdiscount which was taen. Cost o reight during shipment was " 34,444and installation cost amounted to +44,444.

!cquired a welding machine at an invoice price o +,444,444 subect toa (4E cash discount which was not taen. !dditional welding supplieswere acquired at a cost o (44,444.

#otal cost o two equipments should be

!.D ,544,444;.D 3,(44,444C.D 3,+44,444C.D 3,444,444

'''5. =n Auly (, +4(+, *t. 6rancis Corporation e)changed its non-monetaryasset HequipmentD with another non-monetary asset. #he ollowing data weremade available:

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%quipment ,44,444!ccumulated depreciation +,444,4446air value o equipment ,444,444Cash received on e)change 544,444

I the cash lows on the no-monetary assets were not the same, what would bethe cost o the non-monetary asset receivedF!.D (,344,444;.D (,794,444C.D +,(44,444>.D ,444,444

'''(4. =n @arch (, *t. Aohn Company traded in an old machine having acarrying amount o " (,794,444 and paid cash dierence o 744,444 or a newmachine having a total cash o +,434,444. =n @arch (, what amount o lossshould *t. Aohn recogni2e on this e)changeF!.D 744,444;.D +4,444C.D 84,444>.D -4-

'''((. =n Aanuary +, +4(+, *t. $oren2o Company received a grant o 74,444,444to compensate it or costs it incurred in planting trees over a period oive years. #he company will incur such cost in this manner:

Year Costs

+4(+ +,444,444+4( ,444,444+4( 7,444,444+4(3 9,444,444+4(7 (4,444,444

Income to be recogni2ed at the end o year +4(3F!.D 9,444,444;.D (+,444,444C.D (7,444,444>.D +4,444,444

6=& I#%@* (+-(, reer to the details below:=n Aanuary +, +4(+, *t. !nthony Inc. received a grant related to a actorybuilding. #he total amount o the grant was (9,444,444. #he company acquiredthe building rom an industrialist identiied by the government. I *t.!nthony did not purchase the actory building, which was located in the slumso the city it would have been repossessed by a government agency. #hecompany purchased the building or 3,444,444. #he useul lie o thebuilding is not considered to more than three years, mainly due to the actthat the previous owner did not properly maintain it.

'''(+. nder deduction rom asset approach, what is the carrying amount othe building in the >ecember (, +4(+ statement o inancial positionF!.D (9,444,444;.D +,444,444C.D 7,444,444>.D 3,444,444

'''(. nder deerred income approach, the carrying amount o building as o>ecember (, +4(+ should be!.D (9,444,444;.D +,444,444C.D 7,444,444

>.D 3,444,444

'''(. =n Aanuary +, +4(+, *t. $ue Company received a grant o 74,444,444 tocompensate it or costs it incurred in planting trees over a period o iveyears. #he company will incur such cost in this manner:

Year Costs

2012 2000000

2013 !000000

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201! "000000

201# 8000000

201" 10000000

!ctual costs incurred in planting the trees showed +,444,444 and ,444,444 inyears +4(+ and +4(, respectively. ?owever, in +4( and up to year +4(7, thecompany has stopped planting trees.

>ue to non-ulillment o its obligation, the government is demanding animmediate repayment o the grant in the amount o 34,444,444 which isconsidered reasonable.

What is the loss on government grants related to repayment o said grantF!.D (+,444,444;.D noneC.D +,444,444>.D 34,444,444

'''(3. #he ollowing transactions pertain to the general borrowings madeduring +4(+ by *t. Aames Company in connection with the construction o the

company1s new warehouse:$ri%&i'al (orro)i%* &osts

9E ban loan +,44,444 (5+,4447E short-term note (,744,444 57,4449E long-term note +,444,444 (74,444

#he construction started on Aanuary (, +4(+ and the warehouse was completedon >ecember (, +4(+. %)penditures on the warehouse were as ollows:

Aanuary (- 44,444 @arch (- (,444,444 Aune 4- (,+44,444 *eptember 4-(,444,444 >ecember (- 44,444.

?ow much is the capitali2able borrowing cost o this constructionF!.D +44,444;.D (4,44C.D +59,744>.D Bone o the above

''''(7. =n Aanuary (, +4(+, *t. Aude Company borrowed ,444,444 at aninterest rate o (4E speciically or the construction o its new building.Interest earned rom the temporary investment o the proceeds o the loanprior to their disbursement amounted to 34,444. #he company had also theollowing other loans or +4(+ which were borrowed or general purposes. #heproceeds o these loans were used in part or the construction o thebuilding.

Principal Borrowing cost

(4E short term note ,444,444 44,444

(+E long term note ,444,444 94,444

#he construction began Aanuary (, +4(+ and the building was completed on>ecember (, +4(+. %)penditures on the building were made as ollows:Aanuary ( (,444,444@arch ( +,344,444Aune 4 ,444,444*eptember 4 +,344,444>ecember ( (,444,444

What is the total amount o capitali2able borrowing costF!.D 74,444;.D 34,444

C.D ((4,444>.D 544,444

'''(8. *t. Aoseph Company had the ollowing loans outstanding or the entire+4(+.

