cPAiREVIEWSCHOOLOF 'i-HL,i ltlanila i,PRACTICALATICOLINTIN(IPRI)BIElvtS1iFinal PreboardExanrination ISETAPHIi-iT,PINESIiurrcia.y,'.September1 5. 201 312:00p.m.to 3:00p.m,IMULTIPI,ECHOICE:MARKFULLYwithPencilNo. 2 thelettet'oiy',rt"rrchoiceort tlteanswersheetprgvided. Makethe rnarkDARK butdo not usetoo tnucli pressure.ERAS{JR-ESA}18 STP-ICTIY NOTALLowED I IiLBraveCompanyieased eluiprnentto Fright Cornpanyon.ia,tLlarl' t,?tti-j. The leaseis foi aneigfit-vear ieriod e>piringLierrer:.,t,,:r:,1"2020.T'hefir'sio;'cight eq;alannual paymentl_ofP900.000 was made on January 'i.2{,li.il-trrr,'e iia,j purchasecltheequipnienton December29.2A12lor P4.800"0fi0.fhe lease is appropriately6sgc'rnteclfur 3s I srile:r-|'';peleaseby Brave.1'hepresentvalueai.lanuirrv1^2Al3,lfminirnumleaseo;tiittii'1:.{]\tn "tr iea:;e tet'm drscountedar a l{)o,.0irrterest rate w*iasP5.2X0.(){,)1. \.[he1 atrO']lii i;l'ir-.i;r*si r.r\;enulshuirld Braverecord in2Lri4as a resultof tlie leabe'JlltllIlri2. Hug Companyleasedeqilippent to RaveCompanyionh,'ir,i' i..-iiil. fhe ii:aseexpireson $4a1'1. 2014.Ravecoulclhavetought theequip,r',.iti,on,L,rig tor i'-1.200.i-)COinstead of'leasin!it'Hug'saccountingrecordbshoweda carr;,,ir-rgaini'-'hnttbr ih; equipn:elion \4iry1.2013 ofP2.800"000.Hug'sdepre;^iationon the equifmeni in 2rl1.i r a; i''lriO.'l{)U. Durir-rg2013.Ravepaid P720.000in rentals to Hug for the 8-moitthperiod.flug incurrec i;rainti.'nance andotherrelated costs uncl.erthetenns of the lease of P60.0t10 in 2Ll1-1..'\iterthr,:lease expires.Hug willleasethe equipmenfto anotherentityfol two r,,eats. Whei amolrr-rl of .rei i'l.:rJ:-ncshouldHugrecognize for 2013 ?a. i0().U0(tb. 360.000 rc. 660.000 id. 720.000 |l3. CarciaC'ompanl,iserpJriencingt)nancialilificirJtics,,ritl-,.il'!. llank.Carcia negoliated with.lPEancl arrive,.l at ati agft(:nteelto ies.trir(tur'. il. ir(,Lr):'fi , .' rt .h ' cn,l 'rr'the current period'Garcia or'ledJPE a noterwitli p'incipalan't,;'itli c'l'l'lii.]{' ii'' "-i it( t-t';ii in:ereu^rliP960'000'Basedon theagreelnent.JPE will accept e0uipriieiitvriiir l, i;,;i''alu.:rrl I'1.600.000and a'notereceir,able: tiornGarcia'scustoiner with carr;ving aino'i11L'a i'b.C,,)i',ifi'.rii v.;as detetminedthatthe equipment had been acq.uiredat P2.,5t)0,C00iviitrit i-611"tr0.'r,)i't:ridurivaiue ancl had been30%depreciated at the endoicurrent pi:r:icci.t,ri':rrt atlolilr!,-ri.:".; 'i-!,r ..:."'r;.igitlsh:-'tt,tlttllclebtshouldGarciarecognize'/a. '1.i60.000b. r"560.000c. q60-000d.04.On Decernber1.20i3" Ban (iontpar-iy exc[ian;;ci.l -i0.1'r.)Csl.ii]rt.,,t.,t'it,; Ftd par',aiue t-rrdinat']shiireshelrlin rreasllt)i ltlr a useil rnachine. |he rri:its,,rr\'s.r1rc-' \'vtr'i i.r(-,itrireclhy Ban at a costofP40pcrshareandare accortnted f-or itndrl il:ec,)si !lr.r';ir():1.