2019 Int Acc Vol 3 Ch 1 Answers PDF

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CHAPTER 1 PROVISIONS, CONTINGENCIES AND OTHER LIABILITIES Problems The following shall result in the recognition of liabilities a, c, e, g, h, i, m, n, o, p Case Case Case Case Case Case (Garfield Company) B x (b) B B ) B .08B B P592,593 B .08 T ) T .30 B ) B .08 .30 B ) B .08 B .024B B P459,016 B ....

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CHAPTER 1 PROVI SI ONS,CONTI NGENCI ESAND OTHER LI ABI LI TI ES Pr obl ems 11.

Thef ol l owi ngshal lr esul ti nt her ec ogni t i onofl i abi l i t i es a,c,e ,g,h,i ,m,n,o,p

12.

Case1–None Case2–P800, 000 Case3–P400, 000 Case4–P350, 000 Case5-P100, 000=( 1M x10%)+( 200, 000x30%)–60, 000 Case6-None

13.

( Gar fiel dCompany) ( a)

B =8, 000, 000x8% =

P640, 000

( b)

B =8% ( 8000, 000–B ) B =640, 000-. 08B B =640, 000/1. 08 =

P592, 593

B =. 08( 8, 000, 000–T) T=. 30( 8, 000, 000–B ) B =. 08{ 8, 000, 000-. 30( 8, 000, 000–B )} B =. 08{ 8, 000, 000–2, 400, 000+. 30B} B =448, 000+. 024B B =448, 000/0. 976=

P459, 016

B =. 08{ 8, 000, 000–B –T} T=. 30( 8, 000, 000–B) B =. 08{ 8, 000, 000–B -. 30( 8, 000, 000–B) } B =. 08{ 8, 000, 000–B –2, 400, 000+. 30B} B =448, 000-. 056B B =448, 000/1. 056=

P424, 242

( c)

( d)

14.

( Ar t hurCor por at i on) a.

Bonust osal esmanager=. 08x3, 000, 000 Bonust oeachsal e sag ent=. 06x3, 000, 000

= =

P240, 000 P180, 000

b.

Tot alBonus=. 36{ 3, 000, 000–B –T) T=. 30{ 3, 000, 000–B } B =. 36{ 3, 000, 000–B -. 30( 3, 000, 000–B) } B =. 36{ 3, 000, 000–B –900, 000+. 30B} B =756, 000-. 252B B =756, 000/1. 252 =603, 834( t ot al ) B( Eac h) :603, 834/3

=

P201, 278

B =. 32{ 3, 000, 000–B } B =960, 000-. 32B B =960, 000/1. 32=727, 273( t ot al ) B( Sal esManager ) :727, 273x12/32 B( Eac hSal esAgent ) :727, 273x10/32

= =

P272, 727 P227, 273

c .

15.

( Cl evel and,I nc. ) B =. 06{ 9, 000, 000–B –T} T=. 30( 9, 000, 000–B) B =. 06( 9, 000, 000–B -. 30( 9, 000, 000–B )} B =. 06{9, 000, 000–B –2, 700, 000+. 30B } B =378, 000-. 042B B =378, 000/1. 042=362, 764 T=. 30( 9, 000, 000–362, 764)=

P2, 591, 171

Chapt er1–Pr ovi si ons,Cont i ngenci esand Ot herLi abi l i t i es

16.

( JacksonCompany) 2019

2020

2021

Sal eofpr oduc t Acc t s .Recei v abl e/Cash Sal e s

1, 000, 000 1, 000, 000

2, 500, 000 3, 500, 000 2, 500, 000 3, 500, 000

Ac cr ualofr e pai r s War r ant yExpe nse War r ant yLi abi l i t y

60, 000

150, 000 60, 000

150, 00

210, 000 210, 000

38, 000

112, 500 112, 500

0 Ac t ualr e pai r s War r ant yLi abi l i t y Cash/AP,e t c. 17.

8, 000

38, 000 8, 000

( Fi l mor eCompany) ( a) 2019 War r ant yLi abi l i t y ,Januar y1 War r ant yexpe nse( 8% x4, 200, 000) /( 8% x6, 960, 000) Ac t ualr e pai rc ost si ncur r ed War r ant yl i abi l i t y ,December31

P

0 336, 000 ( 148, 800) P187, 200

2020 P187, 200 556, 800 ( 180, 000) P564, 000

( b) On2019sal es( 4, 200, 000x5% x½) On2020sal es[ ( 1/2of3%)+5%]x 6, 960, 000 Pr edi c t edwar r ant yl i abi l i t yatDecember31,2020 18.

