FAR Quizzers For Post Test And Term Examination

24問 • 1年前

問題一覧

1. KABUTO Company purchased a vehicle costing P2,500,000 on January 1, 2023. The useful life in years is 5 years while the useful life in miles is 100,000 miles. The vehicle has a residual value of P500,000. Actual miles driven in 2023, 2024 and 2025 were 30,000, 20,000, and 15,000 respectively. What amount of depreciation for 2024 should be reported using sum of the year’s digits?

C. P533,333

2. A new machine was acquired by SHROOMISH Company on March 31, 2021 with the following consideration: Carrying value of old machine given up with current fair value of P230,000 — 200,000 Notes payable (non-interest bearing; 3 years; effective rate on this date 9%) — 600,000 Estimated cost to be incurred after 5 year life of the machine to dismantle the asset (at 9% effective rate) — 40,000

B. P719,307

3. On December 31, 2023, FEEBAS Co. purchased an equipment with an estimated useful life of 10 years. The equipment was expected to have a residual value of P5,000 at the end of its service life. The SYD method was used in computing depreciation. For the year ended December 31, 2027, the depreciation applicable to this equipment was P42,000. What was the acquisition cost of the equipment?

D. P335,000

CRANIDOS Company exchanges an old automobile with a carrying amount of P 135,000 (original cost is P550,000) fora molding machine owned by YANMA Company. The molding machine is carried in YANMA Company's books at a cost of P240,000 with an accumulated depreciation of P83,000 at time of exchange. 4. Assume that no cash is involved in the transaction and the fair value of the automobile is not readily determinable. The fair value of the molding machine is PI 72,800. How much is the gain or loss on the exchange of CRANIDOS Company and YANMA Company, respectively?

D. P37,800 gain and P15,800 gain

CRANIDOS Company exchanges an old automobile with a carrying amount of P 135,000 (original cost is P550,000) fora molding machine owned by YANMA Company. The molding machine is carried in YANMA Company's books at a cost of P240,000 with an accumulated depreciation of P83,000 at time of exchange. 5. Assume that the fair values of the automobile and the molding machine are P145,000 and P150,000, respectively. In addition, CRANIDOS Company paid P5,000 to YANMA Company to complete the transaction. How much is the gain or loss on the exchange of CRANIDOS Company and YANMA Company, respectively?

A. P10,000 gain and P7,000 loss

On January 1, 2023, FLOETTE Company purchased an equipment from a supplier which trade discount of 10%. An additional 5% cash discount if the account is within 30 days from the date of invoice. The equipment will be used for 8- years with residual value of P300,000. FLOETTE Company paid the invoice on February 28, 2023. Information related to this acquisition were as follows: Cash paid to the supplier of equipment = P5,500,000 Freight, unloading, and delivery charges of the equipment acquired = 230,000 Custom duties and other charges = 400,000 Allowances and hotel accommodation paid to foreign technicians during installation and test run of equipment = 920,000 6. How much is the initial cost of the equipment acquired and the amount of depreciation expense in 2023 assuming FLOETTE Company uses SYD?

B. P6,775,000 and P1,438,889

On January 1, 2023, FLOETTE Company purchased an equipment from a supplier which trade discount of 10%. An additional 5% cash discount if the account is within 30 days from the date of invoice. The equipment will be used for 8- years with residual value of P300,000. FLOETTE Company paid the invoice on February 28, 2023. Information related to this acquisition were as follows: Cash paid to the supplier of equipment = P5,500,000 Freight, unloading, and delivery charges of the equipment acquired = 230,000 Custom duties and other charges = 400,000 Allowances and hotel accommodation paid to foreign technicians during installation and test run of equipment = 920,000 7. Statement 1: The carrying value of the equipment as of December 31, 2024 if FLOETTE Company uses double declining balance method is P3,810,937. Statement 2: The carrying value of the equipment as of December 31, 2024 if FLOETTE Company uses straight-line method is P5,081,250.

A. Only statement 1 is true

8. On June 30, 2022, ROCKRUFF Equipment Inc. purchased a precision laser-guided steel punch machine that has an expected capacity of 300,000 units and no residual value. The cost of the machine was P450,000 and is to be depreciated using the units-of-production method. During the six months of 2022, 24,000 units of the product were produced. At the beginning of 2023, engineers estimated that the machine can realistically be used to produce only another 230,000 units. During 2023, 70,000 units were produced. How much is the amount of depreciation expense in 2023?