()it th,.: datc ofexchange.theordinary'shareshada tair value ol'F55 pel shar*"bui t'r:',i-,?it':,',n,ereoriilinallyissued at P30per share.What is the total increax ii: eqi;rl',:j:lc ri:-r'ili Dlil-r,:: e:ichilng;')ja. ,-t90.000b. .+i30.0t)0 ic.438.00011. l9l 800,ia. I "800.00Ub1.600.000c. 2.200.i.t00d,600.0005. ToroConrpanyrepoftedP6.750.000inc,.lmebefore provisionfor incometax'provisionfbr incometax. the fbllowing dataare prtli'idedtbr 2013:Rentreceived in adr anceInconte fromexemptn-iunicipal bondsDepreciationderluctionfbr inct'rme tax purposesin excess of depreciationreported for financiaIaccounting plliposesEstimated tax payrnent for 2013Enactedcorporateincometax rateWhatan.rountof currenttax liabilitl' shou;C tie reFortedon December3 1 ' 201 3?a1.315.000b. i.700.000ci.915.000d" 2" r60.000On.lanuarl,'1.2013priorto PAS 19R.ito;c {'ci1ipa.n1 provided the tbllou'ingdatainwith its detlnedbenetit plan:Fair value of planassetsUnamortized past servicecostProjected benefitobligationTl-reremainingvesting periodfbr employ;l:"i:l0'rtredby tl-re past serlice c^ostis 5enrityactopteJPAS lidon January1,20ii. Transactionsaffectingthe plan for 2013Currentservice costContributionto the PlanBenefitspaid to retireesActualreturn on planassetsDecreasein PBOdueto changesin actuarialasclttlrpticnSSettlement interestrateWhatamountshouldbe reporteclas prepriti ('t .ttcit.rcL'l henefltcrston December31' 2013'la, .I.400.000 prepaiclb,1.400.000accruedc.600.000prepaidd.600.000accruedGarboCompany ow,ned40,000 sharesef f)r I C'ompany'sP5 i::ir viilue orCinari'shares'Theseshareswerepurchasedin 2011 fc,r i:360.00C.On September 15. 201i. Garbodeclaredaproper-tldividendof oneshareot'Owl firr i\';1",, ten shares of Garboheld by a shareholder'Onthat date. the marketpriceof Ow! u,as i'28 pii shirreandthere were 360.000 sharesof Carbooutsta.di.g.on December31.2013.thg,-111,i;i.rirl was distributeclto the shareholders';rhen themarket,,,alue of the Or,ry,lshare u,,asP2i.vVhat net,recir-ictionin rclaittedcarnings would resultfiom thi; picpcrt) 'lii'iclcnd irr l'-'11'.'a. 1.r108.000h.900.000c.360.000d,324.000$/itt Companyhad outstanding 300.00Corciinar',sltaie:;oi P20 par vallteand 60.000no-par89/opreference,i,ur., with a stated vahre r:i- P.;,i).lhe prefbrencesharesare cumulative andnonparticipating,Dividendshave been paidin evcryyearexceptthe pasttwoyearsand thecr.rrrent year. The entitydeclared P630,000as dividendsto be disiributedin the current year'Whatarnount of dividends u,ill the ordinarlishai'eholdersreceive?a. 210.000b. 420"000c. 6-10.000d0To compute1.200.0001.500.000750.000375,0003A%connectloni 0.000"000i.000"0001 3.000.000years. I'heare:2.500"0003.500.0003.000.0001.500.000400.00010%o.7.8.l,9. On January1.2013"GortiCornpanygrarrterJ an e,npl{p'eean cDri,rl1o blt', 2rJ0.00CGotti shajesfor P30pershare. The optionsare exercisable rp;1: year:,fron: ,lrte oi'',c,ting. Usinga tairvalue opiion pricingmoa{i.totalcompensationexppnseis detrirninedio be F 1,800,000.Theemployeeexercisedthe o$tion onJanuary1,2016.and sold the 200,000 shareson December31.2016. Quoted market prices of Gotti sharesciuring 20i3tor.lanualr' 1. September1 andDecentberI wereP30.Pl6 andP40 re:;pcctiveiy. TheservicepeiioC rs fcr,'tw'i .vea"s beginningJanuaryl" 2013.Wiratantountolccnrpensationexpt'nse siioltl,J be recc,gnizedior ZAt3':a. 1.200.000h.600.000c.900.000di60.00010. On January 1. 