1. On March 31, 2020, the CHICAGO BULLS CORP issued a 3M, 12% promissory note for machinery purchased.

Equal payment of 1M and interest are payable annually every March 31,2021.
a) CL of December 31, 2021
b) Interest expense for 2021

2. Manny Pookyaw’s gross pay for the month of April was P33,365.
a) How much was his take home pay for April if Manny is a married individual with 2 dependent children.
(Whether you are married or has dependents, it is not counted anymore.)
b) SSS payable share of EE and ER

3. On September 1, 2019, NATSU DRAGNEEL COMP paid 2M for the purchase price of the equipment acquired.
They also paid 20k for nonrefundable sales taxes and 130k for installation cost. The equipments estimated useful life
is 10 years and residual value of 300k. On January 1, 2023, NATSU DRAGNEEL revised the total useful life of the
asset to 15 years from acquisition date and residual value to 150k.
a) Using HALF YEAR convention & double declining what is the depreciation expense for 2021?
b) Accumulated Depreciation as of Dec 31,2020 using SYD and Whole year convention.
c) Depreciation expense for 2023 if SLM was used and nearest month.

4. On November 1, 2020, PL CO issued its 9% callable bonds in the face amount of P2.5M which matures on October
31,2030. the market rate of bonds is 12%. Interest payment date is on April 30 and october 31. PL CO uses the
effective interest of amortizing discount and premium. oN AUGUST 1, 2022, pl co REDEEMED THE BONDS
PAYING 2,200,000.
a) Issue price
b) Interest expense on December 31, 2020
c) Carrying value of Bonds payable as of december 31, 2021
d) Gain or loss on the date of retirement

5. On August 1, 2014, MERALCO BBULLS company purchased a building for P59,750,000. The building has an
estimated life of 42 years. Six months depreciation was taken in the year of purchase and the book value of the
building on December 31,2020, after the depreciation adjusting journal entry is P53,250,000.
a) What is the salvage value of the building under SLM?

6. Company purchased truck on January 1, 2018 for cash price of 420,000. Installation cost of P28,000 were also paid.
The company estimated the useful life and residual value of 5 years and 25,000 respectively. The company used the
slm.
On January 1,2020, they paid 70,000 to overhaul the truck after which truck’s useful life was estimated to have been
extended by two years and its residual value increased to P30,800.
a) Depreciation expense for December 31,2020

7. On Aprl 21, 2018, Company bought new equipment for P275,000. The new equipment has an estimated salvage
value of 75,000 and useful life of 12 years. Depreciation is computed using the SYD whole year convention.
a) Amount of depreciation for 2018
b) Carrying value in the SFP at December 31,2020

8. BASTA CORP acquired a plant asset at the beginning of 2018. The asset has an estimated useful life of 10 years.
The December 31, 2020 SFP will report P907,500 of accumulated depreciation if DDB is used.
a) Cost of asset
b) Salvage value of asset
9. On March 1, 2020, YARI KA OIL COMPANY began operation of NORTH OIL FIELD. The field was acquired for
11.6M. The Field estimated to contain 4M barrels oil and will have a residual value of P2M. After the end of mines
life, it is expected that it will cost P400,000 to restore the land.
The company purhcased equipment for P580,000. This equipment can be used to pump 2 millions barrels of oil.
The depreciation of equipment is part of the cost to produce inventory.During 2020 the company extracted 30,000
barrels per month and sold 20,000 barrels per month. In the beginning of 2021, a new estimate indicated that the
capacity of mine was only 2M barrels at the beginning of the year. There is no change in the estimate for residual
value. Production for 2021 equaled 25,000 barrels per month and sold 15,000 per month
a) Carrying amount of equipmet as of December 31,2020
b) Carrying amount of natural resources that will appear in December 31,2021 in SFP

10. During the past several year annual net income of DEPARTMENT OF HELP INC averaged P450,000. at present
time the company is being offered for sale. Its accounting records show the book value of the net assets to be
P2,800,000. the fair market value of its net identifiable assets is p3,500,000.
An investor offered to buy the company equal to fair market value of the identifiable assets and to assume all
liabilities. In addition, the investor is willing to pay for goodwill an amount equal to the above average earnings for 5
years. The normal rate of return on the fair value of net assets in this industry is 8%.
a) What is the price offered by the investor?