*peciic construction loan (,444,444 (4EGeneral loan +4,444,444 (+E

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#he company began the sel-construction on Aanuary ( and the building wascompleted on >ecember (, +4(+ with the ollowing details o e)penditures:Aanuary ( (,444,444Auly ( +,444,444Bovember ( ,444,444

What is the cost o new buildingF!.D 7,444,444;.D 7,+94,444C.D 7,44,444>.D 7,+34,444

'''(9. *t. Cecilia Inc. had the ollowing loans outstanding during the years+4(+ and +4(.*peciic construction loan +,444,444 (4EGeneral loan (3,444,444 (+E

#he company began the sel-construction o a new building on Aanuary (, +4(+and the building was completed on >ecember (, +4(. #he ollowinge)penditures were made during +4(+ and +4(:

Aanuary (, +4(+ +,444,444Auly (, +4(+ ,444,444Bovember (, +4(+ ,444,444Auly (, +4( (,444,444

Cost o the building on >ecember (, +4( should be!.D (4,444,444;.D 5,344,444C.D ((,774,444>.D ((,344,444

6=& I#%@* (5-+4, reer to the details below:>uring +4(+, *t. @ary Inc. had the ollowing transactions pertaining to itsnew oice building:"urchase price-$and +4,444$egal ees or contracts to purchase land (,444!rchitect1s ee 37,444>emolition o old building on site 3,444*ale o scrap rom old building +(,444Construction cost o new building Hully completedD +,34,444

'''(5. Cost o the building!.D +,3+4,444;.D +,347,444C.D +,3,444>.D +,3,444

'''+4. Cost o land!.D +4,444;.D 9,444C.D 33,444>.D ,444

'''+(. *t. @a. Goretti Company acquired land and building or 3,344,444 on=ctober (, +4(+. #he land was appraised at +,44,444 and the building at,744,444. npaid property ta)es assumed by the company amounted to +34,444.!dditional costs incurred were:

;uilding renovation 344,444=ption on alternative land and building not acquired 34,444

Cost o survey 3,444

Cost o the land should be!.D +,43,444;.D +,+3,444C.D +,33,444>.D +,83,444

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'''++. =n >ecember (, +4(+, *t. #eresa Company purchased a ,444,444 tracto land or a actory site. #he company ra2ed an old building on the propertyand sold the materials it salvaged rom the demolition. #he company incurredadditional costs and reali2ed salvaged proceeds during >ecember +4(+ asollows:

"ayments to tenants to vacate the premises +44,444>emolition o old building (44,444$egal ees or purchase contract and recording ownership 34,444#itle guarantee insurance 4,444"roceeds rom sale o salvaged materials (4,444

Cost o the land!.D ,34,444;.D ,84,444C.D ,94,444>.D ,54,444

'''+. =n Aanuary (, +4(+, *t. #herese Corporation bought machinery under acontract that required a down payment o 34,444, plus + monthly o +3,444each, or total cash payments o 734,444. #he cash equivalent price o themachinery was 334,444. #he machinery has useul lie o (4 years and residual

value o +3,444.

sing straight line method o depreciation the asset, compute or thedepreciation or year ended >ecember +4(+.!.D 3+,344;.D 33,444C.D 7+,344>.D 73,444

'''+. *t. Ignatius Company purchased equipment or 34,444 on Aanuary +,+4(+. #he equipment has an estimated salvage value o 74,444 and an estimateduseul lie o 3 years. #he equipment is being depreciated using the sum-o-years-digit method.

#he carrying amount o the equipment on >ecember (, +4( should be!.D (37,444;.D +3+,444C.D 94,444>.D (+,444

''''+3. =n Aanuary +, +4(+, *t. *ebastian Inc. purchased actory equipmentor ,444,444. %stimated salvage value was (74,444. %stimated useul lie is(4 years and will be depreciated using the double declining balance method.

>epreciation or +4( should be!.D 9,444;.D 7(,44

C.D 74,444>.D 879,444

'''+7. *t, #homas Co. purchased a machine or 744,444 on Aanuary +, +4(+. #hemachine has an estimated useul lie o 3 years and salvage value o 74,444.>epreciation was computed by the (34E-declining balance method.

!ccumulated depreciation as o >ecember (, +4( should be!.D +(7,444;.D +83,444C.D +5,444>.D 47,444

6=& I#%@* +8-+5, reer to the details below:#he ollowing account balances relating to property, plant and equipment o*t. @ary Company appear on the boos on Aanuary (, +4(+.

$and +,444,444;uilding (3,444,444!ccumulated depreciation ,834,444@achinery ,444,444!ccumulated depreciation (,344,444

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!ssets have been carried at cost since their acquisition. !ll assets wereacquired on Aanuary (, +44+. #he straight line method is used. =n Aanuary (,+4(+, the company wishes to show property, plant and equipment at revaluedamount. =n such date, competent appraisers submitted the ollowing:

Re'la&e,e%t &ost

$and 3,444,444;uilding +3,444,444@achinery 3,444,444

'''+8. What is the revaluation surplus on Aanuary (, +4(+F!.D (3,444,444;.D ((,344,444C.D 4,444,444>.D 9,344,444

'''+9. #he +4(+ depreciation should be!.D 3(,+34;.D 983,444

C.D 3+3,444>.D 7+3,444

'''+5. What is the revaluation surplus on >ecember (, +4(+F!.D ((,483,444;.D ((,(34,444C.D ((,434,444>.D (4,934,444

'''4. *t. Jincent Company taes a ull year1s depreciation e)pense in theyear o an asset1s acquisition, and no depreciation e)pense in the year odisposition. >ata relating to one o *t. Jincent1s depreciable assets at>ecember (, +4((, are as ollows:

!cquisition year +445Cost (,(44,444&esidual value +44,444!ccumulated depreciation 8+4,444%stimated useul lie 3 years

sing the same depreciation method H*Y>D in +445, +4(4, +4((, how muchdepreciation e)pense should the company record in +4(+ or this assetF!.D (+4,444;.D (94,444C.D ++4,444>.D +4,444

---------------------END O $REINALS E/AINATION---------------

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