FAR PRB Finals Dec 2017.docx

P2,#20 P2$,+2 P22,#00 P26,$$# 1 pts Bailey Co. leased e@uip"ent to =reco, -nc. on anuary 1, 2016. /he lease is for an 4)year period. /he first eiht e@ual annual pay"ents of P600,000 !as "ade on anuary 1, 2016. Bailey had purchased the e@uip"ent on &ece"ber 2, 201# for P3,600,000. /he lease is appropriately accounted for as a sales)type lease by Bailey. Assu"e that the present *alue at anuary 1, 2016 of all rent pay"ents o*er the lease ter" discounted at a 107 interest rate !as P3,#20,000. >hat a"ount of interest inco"e should Bailey record in 201$ as a result of the lease;

P261,200 P320,000 P22,000 P32$,200 1 pts On &ece"ber 31, 201$, -ria Co"pany sold an e@uip"ent to aarao Co"pany for P4,000,000 and si"ultaneously leased it bac for 2 years. /he carryin a"ount of the e@uip"ent is P6,000,000 and the re"ainin econo"ic life is 10 years. >hat should -ria report as ain in its 201$ inco"e state"ent;

P2,000,000 P1,000,000 P#00,000 P200,000 1 pts li8abeth, a public li"ited co"pany, has ranted 100 share appreciation rihts to each of its 1,000 e"ployees in anuary 201$. /he "anae"ent feels that as of &ece"ber 31, 201$, 07 of the a!ards !ill *est on &ece"ber 31, 201. /he fair *alue of each share appreciation riht on &ece"ber 31, 201$, is P10. >hat is the fair *alue of the liability to be recorded in the financial state"ents for the year ended &ece"ber 31, 201$;

P10,000,000 P300,000 P100,000 P 0,000 1 pts

-n arri*in at its profit before ta for the year ended 31 &ece"ber 201$ /he yan Co"pany has accrued royalties recei*able of P200,000 and interest payable of P2#0,000. Both royalties and interest are dealt !ith on a cash basis in ta co"putations. >hat are yan's net te"porary differences at 31 &ece"ber 201$, accordin to PA12 -nco"e taes; /aable te"porary differences of P#0,000 &eductible te"porary differences of P+#0,000 &eductible te"porary differences of P#0,000 aable te"porary differences of P+#0,000 1 pts /he uan Co"pany has a non)current asset !hich had a carryin a"ount in the financial state"ents of P14,000 at 31 &ece"ber 201$. -ts ta !ritten do!n *alue 9the ta base: at that date !as P,000. /he ta rate is 307. -n accordance !ith PA12 -nco"e taes, !hat is the deferred ta balance in respect of this asset at 31 &ece"ber 201$;

P,000 asset P2,$00 asset P2,$00 liability P,000 liability 1 pts For the year ended &ece"ber 31, 201$, /alisay Co"pany reported accountin profit of P,#00,000. -ts taable profit !as P,000,000. /he difference is due to accelerated depreciation for inco"e ta purposes. /he inco"e ta rate is 3#7 and /alisay "ade esti"ated ta pay"ent durin 201$ of P1,000,000. >hat should /alisay report as current ta payable as of &ece"ber 31, 201$;

P3,1#0,000 P3,32#,000 P2,1#0,000 P2,32#,000 1 pts At &ece"ber 31, 201$ indoro Corporation?s taable profit is P#,000,000. /he follo!in ite"s are the te"porary differences that caused indoro?s inco"e in the inco"e ta return to differ fro" the a"ount reported in the inco"e state"ent Future deductible a"ounts epected to re*erse in 2014 of P+00,000 and future taable a"ounts epected to re*erse in 2014 and 201 of P#00,000 and P00,000, respecti*ely. indoro?s inco"e ta rate is 3#7. /he inco"e ta epense reported by indoro in its &ece"ber 31, 201$ inco"e state"ent is .

P2,100,000

P1,$#0,000 P1,+00,000 P1,$4#,000 1 pts /he Coral Co"pany applies the PF for s. On 20 uly 201$ Coral !ishes to classify a non)current asset as held for sale. At that date the asset's carryin a"ount !as P1+,#00, its fair *alue !as esti"ated at P21,#00 and the costs to sell at P1,+#0.

/he asset !as sold on 14 October 201$ for P21,200. -n accordance !ith PF for s, at !hat a"ount should the asset be stated in Coral's state"ent of financial position at 30 epte"ber 201$; P20,0#0 P21,200 P21,#00 P1+,#00 1 pts Ca"il Co"pany?s leder sho!ed a balance in its cash account at &ece"ber 31, 2016 of Php1,36+,#00, !hich !as deter"ined to consist of the follo!in

Petty cash fund Checin account in Iapa"ilya ban 9 chec of Php12,000 is still outstandin: 5otes recei*able in the possession of a collectin aency