B. P126,000

On June 30, 2022, VAPOREON Company reported the following information: Equipment at cost = 30,000,000 Accumulated depreciation = 10,500,000 The equipment was measured using the cost model and depreciated on a straight-line basis over 10-year period. On December 31, 2022, the management decided to change the basis of measurement from the cost model to the revaluation model. The equipment was revalued at the fair value of P27,000,000 with no change in useful life. The income tax rate is 25%. 9. What amount should be reported as depreciation for 2023?

A. P4,500,000

On June 30, 2022, VAPOREON Company reported the following information: Equipment at cost = 30,000,000 Accumulated depreciation = 10,500,000 The equipment was measured using the cost model and depreciated on a straight-line basis over 10-year period. On December 31, 2022, the management decided to change the basis of measurement from the cost model to the revaluation model. The equipment was revalued at the fair value of P27,000,000 with no change in useful life. The income tax rate is 25%. 10. What amount should be reported as revaluation surplus on December 31, 2023?

C. P5,625,000

11. MAUSHOLD Corp. provided the following information relating to the revaluation of an equipment on January 1, 2023 Equipment Cost - P6,500,000 Replacement Cost - P9,200,000 Residual value Cost - 500,000 Replacement Cost - 200,000 Useful life Cost - 12 Replacement Cost - 0 Age of the equipment Cost - 2 Replacement Cost - 0 Accumulated depreciation Cost - ? Replacement Cost - ? The equipment was sold on December 31, 2023 for P8,000,000. What is the revaluation surplus on December 31, 2023?

A. P1,980,000

12. On January 1, 2023, KLEFKI Co. acquired a machine for P20,000,000. KLEFKI Co. estimated a useful life of 10 years and a residual value of P1,000,000 and used the straight-line method of depreciation. In 2026, KLEFKI Co. changed the depreciation method to the SYD, and the estimates of useful life and residual value to a remaining 5-year useful life and P800,000, respectively. On July 21, 2028, KLEFKI Co. sold the machine for P4,500,000. KLEFKI incurred selling costs of P50,000. KLEFKI Co. prorates full-year depreciation on the basis of the nearest month. How much is the gain or loss on the sale?

D. (P175,000)

13. FENNEKIN Company had the following property, plant, and equipment acquisitions during the year 2023: • Acquired building with a fair value of P8,000,000 in exchange for 60,000 ordinary shares with a par value of P100 per share and a quoted price of P150 per share. • Exchanged an old packing machine which cost P2,000,000 and was 40% depreciated, for a new machine and paid a cash difference of P250,000. The fair value of the old packing machine is determined to be P1,700,000. Cash flows from the assets are not expected to be significantly different. • Purchased land at the beginning of 2023 for P2,000,000 for a noninterest bearing note requiring four payments of P500,000. The first payment was made at the beginning of 2023. The implicit rate for this note at the date of issuance was 10%. The present value of an ordinary annuity of 1 at 10% is 3.17 for 4 periods while the present value of an annuity in advance at 10% is 3.49 for four periods. What is the total cost of the property, plant, and equipment?

B. P11,195,000

14. PHEROMOSA Company made the following expenditures during the year 2023: Continuing and frequent repairs = 300,000 Repainted the plant building = 200,000 Major improvements to the electrical wiring system = 450,000 Partial replacement of roof tiles = 250,000 Service contract on office equipment = 100,000 Crane for assembly department to speed up production = 600,000 What total amount of expenditures should be capitalized?

D. P1,050,000

15. On December 1, MEW Corporation exchanged 2,000 shares of its P25 par value ordinary shares held in treasury for a parcel of land to be held for a future plant site. The treasury shares were acquired by MEW at a cost of P40 per share, and on the exchange date the ordinary shares of MEW had a fair value of P50 per share. MEW received P6,000 for selling scrap when an existing building on the property was removed from the site. Based on these facts, the land should be capitalized at?

