Intermediate Accounting V3 Answer key PDF

Preview

Summary

CHAPTER 24SMALL AND MEDIUM SIZED ENTITIESChapter Exercises:Problem 24-1 MCQ(IFRS) D A D D .Problem 24-2 (Philippine SEC) 1. B 2. C 3. C 4. BProblem 24-3 MCQ(IFRS) 1. D 2. D 3. A 4. C 5. ACHAPTER 25SMALL AND MEDIUM SIZED ENTITIES – FINANCIAL STATEMENTSProblem 25-1 (IFRS)Required:SME Statement of Fina...

Description

CHAPTER 24 SMALL AND MEDIUM SIZED ENTITIES Chapter Exercises: Problem 24-1 MCQ(IFRS) 1. D 2. A 3. D 4. D . Problem 24-2 (Philippine SEC) 1. B 2. C 3. C 4. B Problem 24-3 MCQ(IFRS) 1. D 2. D 3. A 4. C 5. A

CHAPTER 25 SMALL AND MEDIUM SIZED ENTITIES – FINANCIAL STATEMENTS Problem 25-1 (IFRS) Required: SME Statement of Financial Position As of December 31, 2020 ASSETS Non-current Assets Property, plant and equipment P 3,520,000 Investment property 2,500,000 Total non-current assets 6,020,000 Current Assets Inventory 1,180,000 Accounts receivable 1,700,000 Cash and cash equivalents 230,000 Total current assets 3,110,000 TOTAL ASSETS P 9,130,000 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 1,500,000 Retained earnings 2,690,000 Non-controlling interest 730,000 TOTAL EQUITY 4,920,000 Non-current liabilities Long-term debt 1,800,000 Environmental restoration provision 280,000 Total non-current liabilities 2,080,000 Current Liabilities Trade payables 250,000 Accrued payables 200,000 Current portion of the long-term debt 500,000 Interest accrued on long-term debt 230,000 Warranty provision 400,000 Provision for vacation leave 450,000 Dividends payable 100,000 Total current liabilities 2,130,000 TOTAL LIABILITIES 4,210,000

TOTAL EQUITY

LIABILITIES

AND P 9,130,000

\ Problem 25-2(IFRS) SME Statement of Financial Position As of December 31, 2020 ASSETS Non-current assets Property, plant and equipment: Vacant land Land and buildings Plant Equipment Investment property Intangible assets Investment in associates Deferred tax asset Total non-current assets Current assets Inventories Trade and other receivables Prepayments Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital Treasury shares Retained earnings Other reserves Non-controlling interest TOTAL EQUITY Non-current liabilities Interest-bearing loans and borrowingsnoncurrent Government grants – noncurrent Deferred revenue Other long-term liabilities Deferred tax liability Long-term provisions Total non-current liabilities Current liabilities Trade and other payables

P 320,000 960,000 450,000 830,000 650,000 1,520,000 560,000 30,000 5,320,000 1,580,000 120,000 50,000 130,000 1,880,000 P 7,200,000

2,500,000 (400,000) 1,000,000 500,000 300,000 3,900,000 950,000 100,000 10,000 210,000 50,000 180,000 1,500,000 960,000

Interest-bearing loans and borrowings Government grants – current Deferred revenue – current Income tax payable Short-term provisions Total Current liabilities TOTAL LIABILITIES TOTAL LIABILITIES AND EQUITY

500,000 130,000 60,000 25,000 125,000 1,800,000 3,300,000 P 7,200,000

Problem 25-3 (IFRS) Required: SME Statement of Income For the year ended December 31, 2020 Revenue P 6,000,000 Less: Cost of goods sold (3,700,000) Gross margin 2,3000,000 Other income 100,000 Total income 2,400,000 Less: Expenses Employee benefit expense 800,000 Depreciation and amortization expense 400,000 Other expenses 80,000 Finance cost 120,000 Income before income tax 1,000,000 Less: Income tax expense 300,00 Net Income P 700,000 SME Statement of Retained Earnings For the year ended December 31, 2020 Retained earnings – January 2020 Correction of error due to under depreciation for the year ended December 31, 2018 Corrected beginning balance Add: Net income Less: Dividends paid Retained earnings – December 2020 Problem 25-4 (IFRS) 1. C COGS = P1,100,000 + 130,000 = P1,230,000