P105, 000 452, 400 P557, 400

( JohnsonCompany) ( a)

2019 Cash 720, 000 Unear nedRe v enuef r om War r ant yCont r ac t s 720, 000

2020 864, 000 864, 000

CostofWar r ant yCont r act s Cash,Mat er i al s ,e t c .

25, 000 25, 000

100, 000 100, 000

Unear nedRe venuef r om War r ant yCont r ac t s Re v enuef r om War r ant yCont r act s 20% x½ x720, 000=72, 000

72, 000 72, 000

266, 400 266, 400

20% x½ x720, 000= 72, 000 30% x½ x720, 000= 108, 000 20% x½ x864, 000= 86, 400 Tot alf or2020 266, 400 ( b)

Unear nedRe venuef r om War r ant yCont r ac t s,Dec .31,2019 ( 720, 000–72, 000) Unear nedRe venuer e cor deddur i ng2020 Rev enuer ec ogni z eddur i ng2020 Unear nedRe venuef r om War r antCont r act s,Dec.31,2020 or Fr om 2019c ont r ac t s 720, 000x65% Fr om 2020c ont r ac t s 864, 000x90% Tot al

( c) Rev enuef r om war r ant ycont r ac t s - see( a) Costofwar r ant yc ont r act s Pr ofitf r om war r ant ycont r act s 19.

2019 72, 000 25, 000 47, 000

648, 000 864, 000 ( 266, 400) 1, 245, 600 468, 000 777, 600 1, 245, 600 2020 266, 400 100, 000 166, 400

( Tyl erCor por at i on) ( a)

Pr emi um I nv ent or y Cash/Account sPayabl e

225, 000 225, 000

2

Chapt er1–Pr ovi si ons,Cont i ngenci esand Ot herLi abi l i t i es

1, 500x150 ( b)

Cash/Account sRecei v abl e Sal es

15, 000, 000 14, 062, 500

Unear nedRe venuef orPr emi um Cl ai ms

( c)

937, 500

Basi sofal l ocat i onofsal e spr i c eofmai npr oduc t Se l l i ngpr i ceofmai npr oduc t Se l l i ngpr i ceofpr emi um ( 1, 000, 000x40%) /100=4, 000x250 Tot al

1, 000, 000 16, 000, 000

Al l ocat i onofsal e spr i ce Tomai npr oduc t15, 000, 000x( 15M/16M) Topr emi um 15, 000, 000x( 1M/16M) Tot al

14, 062, 500 937, 500 15, 000, 000

Cash Unear nedRe venuef orPr emi um Cl ai ms Sal es 1, 000x50=50, 000 937, 500x( 1, 000/4, 000)=234, 375

15, 000, 000

50, 000 234, 375 284, 375

110. ( Pol kCompany) ( a)

Basi sofal l ocat i onofsal e spr i c eofmai npr oduc t Se l l i ngpr i ceofmai npr oduc t300, 000x30 Se l l i ngpr i ceofpr emi um ( 300, 000x30%) /20=4, 500x40 Tot al

180, 000 9, 180, 000

Al l ocat i onofsal e spr i ce Tomai npr oduc t9, 000, 000x( 9M/9. 180M Topr emi um 9, 000, 000x( 180, 000/9, 180, 000) Tot al

8, 823, 529 176, 471 9, 000, 000

9, 000, 000

Unear nedr evenuef orunr ede emedcouponsbe f or er ede mpt i on 176, 471 Reduc t i onr esul t i ngf r om r edempt i on 176, 471x( 4, 000/4, 500) 156, 863 Unear nedr evenuef orunr ede emedcoupons,December31,2020 19, 608 or176, 471x( 500/4, 500) ( b)

Addi t i onalsal e suponr ede mpt i on( seeabove)

