Final June 2020 PDF

Preview

Summary

Name:_________________________________________ Rating: ____________Year/Section: _______________ Date: _____________ACCOUNTING 10 AND 11 Final ExaminationsMultiple Choice. DIRECTIONS: Write the letter of your answer on ¼ sheet of yellow paper or any paper, following this format. Take picture of your...

Description

Name:_________________________________________

Rating: ____________

Year/Section: _______________

Date: _____________

ACCOUNTING 10 AND 11

Final Examinations

Multiple Choice. DIRECTIONS: Write the letter of your answer on ¼ sheet of yellow paper or any paper, following this format. Take picture of your answer sheet and send it through my messenger (PM). Deadline of submission will be on June 15, 2020. NAME: ____________________________________ SECTION: __________________________________ SUBJECT___________________________________ 1. A 2. A 3. A 4. A 5. D 6. D 7. C 8. C 9. C 10. D

11. A 12. B 13. B 14. D 15. B 16. B 17. A 18. B 19. C 20. C

1. Which of the following are the essential characteristics of an intangible asset? a. Identifiability, controlled by the enterprise, and expected future economic benefits b. Separability, controlled by the enterprise, and indefinite useful life c. Identifiability, owned by the enterprise, expected future economic benefits, and definite useful life d. Identifiability, controlled by the enterprise, expected benefits and indefinite useful life 2. Farm lots held by an entity engaged in agriculture are classified on the entity’s statement of financial position as a. property, plant and equipment b. B agricultural asset c. agricultural produce d. biological produce 3. Which of the following items shall not be classified as an intangible asset? a. Equity investments b. Leasehold c. Franchise d. Patent 4.

A non-current asset classified as “held for sale” must be presented in the financial statements a. in a separate line item in the current assets section b. in a separate line item in the non-current assets section c. among the non-current, non-financial assets

d. only in the notes 5. Which of the following assets does not have the characteristic of exchangeability? a. Copyrights b. Franchise c. Patents d. Goodwill 6. Which of the following items should not be amortized over the periods of estimated benefit? a. Computer software b. Franchise right c. Patent right purchased from an investor d. Goodwill arising from the purchase of an existing business 7. A biological asset is a. a living plant or animal and the land on which the plant is attached b. a living plant or animal held by a company engaged in manufacture of industrial goods c. a living plant or animal held by an enterprise engaged in agricultural activities d. any asset owned and controlled by an entity engaged in an agricultural activity 8.

The change in fair value less estimated cost to sell of a biological asset shall be a. taken to equity under the heading comprehensive income b. taken to equity until such date that the asset is disposed c. taken to profit or loss during the period in which the change arises d. ignored

9.

Assets designated as held for sale must be measured at a. carrying amount b. lower cost and carrying amount c. lower of carrying amount and fair value less cost to sell d. cost

10. An entity shall classify a non-current asset as held for sale if a. if the asset is intended to be disposed of through a sale transaction or abandonment b. its carrying amount will be recovered through a sale transaction or continuing use c. its carrying amount will be recovered through continuing use d. its carrying amount will be recovered through a sale transaction 11. Which of the following research and development related costs should be capitalized and amortized over current and future periods? a. Labor and material costs incurred in building a prototype model, after establishing technological feasibility b. Research findings purchased from another company to add a particular research project currently in process c. Cost of testing equipment that will also be used solely in the current year research and development project d. Administrative salaries allocated to research and development

