ACYFAR1 Quiz 3 PDF

ACYFAR1 Quiz 3 Due Oct 8 at 10:43am Points 55 Questions 39 Available Oct 8 at 9:10am - Oct 8 at 10:43am 1 hour and 33 minutes Time Limit 93 Minutes Instructions Instructions PARTS I. True or False (13 items, 1 point each = 13 points) II. Multiple Choice Theories (10 items, 1 point...

ACYFAR1 Quiz 3 Due Oct 8 at 10:43am Points 55 Questions 39 Available Oct 8 at 9:10am - Oct 8 at 10:43am 1 hour and 33 minutes Time Limit 93 Minutes Instructions Instructions PARTS I. True or False (13 items, 1 point each = 13 points) II. Multiple Choice Theories (10 items, 1 point each = 10 points) III. Problem Solving (16 items, 2 points each = 32 points) INSTRUCTIONS The quiz (examination) is good for 1.5 hours (90 minutes). For problem solving, final amount should be: without peso sign. with or without comma. for questions asking overage or shortage, put a "-" negative sign to indicate shortage. for questions asking gain or loss, put a "-" negative sign to indicate loss. for computations with present value, do not round off present value factors while computing. round off final answers to nearest peso unless instructed to round off to 2 decimal places REMINDERS 1. This is a CLOSED-NOTES quiz. ONE ATTEMPT ONLY. 2. Other than your main Canvas quiz page, you are NOT allowed to open any tabs nor open any applications during the quiz time. Activity log in Canvas will strictly be monitored during the quiz. Course Chat  3. Use your calculator for calculations. You are not allowed to use Microsoft Excel, Numbers, Google Sheets, and other similar spreadsheet applications. 4. Do not put your PC/laptop/iPad/gadget on "sleep mode on". Canvas activity log might detect this as change tabs. 5. Be reminded of the provisions of Section 5.3.1.1 of the SH that states that “Cheating in any form during an examination, test, or written reports including reaction papers, case analysis, experiments or assignments required is a MAJOR OFFENSE”. This quiz was locked Oct 8 at 10:43am. Attempt History Attempt Time Score LATEST Attempt 1 92 minutes 37 out of 55 Score for this quiz: 37 out of 55 Submitted Oct 8 at 10:43am This attempt took 92 minutes.  Send Question 1 0 / 1 pts Information must be relevant or faithfully represented if it is to be useful. You Answered True Correct Answer False  Question 2 1 / 1 pts The qualitative characteristics apply equally to financial information in general purpose financial reports as well as to financial information provided in other ways. Correct! True False  Question 3 0 / 1 pts ISSB Standards allow companies and investors to standardise on a single, global baseline of sustainability disclosures for the capital markets, with any additional jurisdictional requirements being built on top of this global baseline. Correct Answer True You Answered False  Question 4 0 / 1 pts The FSRSC has full discretion in developing and pursuing the technical agenda for setting accounting standards in the Philippines. Correct Answer True You Answered False  Question 5 1 / 1 pts An expense is recognized immediately when an expenditure produces future economic benefits. True Correct! False  Question 6 1 / 1 pts The purpose of establishing a petty cash fund is to keep enough cash on hand to cover small amount of operating expenses for a period of time. Correct! True False  Question 7 1 / 1 pts Check drawn by the company dated December 30, 2023 should be added back to cash balance if the check was delivered to payee on January 3, 2024. Correct! True False  Question 8 1 / 1 pts An aging of accounts receivable schedule is based on the premise that the longer the period an account remains unpaid, the greater the probability that it will eventually be collected. True Correct! False  Question 9 1 / 1 pts Trade receivables are classified as current assets if they are reasonably expected to be collected within one year whichever is shorter. True Correct! False  Question 10 0 / 1 pts An entity shall classify financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both: (a) the entity’s business model for managing the financial assets and (b) the contractual cash flow characteristics of the financial asset. Correct Answer True You Answered False  Question 11 1 / 1 pts The Unrealized Gain or Loss–FVTPL account is reported in the investing section of the income statement. Correct! True False  Question 12 1 / 1 pts Equity security holdings between 20 and 50 percent indicates that the investor has a controlling interest over the investee. True Correct! False  Question 13 1 / 1 pts All dividends received by an investor from the investee decrease the investment’s carrying value under the equity method. Correct! True False  Question 14 1 / 1 pts When equity investments at fair value through other comprehensive income at the end is greater than the fair value at the beginning, an entry to adjust the investment would include a: Correct! a credit to unrealized gain – OCI a debit to equity investment at FVTPL a debit to impairment loss a credit to gain on remeasurement  Question 15 0 / 1 pts IFRS requires companies to measure their financial assets based on all of the following except Correct Answer Whether the financial asset is a debt or equity investment. The company’s business model for managing its financial assets. You Answered All of the choices are IFRS requirements. The contractual cash flow characteristics of the financial asset.  