C. P94,000

A summary of the fixed assets owned by YANMEGA Manufacturing Company is presented below: Total cost Factory building P4,800,000 Machinery & Equipment P1,400,000 Small Tools P82,000 Patterns P53,000 Est. residual value Factory building 300,000 Machinery & Equipment 80,000 Small Tools 5,000 Patterns - Est. useful life Factory building 40 years Machinery & Equipment 20 years Small Tools 8 years Patterns 4 years 16. The composite life of the assets listed above is

A. 29.5 years

A summary of the fixed assets owned by YANMEGA Manufacturing Company is presented below: Total cost Factory building P4,800,000 Machinery & Equipment P1,400,000 Small Tools P82,000 Patterns P53,000 Est. residual value Factory building 300,000 Machinery & Equipment 80,000 Small Tools 5,000 Patterns - Est. useful life Factory building 40 years Machinery & Equipment 20 years Small Tools 8 years Patterns 4 years 17. What is the composite rate of the assets listed?

A. 3.18%

18. MAGNEZONE Company provided the following data related to an equipment on January 1, 2023, the date of revaluation: Equipment Cost = 6,500,000 Replacement Cost = 9,200,000 Residual Value Cost = 500,000 Replacement Cost = 200,000 The equipment has a total useful life of 12 years and is already 2 years old on January 1, 2023. On December 31, 2024, the equipment was sold for P8,000,000. Ignore the effect of taxes. What amount of revaluation surplus should MAGNEZONE report on December 31, 2024, before the sale?

D. P1,760,000

19. INTELEON Inc. engaged in manufacturing business, purchased equipment for P300,000 on January 1, 2022 to be used in its operations. The equipment was estimated to have a useful life of 8 years, with salvage value estimated at P30,000. Among the various methods of depreciation, INTELEON selected the SYD method. On December 31, 2023, the related accumulated depreciation should have a balance of

C. P45,000 greater than the straight-line method.

20. Dreamer Company purchased on October 1, 2023 an equipment for P800,000. The equipment had an estimated useful life of 8 years. The estimated salvage value was estimated at P50,000 at the end of its useful life. The equipment is being depreciated using the double-declining balance method. What is the amount of depreciation to be charged against 2024 income?

D. P187,500

21. On January 1, 2023, CLEFABLE Company purchased a machine for P7,200,000. The machine was depreciated using the straight line method based on a useful life of 10 years with no residual value. On January 1, 2025, the entity changed to the sum of the years’ digit method. Which of the following statements is / are false? Statement 1: A change in depreciation method is accounted for prospectively. Statement 2: The depreciation for the year 2025 is P1,280,000. Statement 3: The carrying amount on December 31, 2025 is P4,320,000.

D. Statements 1 and 2 are false

22. An entity has the following items of PPE used in its mining operations: Cost Building = P15,000,000 Equipment = P6,000,000 Economic life Building = 15 years Equipment = 5 years Benefit consumption Building = Evenly over time Equipment = Depends on use The entity expects to deplete the mineral reserves of 200,000 tons in 10 years. The building will be of no use after the mineral reserves are depleted. 18,000 tons have been extracted in the current year. Compute current year depreciation for building and equipment.

C. P2,550,000

23. SCRAGGY Company purchased a land with a dilapidated building for a total purchase price of P10,000,000. The following costs were incurred relating to the purchase and construction: Title clearance fees, P250,000; surveying, P100,000; cost of leveling ground P150,000, construction materials P5,000,000; direct labor costs of construction P2,400,000, cost of tearing down the old dilapidated building P300,000, architects fees P450,000, construction permit P200,000, cost of centralized building cooling system, 1,000,000. SCRAGGY received P80,000 from the sale of salvaged materials from the old building. What is the total cost of the building?

B. 9,270,000

24. On the date of revaluation, ZUBAT Company has a building costing P7,500,000 with a fair value of P9,000,000. The building has a useful life of 40 years and is now 25% depreciated. The income tax rate is 25%. What is the revaluation surplus to be reported one year after the date of revaluation?

C. P2,446,875

PART II: THEORY OF ACCOUNTS (FAR FINALS)

Mark Anthony Germono · 16問 · 1年前

PART II: THEORY OF ACCOUNTS (FAR FINALS)