2011, Sr.iaveCompanl'ettrl''l;sherla shateap;,reciation rights plan for itsexecutives. It entitlerJthehto receive g2..rl-, fpr the Ciiferetlc-'beivieentne mal'ketpriceof ltsordinary shares and a pr{-establish*d priceof P2.A or: fr0,i}00 rights.Tlreshareappreciationrightsare exercisableon Jfnuary1.2017.Cui'rentrnarketprices ol'tlie shares are P20" P38.P30.P33and P28 on.lanuaryfi. ZOt3"December.ji. 2018.Decrniher31.2til4,l)ecember ii.20i5andL)ecember31.20i5reispectivel5,.Whatamounto1'accrireCliahilltl'shouki be recognizedlonDecember 31,2014'?tiI!.qt,.c.s40.000270"0003C0.00001i. EdgarC'ompanyreported shareltoiders' q:qriitl rrn l)i.-r*",):ier-i1. 20 3 whirh comprisedthefollowingcapital balances:Pref-erencesharecapital.12'14i;urrt,:l;'.!"'grnc !,rIil'tii.',i',,1Pi00 par.25.000sharesOrdinary share capital"P50par"10C.000shaielS hare premium-preferenceShare premium-ordinaryRetainedearningsThe pref-erence dividendsare in arrea,rsfl;r zL01,l:nJ.l01l;ri.ijlir,: pre :i:-;n"'e s,lar'- has a calipriceandliquidation value,tflPllti arrt1 Pliil. resp.c;i",elv ',r'tr;-i i-rihe Lrrll,.','rllrie purordinarvshareon DecemhcrI l. l0ll'lu7(-l.-i0it. / i )t)c. 7 4.40d. 75.5012. On December.ll.20ii. Vine Compan'.,hari2tr0 0[lr.i or'.rinr,.; ';ha;errujti'P10 par value and10.000 49"'0'P1'J0par value c'rl'llrrIliti;'" i'''-'"'r-''llr:r- cfai{''s 'ji rr ?h'1 r]t "'l't rJilidends weredeclaredon eitherthe pret-erericcoi o'dinJ:.,,silr.r,:s,r, ,1-,,' I .l. .':.''ir.r n Iirbrua;"yi0" 2015.prior to the issuanceof thefrirancial sialemei-rti i,.;l' r.l-i' ,. r' ,::ilt::iI-:,.:'.::nrber 31, 2014.theentity declareda i000,,1,stcck spiii,,i, ir.s orrlin:r.,'shr.t'c:. l';', i'.1;;::11giul 2.01jand2014 wasP600.000and i)720.000respeclivel,v.ln ,1".,r;1.r)l i'-'"r,r;-';frl,'"';; +in.rncial staiemenis.whatamountshouldbe reportedas basicearnillgs;)c1'shir.r l) r '' . l, | -r':'l2.500.0005.000.000500,0001.000.0002,100,000a. 3.40b. 2.80c. 1.70d1401-lJ.on December31.2013'ja.2.95b.3 "09c.1.00d.3.1714.MoldCompanydisclosedthe ibllorvingclranges in the ilccountbalancestbr the current year:cash 3i:'?99 decreaseAcc.ur1tsreceivable 199"?99 increa$eInventory 2'500'000 increalieAccour-its payable 170'000decreiei-During the year"the entity borrowedP2.5/1-)0"000 in noteslrom a bankand O?t*ll^':t::l:'lP1.000.000 and itlterest of Pi50.000.Int'.:r;'stcri P75.000is accrttcdat lear-end' lhere*.utlloaccruedinterest at the beginrring of thr: ;-ear. T'he owner transf'erredtradir-rgsecurltles to tnebusir-irssandtheseweresol