Question 16 1 / 1 pts The existence of significant influence by an investor is usually evidenced in one or more of the following ways, except representation on the board of directors or equivalent governing body of the investee; material transactions between the investor and the investee; Correct! power to control the financial and operating policies of the investee. participation in policy-making processes, including participation in decisions about dividends or other distributions;  Question 17 1 / 1 pts Koehn Corporation accounts for its investment in the ordinary shares of Sells Company under the equity method. Koehn Corporation should ordinarily record a cash dividend received from Sells as Correct! a reduction of the carrying value of the investment. dividend income. share premium. an addition to the carrying value of the investment.  Question 18 1 / 1 pts Transaction costs incurred on purchased of equity investment designated through other comprehensive income should? expensed in profit or loss  Ignore. Correct! capitalized as part of initial cost of the investment. deferred expense and should be recognized as expense when investment is sold.  Question 19 1 / 1 pts Which of the following is not correct in regard to FVPL investments? Unrealized holding gains and losses are reported as part of net income. Correct! All of these are correct. They are held with the intention of selling them in a short period of time. Transaction cost is recorded as expense.  Question 20 0 / 1 pts Which among the following is not a purpose of holding an investment? You Answered For meeting business requirements and security or protection For capital appreciation and ownership control. For accretion of wealth through receipt of regular income like interests, dividends, etc. Correct Answer For reinforcing stronger internal control over cash and marketable securities.  Question 21 1 / 1 pts Which of the following are reported at fair value? Debt investments. None of these. Equity investments. Correct! Both debt and equity investments.  Question 22 1 / 1 pts A Corporation acquired 10% of the outstanding voting shares of B Incorporated on July March 1, 2022 designated at FVTOCI. On September 1, 2022, A acquired additional 10% of the outstanding voting shares of B at fair value. On October 30, 2022, B Incorporated declared cash dividends of P2 per share and distributed on November 30, 2022. As of December 31, 2022, B reported P2,000,000 net income. A Corporation in 2022 should? Report investment income as dividend received only. Shall deduct the dividends received and report the entire year share in profit as investment income. Report total investment income 2022 as the dividend received and share in profit from September 1 to December 31. Correct! Report investment income as share in profit from September 1 to December 31 and total dividends received as deduction in the carrying value of investment.  Question 23 1 / 1 pts Cash dividend received by an investor in equity investment at FVTPL and FVTOCI from the investee should be accounted for as? Correct! dividend income an increase in the carrying value of the investment ignore only a decrease in the carrying value of the investment  Question 24 2 / 2 pts A Company had the following accounts balances on December 31, 2023: Metrobank – current account P2,500,000 Chinabank – dividend fund 800,000 Cash on hand 230,000 Union Bank – restricted account for factory construction expected to be 3,000,000 disbursed in 2024 Certificate of deposit purchased on December 10, 2023 and due on March 1,500,000 10, 2024 The cash on hand includes a P100,000 check payable to A dated January 7, 2024. What should be reported as cash and cash equivalents on December 31, 2023? Correct! 4,930,000 4,930,000 (with margin: 0)  Question 25 2 / 2 pts A News Agency developed the following reconciling information in preparing its September bank reconciliation: Bank statement balance 30 September P120,000 Note receivable collected by bank 60,000 Unpresented cheques 90,000 Deposits-in-transit 45,000 Bank service charge 750 Dishonoured cheque 12,000 Determine the adjusted cash balance. Correct! 