P 1,400,000 (650,000) 750,000 700,000 (150,000) P 1,300,000

P5,500,000 + 100,000 – 1,230,000 – 2,260,000 – 520,000 – 380,000 – 150,000 – 60,000 – 300,000 = 700,000 2. D 10,000 – 4,000 = 4,000 3. D 700,000 + 4,000 = 704,000 Problem 25-5 (IFRS) 1. C 6,700,000 + 120,000 – 5,100,000 + 25,000 + 60,000 = 1,805,000 2. A 1,805,000 – 175,000 – 810,000 – 70,000 – 30,000 – 20,000 – 5,000 – 260,000 = 435,000 3. B 2,100,000 + 435,000 – 150,000 = 2,385,000

Problem 25-6 MCQ(IFRS) 1. 2. 3. 4. 5.

D A D A A

Problem. 25-7. MCQ. (IFRS) 1. D 2. D 3. A 4. D 5. D Problem 25-8 MCQ(IFRS) 1. B 2. D 3. C 4. A Problem 25-9 MCQ (IAA) 1. 2. 3. 4. 5.

B B B C B

CHAPTER 26 SMALL AND MEDIUM SIZED ENTITIES – ASSETS Problem 26-1(IFRS) 1. A

[ 150 units X P500 = P75,000 X 0.70 = P52,500 ]

Problem 26-2(IFRS) 1. D = P883,550 ]

[ P1,000,000 – 50,000 = P950,000 X 0.909 = P863,550 + 20,000

Problem 26-3(IFRS) Journal entries: Cost model: ENTITY B Particulars Dr. Cr. Investment in P1,010,000 associate Cash P1,010,000 Cash P25,000 Dividend income P25,000 ENTITY C Investment in associate Cash Cash Dividend income

P1,515,000 P1,515,000 P200,000 P200,000

ENTITY D Investment in associate P2,828,000 Cash P2,828,000 Impairment loss P1,403,000 Investment in P1,403,000 associate Equity method: ENTITY B Investment in associate

P1,010,000

Cash Cash

P1,010,000 P25,000 Investment

associate Investment in associate Investment income

in

P25,000 P125,000 P125,000

ENTITY C Investment in associate P1,515,000 Cash P1,515,000 Cash P200,000 Investment in P200,000 associate Investment in associate P450,000 Investment income P450,000

ENTITY D Investment in associate P2,828,000 Cash P2,828,000 Investment income P500,000 P500,000 Investment in associate Impairment loss P903,000 Investment in associate P903,000 Fair value model: ENTITY B Financial asset – FVPL P1,000,000 Cash P1,000,000 Cash P25,000 Dividend income P25,000 Financial asset - FVPL P300,000 Unrealized gain - FVPL P300,000 ENTITY C Financial asset – P1,500,000 FVPL Cash P1,500,000 Cash P200,000 Dividend income P200,000 Financial asset – P1,400,000 FVPL Unrealized gain P1,400,000

ENTITY D Financial asset – FVPL P2,800,000 Cash P2,800,000 Unrealized gain – P1,300,000 FVPL Financial asset P1,300,000 Problem 26-4(IFRS) 1. D P1,020,000 – P40,000 = P980,000 2. B Problem 26-5(IFRS) 1. B P15,000,000 – P13,250,000 = P1,750,000 – (P2,500,000 X 0.30) = P1,000,000 2. C P20,000,000 X 30% = P6,000,000 P750,000/5 = P150,000 P1,000,000/10 = P100,000 P6,000,000 – 150,000 – 100,000 = P5,750,000 3. A P7,500,000 X 30% = P2,250,000 P15,000,000 + P5,750,000 – 2,250,000 = P18,500,000

Problem 26-6(IFRS) Journal entries: Date Particulars Dr. Cr. Jan 1, 2020

Investment property PPE (land and building)

P180,000,000 20,000,000

Cash Investment property PPE (land and buildings) Cash Investment property PPE Cash Prepaid expenses

P200,000,000 P18,000,000 2,000,000 P20,000,000 P900,000 100,000 P1,000,000 P100,000...