156, 863

111. ( Tayl orCompany) NOTE: Pl easepr ovi det hesal espr i ceoft hemai npr oductofP500,mi ssi ngi nt hepr obl em. ( 1) 2019 Tot alsal e spr i c eofmai npr oduc t( 140, 000uni t sxP500) P70, 000, 000 Tot alsal e spr i c eofpr emi ums ( 40, 000+30, 000) /5=14, 000uni t sxP150 2, 100, 000 Tot al( basi sofal l ocat i on) P72, 100, 000 Al l ocat i on: Mai n ( 70/72. 1)x70M Pr emi um ( 2. 1/72. 1)x70M Tot al Pr ovi si onf orunr edeemedcouponsatt heendof2019 2, 038, 835x( 6, 000* /14, 000) * ( 30, 000/5)

P67, 961, 165 2, 038, 835 P70, 000, 000

P 873, 786

2020 Tot alsal e spr i c eofmai npr oduc t( 200, 000xP500) Tot alsal e spr i c eofpr emi ums ( 90, 00030, 000+80, 000) /5=28, 000uni t sxP150 Tot al( basi sofal l ocat i on)

4, 200, 000 P104, 200, 000

Al l ocat i on: Mai n( 100/104. 2)x100M

P 95, 969, 290

P100, 000, 000

3

Chapt er1 –Pr ovi si ons,Cont i ngenci esandOt herLi abi l i t i es

Pr emi um ( 4. 2/104. 2)x100M Tot al Pr ovi si onf orunr edeemedcouponsatt heendof2020 4, 030, 710x( 16, 000* /28, 000) * ( 80, 000/5)

( 2)

2019 Sal esofmai npr oduct P67, 961, 165 Redempt i onofpr emi ums Cashr ec ei v ed 8, 000x50 400, 000 18, 000x50 2, 038, 835x( 8, 000* /14, 000) 1, 165, 049 2, 038, 835x( 6, 000/14, 000) 4, 030, 710x( 12, 000* * /28, 000) _ _ __ __ _ __ __ _ Tot alr ev enue P69, 526, 214 * 40, 000/5=8, 000pr emi ums * * ( 90, 00030, 000) /5=12, 000pr emi ums

4, 030, 710 P100, 000, 000

P 2, 303, 263

2020 P95, 969, 290

900, 000 873, 786 1, 727, 447 P99, 470, 523

112. ( VanDepar t mentSt or e) ( a) Al l ocat i onofor i gi nalconsi de r at i onr ecei v ed: Sal esr e venue( 98% xP5, 000, 000) Li abi l i t yf orCus t omerLoyal t yAwar ds( 2% xP5, 000, 000) Rev enuei n2019asar e sul tofr ede mpt i on 100, 000x25/90

P4, 900, 000 P 100, 000 P

Rev enuei n2020asar e sul tofr ede mpt i on Tot alacc umul at edr ev enuef r om r ede mpt i onasof12/31/20 ( 100, 000x60/95) Le ssr ev enueear nedi n2019 Rev enuei n2020asar e sul tofr ede mpt i on

27, 778

P 63, 158 27, 778 P 35, 380

( b) Li abi l i t yasof12/31/19( 100, 000–27, 778) Li abi l i t yasof12/31/20( 100, 000–63, 158)

P 72, 222 P 36, 842

113. ( Pi er ceCor por at i on) Cash Unear nedRev enuef r om Gi f tCe r t i fic at e sOut s t andi ng Unear nedRe venuef r om Gi f tCer t i fic at esOut st andi ng Sal es

2, 000, 000 2, 000, 000 1, 280, 000 1, 280, 000

Not e: The gi f tcer t i fic at es es t i mat ed t o expi r ei sr ecogni z ed as r ev enue att he dat e ofact ual e xpi r at i on.

114. ( BuchananCompany) Cash Unear nedRev enuef r om Gi f tCer t i ficat esOut st andi ng

3, 000, 000 3, 000, 000

Unear nedRe venuef r om Gi f tCer t i fic at esOut st andi ng Sal es

2, 750, 000

Unear nedRe venuef r om Gi f tCer t i fic at esOut st andi ng Rev enuef r om For f ei t edGi f tCe r t i ficat e s

150, 000

2, 750, 000

150, 000

115. ( Li ncol nCompany) Re f undabl eDepos i t s,Januar y1,2020 Deposi t sr ecei v eddur i ngt hey ear

P250, 000 200, 000...