75,000 75,000 (with margin: 0)  Question 26 0 / 2 pts On December 31, 2024 accounting records of B, Inc. showed the following items in its Receivables account: Employees’ accounts – current 5,100 Note received in settlement of delinquent customers’ account 18,500 Dishonored customer’s note charged back to accounts receivable 25,000 Balance due from bankrupt customer for which no further collection is 2,400 expected Accounts receivable from customers 240,000 Notes receivable from customers, including a 90-day P5,000 note from an 88,000 officer for goods sold to him Accounts receivable from sale of old equipment 8,000 Accounts receivable factored 75,600 Ordinary share subscription receivable, currently due 39,000 Accounts receivable assigned, non-trade 50,000 How much should be reported as total non-trade receivables of B, Inc. at December 31, 2024? You Answered 94,100 102,100 (with margin: 0)  Question 27 0 / 2 pts On December 31, 2024 accounting records of B, Inc. showed the following items in its Receivables account: Employees’ accounts – current 5,100 Note received in settlement of delinquent customers’ account 18,500 Dishonored customer’s note charged back to accounts receivable 25,000 Balance due from bankrupt customer for which no further collection 2,400 is expected Accounts receivable from customers 240,000 Notes receivable from customers, including a 90-day P5,000 note 88,000 from an officer for goods sold to him Accounts receivable from sale of old equipment 8,000 Accounts receivable factored 75,600 Ordinary share subscription receivable, currently due 39,000 Accounts receivable assigned, non-trade 50,000 How much should be the total trade receivables of B, Inc. at December 31, 2024? You Answered 455,100 371,500 (with margin: 0)  Question 28 0 / 2 pts C, Inc. acquired 30% of CeCe Corp.'s ordinary shares on January 1, 2023 for P400,000. During 2023, CeCe earned P160,000 and paid dividends of P100,000. C's 30% interest in CeCe gives C the ability to exercise significant influence over CeCe's operating and financial policies. During 2024, CeCe earned P200,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2024, C sold half of its shares in CeCe for P264,000 cash. What should be the gain on sale of this investment in C's 2024 income statement? You Answered 34,000 49,000 (with margin: 0)  Question 29 2 / 2 pts C Co. owns 20,000 of the 50,000 outstanding ordinary shares of CeCe, Inc. During 2023, CeCe earns P800,000 and pays cash dividends of P640,000. C should report investment revenue for 2023 of Correct! 320,000 320,000 (with margin: 0)  Question 30 2 / 2 pts On January 7, 2023, C Inc. purchased 300,000 shares of CeCe Inc.’s ordinary shares at P50 per share, giving the company 15% ownership in the CeCe. At the end of 2023, CeCe’s shares were trading at P52 per share. The shares are treated by C as financial asset at fair value through other comprehensive income. On January 15, 2024, C purchased another 300,000 shares of CeCe at P51 per share (fair value on that date), an additional 15% ownership, giving the entity a significant influence over CeCe. On this date, CeCe’s net assets had a carrying amount of P100,000,000, and the fair value of CeCe’s net assets approximates it's carrying amount. Other details pertaining to the investee are as follows: Cash Net income dividend* 2023 P4,500,000 P2,000,000 2024 6,000,000 3,000,000 *Cash dividends are declared and paid at the end of the year. At what amount should the investment be reported on C’s statement of financial position on December 21, 2023? Correct! 15,600,000 15,600,000 (with margin: 0)  Question 31 2 / 2 pts On September 31, 2024, C Company exchanged equipment for 2,500 shares of CeCe Company’s ordinary share. On that date, the equipment had a carrying value of P250,000 and its fair market value was P290,000. The book value of CeCe’s ordinary share was P80 per share. On December 31, 2024, CeCe had 25,000 number of ordinary shares outstanding but its market value was not readily determinable. What amount should C Company report as the amount of gain or loss on the exchange? Correct! 40,000 40,000 (with margin: 0)  Question 32 2 / 2 pts On January 1, 2024, C Co. purchased 25% of CeCe Corp.'s ordinary shares; no goodwill resulted from the purchase. C appropriately carries this investment at equity and the balance in C’s investment account was P720,000 at December 31, 2024. CeCe reported net income of P450,000 for the year ended December 31, 2024, and paid ordinary share dividends totaling P180,000 during 2024. How much did C pay for its 25% interest in CeCe? Correct! 