11. On January 1, 2020, FIFTY FIFTY CO purchased a patent from CALL a friend FOR P400,000. CALL A FRIEND
has held this patent for 12 years. FIFTY FIFTY estimates that the patent has a remaining useful life of 10 years.
a) Patent amortization in 2020
12. On January 1,2017 MILLIONAIR CORPORATION acquired machinery for a total cost of P8,000,000. The
machinery is depreciated using the SYD method over a period of ten years. On January 1, 2021, mILLIONAIRE
CHANGED ITS DEPRECIATION METHOD TO DOUBLE DECLINING BALANCE METHOD.
a) Depreciation expense for 2021?

13. A number of major structural repairs completed at the beginning of the current fiscal year at a cost of P1M are
expected to extend the life of a building 10 years beyond the original estimate. The original cost of the building was
P7,770,000 and it has been depreciated by the SLM for 50 years. Estimated residual value is negligible and has been
ignored. The related accumulated depreciation account after the depreciation adjustment at the end of the preceeding
fiscal year is P5,439,000.
a) What is the amount of SLDepreciation for the current year, assuming that the repairs were completed at the
very beginning of the current year?

14. ABC country club has acquired a lot to construct a building. ABC had the following costs related to the
constructions:
Architect’s fees BUILDING 20,000
Construction Fees B 80,000
Engineers fees B 15,000
permanent fences around building LI 9,000
grading and leveling LAND 10,000
insurance costs incurred during cons B 7,000
Int on money borrowed for cons B 5,000
Land L 37,000
Building materials B 237,000
trees and shrubs LI 6,000
a) Cost of the building on SFP
15. At December 31, 2020, GAJEEL REDFOX had 2,000 gift certificate outstanding which had been sold to
customers during 2020 for P870 each.
a) How much revenue pertaining to the 2,000 outstanding gift certificates should be deferred at December 31,
2020?

16. LAXUS CO inaugurated a sales promotional campaign on September 1, 2020 in its desire to improve sales.
LAXUS placed a coupon redeemable for a premium in each box sold. Each premium costs LAXUS P20 and five
coupons must be presented by a customer to receive a premium. For the foud months ended December 31, 2020 the
following info is available:
Boxes sold 400,000
Premiums purchased 30,000
Coupons redeemed 100,000
a) Estimated liability for the premium claims outstanding at December 31, 2020?

17. FILLE CAINGLET CORP pays all salaried employees on a biweekly basis. Overtime pay however, is paid in the
next biweekly period. FILLE accrued salaries expense only at its June 30 fiscal year end. Data relating to salaries
earned in June 2020 are as follows:
- last payroll was paid on 6/25/20 for two week period ended 6/25/2020
- ot period ended 6/25/20 payroll was P42,000
- remaining work days in 2020 were June 28,29 and 30 on which there was no ot
- the recurring biweekly salaries total P850,000
a) Assuming a 5-day work week and a fiscal year ending June 30, FILLE should report liability at June 30,
2020 for accrued salaries of how much?