12. Biological assets are measured in the statement of financial position at a. fair value b. fair value estimated cost to sell c. cost less accumulated depreciation and accumulated impairment losses d. purchase price plus transaction costs 13. An item of property, plant and equipment qualifies to be reported as “Held for Sale”. Its fair value less cost to sell exceeds its carrying amount at the date it is reclassified as Held for Sale. For accounting purposes, such an excess shall a. be recognized as gain in profit or loss b. be recognized as gain in other comprehensive income and transfer to profit or loss at the date of actual disposal c. not be accounted for d. be credited directly to retained earnings 14. A living plant that is used in the production or supply or agricultural produce, is expected to bear produce for more than one period, and has a remote likelihood of being sold, except for incidental scrap sales, is most appropriately presented in the statement of financial position as part of a. inventories b. biological assets c. agricultural assets 15. An entity moved to a new building. The old building is being actively marketed for sale, and the entity expects to complete the sale in four months. Which of the following statements is incorrect regarding the old building? a. It will no longer be depreciated b. It will be measured at historical cost c. It will be classified as a current asset d. It will be reclassified as an asset held for sale 16. Fancy Manufacturing Company acquired three patents in January 2019. The patents have different lives as indicated in the following schedule:

Patent A Patent B Patent C

Cost P125,000 P272,500 P656,200

Remaining useful life (Years) 10 5 Indefinite

Remaining legal life (Years) 17 7 17

Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2019, the company unsuccessfully attempted to defend its right to Patent B. Legal fees of P127,000 were incurred in this action. The company’s policy is to amortize intangible asset by the straight-line method to the nearest half-year. The company reports on a calendar-year basis. How much is the patent amortization expense for the year ended December 31, 2019. a. P39,750 b. P78,350 c. P84,880 d. P105,600

17. Mango Corporation bought Patent A for P40,00 and Patent B for P60,000. Mango also paid acquisition cost of P5,000 for Patent A and P7,000 for Patent B. Both patents were challenged in legal actions. Mango paid P20,000 in legal fees for a successful defense of Patent A and P30,000 in legal fees for an unsuccessful defense of Patent B. What amount should Mango Corporation disclose as total cost of its patent on the year-end statement of financial position? a. P45,000 b. P65,000 c. P112,000 d. P162,000 18. On January 2, 2019, Tuna Company purchased Salmon Company at a cost that resulted in recognition of goodwill of P1,000,000, having an expected benefit period of 10 years. During the first quarter of 2019, Tuna spent an additional P400,000 on expenditures designed to maintain goodwill. Due to these expenditures, at December 31, 2019, Tuna estimated that the benefit period of goodwill was 20 years. In its December 31, 2019 statement of financial position, what amount should Tuna Company report as goodwill? a. P1,400,000 b. P1,000,000 c. P950,000 d. P900,000 19. On January 1, 2019, Vase Company classified noncurrent assets as held for sale that had a carrying amount of P2,500,000. On this date, the assets are expected to be sold P2,300,000. Reasonable disposal cost to be incurred upon sale was expected at P100,000. As of December 31, 2019, the asset had not been sold. After considering its options, management decided to put back the noncurrent asset for use in operations. On that date, Vase’s financial managers estimated the noncurrent asset was now expected to be selling at P2,100,000 with the disposal cost of P50,000, while depreciation for 2019 was computed at P500,000 if the noncurrent asset was not classified as held for sale. At how much should the asset be recorded upon reclassification as “held for use” on December 31, 2019? a. P2,500,000 b. P2,200,000 c. P2,050,000 d. P2,000,000

20. A group of twenty 2-year old cattle was held at January 1, 2019. On this date, five 2-year old cattle were purchased for P12,000 each and 5 calves were born. No cows or calves were disposed of during the period. Per unit fair values less cost to sell were as follows: January 1, 2019 2-year old cattle Newborn cattle December 31, 2019 2-year old cattle 3-year old cattle 1-year old cattle Newborn cattle

P12,000 4,000 13,000 15,000 7,000 5,000

The company records separately the increase in fair value less cost to sell due to physical change and change in fair value less cost to sell due to price change. How much shall be taken to profit or loss as a gain arising from change in fair value due to physical change? a. P30,000 b. P60,000 c. P80,000 d. P110,000

STAY SAFE AT HOME

Prepared by: FELECITAS C. TUAZON...