652,500 652,500 (with margin: 0)  Question 33 2 / 2 pts C Co. owns 20,000 of the 50,000 outstanding ordinary shares of CeCe, Inc. During 2023, CeCe earns P800,000 and pays cash dividends of P640,000. If the beginning balance in the investment account was P500,000, the balance at December 31, 2023 should be Correct! 564,000 564,000 (with margin: 0)  Question 34 0 / 2 pts On November 15, 2023, C Company purchased 100,000 ordinary shares of CeCe Co. at P50 per share. Costs directly attributable to the purchase of the shares amounted to P100,000. The shares were classified as financial asset at fair value through profit or loss. At the end of the year, CeCe’s shares had a fair value of P53 per share. At the end of 2024, CeCe’s shares had a fair value of P52 per share. On September 10, 2025, C sold all of its shares in CeCe Co. at P49 per share, the fair value of CeCe’s shares on this date. Assuming that the shares were classified as financial asset at fair value through other comprehensive income. How much is the realized gain/loss debited to Retained Earnings on September 10, 2025? You Answered -100,000 200,000 (with margin: 0)  Question 35 2 / 2 pts On January 7, 2023, C Inc. purchased 300,000 shares of CeCe Inc.’s ordinary shares at P50 per share, giving the company 15% ownership in the CeCe. At the end of 2023, CeCe’s shares were trading at P52 per share. The shares are treated by C as financial asset at fair value through other comprehensive income. On January 15, 2024, C purchased another 300,000 shares of CeCe at P51 per share (fair value on that date), an additional 15% ownership, giving the entity a significant influence over CeCe. On this date, CeCe’s net assets had a carrying amount of P100,000,000, and the fair value of CeCe’s net assets approximates it's carrying amount. Other details pertaining to the investee are as follows: Cash Net income dividend* 2023 P4,500,000 P2,000,000 2024 6,000,000 3,000,000 *Cash dividends are declared and paid at the end of the year. What amount of goodwill was included in the cost of the investment on the date C achieved significant influence? Correct! 600,000 600,000 (with margin: 0)  Question 36 0 / 2 pts B Corp. received the following dividends from ordinary share (15%) and preference share (30%) investments during the current year: A cash dividend of P120,000 from ordinary share investment. A cash dividend of P90,000 from preference share investment. A property dividend costing P700,000 which had a market value of P900,000 How much is the total dividend income that should reported for the current year income statement? You Answered 105,000 1,110,000 (with margin: 0)  Question 37 0 / 2 pts B Corporation acquired 15,000 Chucks Company shares on February 1, 2022 at P60 which includes a P5 per share broker’s fees and commissions. A P75,000 cash dividends were received from Chucks Company on March 30, 2022. These dividends were declared on January 10, 2022 payable to shareholders as of February 15, 2022. The shares were selling at P62 per share on December 31, 2022. The investments were designated as equity investments at FVOCI. How much is initial carrying value of investment at date of acquisition? You Answered  975,000 825,000 (with margin: 0)  Question 38 2 / 2 pts C, Inc. acquired 30% of CeCe Corp.'s ordinary shares on January 1, 2023 for P400,000. During 2023, CeCe earned P160,000 and paid dividends of P100,000. C's 30% interest in CeCe gives C the ability to exercise significant influence over CeCe's operating and financial policies. During 2024, CeCe earned P200,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2024, C sold half of its shares in CeCe for P264,000 cash. Before income taxes, what amount should C include in its 2023 income statement as a result of the investment? Correct! 48,000 48,000 (with margin: 0)  Question 39 2 / 2 pts On January 7, 2023, C Inc. purchased 300,000 shares of CeCe Inc.’s ordinary shares at P50 per share, giving the company 15% ownership in the CeCe. At the end of 2023, CeCe’s shares were trading at P52 per share. The shares are treated by C as financial asset at fair value through other comprehensive income. On January 15, 2024, C purchased another 300,000 shares of CeCe at P51 per share (fair value on that date), an additional 15% ownership, giving the entity a significant influence over CeCe. On this date, CeCe’s net assets had a carrying amount of P100,000,000, and the fair value of CeCe’s net assets approximates it's carrying amount. Other details pertaining to the investee are as follows: Net income Cash dividend* 2023 P4,500,000 P2,000,000 2024 6,000,000 3,000,000 *Cash dividends are declared and paid at the end of the year. What is the carrying amount of the investment in associate on December 31, 2024? Correct! 31,500,000 31,500,000 (with margin: 0) Quiz Score: 37 out of 55