18. FLOYD MAYWEATHER is one of the employees of GOLDEN BOY. His 8 hours of work starts from 8:00 am to
5:00pm. Floy’s salary is 500/day and his rest day is Sunday.
a) How much is his gross pay if he works from 8am to 6pm on January 1 (regular holiday)
19. On December 1, 2021 DARK comp signed a 24-month P65,667 note payable. The mortgage calls for a 9% interest
per annum. The note is fully amortized over 24 months. The note requires monthly payment of 3,000 starting
December 31, 2021.
INT payment PRINCIPAL CA
65,667
1 (12/1/21) 3000 493 2507 63160 (CL=? NCL=?
2 (12/31/21) 3000 474 2526 60634
3 (1/31/22) 3000 455 2545 58089
4 3000 436 2564 55525
5 3000 416 2584 52941
6 3000 397 2603 50338
7 3000 378 2622 47716
8 3000 358 2642 45074
9 3000 338 2662 42412
10 3000 318 2682 39730
11 3000 298 2702 37028
12 3000 278 2722 34306
13 (12/31/22) 3000 257 2743 31563
14 3000 237 2763 28800
a) CL as of December 31, 2021
b) NCL as of December 31, 2021
c) Total cost of borrowing (lahat ng int payment)
20. On April 1,2020, THE HOBBIT issued 1,500 of its 8% 1,000 redeemable bonds payable. The bonds are dated
April 1, 2020 and mature on March 31,2025. Interest is payable every March 31 and September 30. The company uses
straight-line amortization of premium and discount. The bonds are issued at 102.
a) Cash proceeds on April 1, 2020
b) Carryong amount of the Bonds Payable as of December 31, 2020
c) Bond interest expense for 2021
d) Total borrowing cost

21. An analysis of the records of SMESH ENTERPRISES discloses changes in account balances for the current year
and the supplementary data listed:
CASH 40,000 increase Accounts Payable 60,000 decrease
AR 80,000 increase Accrued expenses 90,000 increase
MI 70,000 decrease
During the year, Smesh Enterprises borrowed P800,000 from the bank and paid offf P750,000 plus interest of
P200,000 interest of 5000 is accrued on December 31. There was no interest payable at the beginning of the year.
Furthermore, Clark the owner of Smesh transferred equity securities to the business which were sold for
P200,000 to finance the acquisition of merchandise. Clark made weekly withdrawals of 5,500
a) Determine the net income for the year

22. On January 1, 2020 BOSTON CELTICS company signed a 15-year note payable. The note calls for a 12% interest
per annum. The note is fully amortized over 15 years. The note requires an annual payment of 25,000 starting
December 31,2020.
a) How much is the cash proceed for this note payable?

23. On April 1, 2020 SPURS COMP issued 2,000 of its 10% P1000 bonds. The bonds are dated January 1, 2020 and
mature on January, 2030. Interest payable on January 1 and July 1. Market rate of itnerest is 10%.
a) Amount of cash received on the date of issuance

24. TIWALA LANG INC traded in an old machine having a cost of P500,000 and the carrying amount of P178,000
and paid a cash difference of P60,000 for a new machine having a total cash price of P245,000.
a) Cost of the new machine

25. ABA MATINDI COMP purchased for P 240,000 cash on July 1, 2010 a machine with estimated useful life of 10
years and estimated residual value of P12,000. Depreciation was recorded on a monthly basis using the straight line
method. The machine was sold on September 30,2015 for P130,000.
a) Amount of gain from disposal

26. On December 1, 2019 Faceless void comp purchased a P4M tract of land for a factory site. Void razed an unusable
old building on the property and sold the materials it salvaged from the demolition. Void incurred additional costs and
realized salvage proceeds during the year as follows:
Demolition of old building 200,000
Legal Fees for purchased contract & recording ownership 150,000
Proceeds from the sale of salvaged materials 20,000
Title guarantee and insurance 50,000
a) December 31, 2019 SFP, balance of land account?

27. Martyr Nyebera company purchased equipment on January 2,2015 for P3M. The equipment had an estimated
useful life of 5 years. The company’s policy is to depreciate the asset using 200% declining balance in the first two
years of the asset’s life and then switch to the straight-line method for the remaining useful life of the asset.
a) What is the book value as of December 31, 2017?

28. On April 1, 2014, ERZA CARLET COMPANY purchased land and building by paying P40M. The land and
building have appraised values of 10M and 40M respectively. The building will be used by ERZA CO as its new
office.
a) Cost to be recorded by ERZA for the building
b) For the land?

29. Valdez corp sells washing machines that carry a three warranty against manufacturer’s defects. Based on the
company experience warranty costs were estimated at P300 per amchine. During 2017, Web sold 24,000 washing
machines and paid a warranty cost of 1.7M
a) In its income statement for the year ended December 31, 2017. Warranty expense?

30. Proceeds of P14,625 were received from discounting a P15M 90-day non-interest bearing at a bank.
a) Discount rate per year used by the bank in computing the proceeds

31. Warren company plans to depreciate a new building using double declining balance depreciation. The building
cost 800K. the estimated residual value of the building is P50k and it has an expected useful life of 25 years.
Assuming the first year’s depreciation expense was recorded properly.
a) what would be the amount of depreciation expense for the second year?

32. On December 31,2020 Hamilton Inc, sold a used industrial crane for 600k cash. The original cost of the crane was
P5M and its accumulated depreciation equaled p4.2M on December 31,2020 they had been using the straight line
depreciation method. The estimated residual value was zero and its useful life was 25 years.
a) Gain or loss of the equipment on Decembe 31, 2020?

33. BB company purchased equipment in January of 2012 for 150K. the equipment was being depreciated on the
straight line method over an estimated useful life of 20 years with no salvage value. At the beginning of 2022, when
the equipment had been in use for 10 years, the company paid P25,000 to overhaul the equipment. As a result of this
improvement, the company estimated that the useful life of the equipment would be extended an additional 5 years.
a) What should be the depreciation expense recorded for this equipment in 2022?
34. At December 31, 2020 comp had 2000 gift certificate outstanding which had been sold to customers during 2020
for 870 each.
a) How much revenue pertaining to the 2,000 outstanding gift certificate should be deferred at December
31,2020?
1. On January 1, 2021, G Company purchased a new machine for P2,800,000. The new machine has an estimated
useful life of nine years and the salvage value was estimated to be P100,000. Depreciation was computed on the sum-
of-the-years'-digits method.
a) What amount should be shown in G's balance sheet at December 31, 2022, net of accumulated depreciation,
for this machine? 1,780,000 or 1,744,000

2. During 2022, ABC Corporation acquired a mineral mine for P3,000,000 of which P400,000 was ascribed to land
value after the mineral has been removed. Geological surveys have indicated that 10 million units of the mineral could
be extracted. During 2022, 1,500,000 units were extracted and 1,200,000 units were sold.
a) What is the amount of depletion expensed for 2022? 312,000

3. Hahn Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation expense in
the year of disposition. Data relating to one of Hahn's depreciable assets at December 31, 2023 are as follows:

Acquisition year       2021

Cost         P210,000

Residual value      30,000

Accumulated depreciation   144,000

Estimated useful life    5 years

A. Using the same depreciation method as used in 2021, 2022, and 2023, how much depreciation expense should
Hahn record in 2024 for this asset? 24,000 OR 23,400

4. On June 1, 2020 A Inc. issued P 10 million in 10-year, 10-percent callable bonds payable when the market rate is
12%. Interest is payable on May 31 and November 30. Bond discounts and premiums are amortized at each interest
payment date and at year-end. The company’s year ends at December 31. The bonds were called on December 31,
2021 at 102. The bonds are amortized using the effective interest method.
4.1 Compute for the issue price of the bonds. 8,852,950
4.2 Compute for the total interest expense for the year 2020. 620,018
4.3 Compute for the carrying amount of the Bonds Payable as of December 31, 2020. 8,889,635
4.4 Compute for the total interest expense for the year of 2021 1,068,760
4.5 Compute for the gain or loss on the date of retirement. Use negative sign if your answer is loss 1,241, 605