Escolar Documentos
Profissional Documentos
Cultura Documentos
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ReSA
The Review School of Accountancy
5lTeL No. 73S-9BC7 & 734-3939
MULTIPLE CHOICE
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INSTRU;:.1'I0NS: .~elect the cor.CC'<.-'t c;.nswer -~or each 0.t: the following
quest io1.s. Mdrk on~y one ans~.rEr for each i teiTi by shading the box
corresprncJing to the let+-er or your chcice on the sheet provided.
STRICTLY NO ERASURES _i.i.RE ALLO"H"ED. UEe p211cil no. 2 onJy.
--------------------
PROBLEM }_
c:~" ul' . i :1g for ~hP first t_ime t~hs fir:a:~cial statements of Cavalier Corp.
~a~
the pr: 1cJ ended December 31, 2013. C&valier Cotp, a manufacturer of steel
bc;rs d.:.stl buted rr.ain_l_y l.o conscructjon companies, started its operat:ions ir:
2Cll. C:u'fi.: -._ier' :-: ac:::ou:ltailt presen e9 to you the following analysis of its
3. P.:, costir.q r2l'J: 008 \IC:.S recognized as repair.:; dnd 1"'\c intenance
..:quif"\ent
'?Yt=JP' se l, 2l1J.:.
-::Jn JclyIt was ascertained that the cost should have
bee11 capitalized a11d Cepreci "l.l:ed und'?r stralqht-line over d 5 year
t:sc~ Lul life to zec-0 residual value.
The .olluwlng 't:rrurs '-''e>.r-c aJsc ncted 1 vith regard the coJTlpaoy's year-end
i n v ,, , Lory ? urruna r y :
\
~=-~----~--------~-----=r.---_-
U;_dcl-slat:ement_--+----~_?~OO_Q_ ______
___ .?_0_1~:!:._ 2(112
-
2013 I
~l
!_l:::_'-crstatmef1C __ _I Pl2, 300--~
e. Jiviac:nas declareo at ~he e:td ",) 2Cl12 and 2013 ><ere paid a.ud recorded
the foJlowirg year Dvider.ds de(lared in 2013 and paid in 2014 was at
i\equir~:nen L ~:
l. w:1ar LS '::he adj u.sled nee: incorrP ; n 20"11._?
c;. 9~,, G,_IQ -- 11 c .. llO_, 000
0. l15, ('0(.' d. 145,000
2. ~~hsr is 1"112 adjusteD net income ln 2013?
a 02,000 c. 749,000
.b. 'en, ooo d. 759., ooo
3. vJhc;~_ ~-c tl>e rerr,Jact.>ve adjustm'2'l.t t'J the retained ea..:-n:i.ngs be<;inning
,, , OL l' c. 98,00U
d. 78,000
~- v\hsr is the ad'iusted rPtc:dneci earnlngs on December :" 1 , 2013?
a. u,OilO. c:. 746,000
b. ,,J96,000 d. 896,00
5 20U 1vorking capital?
2. c. l49, 000
d. 1.99, coo
~
- -~-
PROELEM 2:
t: he co u .r s e o f :r u r f i r s t d 1 d I t o :. the fi.nancial st3tEments of D~l~a Corf.
I r.
for the fiE-:-:c.l veay- ended ,June )o, 201.3,. you "l.Sc~r"-.ained tnat the company
noported t:he fol.:.owiw::r net income:
~fL_,~ca~.-year-e__r::~ed Jcn; 30,-2Q~l -L F900,000 j
1- F.'-scal y8a-c end'=ci ,Jun2 30, '201L -1-- . 570,-000 I
L-Fi~year el~de-;.:\-J~3U,
-----------
-70Ll
-------
720, 000~
~~ P22,
J.O!.foi f
1-~=-- 61 ~'1Pl8,
o~o000
12
suf!plic.:; ,_
~-~ ------- - - - - - - - - - -
l'.ccr~Jerl u+-.ilitiss
L--------:-------_-_------------
------
: Accrue~ __:L~-~-~~,.;t ::x;Jense
COO
-
-------
:?0,000
-----
----~Q, 000 - - - 6, 000
:<2,000
8.equireme:1t s:
6. What j s tl-.e ad-, ust ed net. ir,com-- fc;r ,. r. e f1.-3cal year enC:ed .>une JG I
20:1?
a. 9:59,01)() c. R9G,CJOO
b. C)08, oo~, c:. R7 9 I ()() ()
7. What ~-' the adjusted net iLC(:ffi?-' tor the f is :.:a l ye;c~r ended .._:un:.: ](),
7Gl2?
d. 4 2 (J' 0~0 c. ,;-26,()00
.(J. 50~3, 000 d. ~196,000
8 vJt.at is the> <:VlJust.ed rc.t ir,con;e tor t:,1l' fi_scal year ended Jt...r:e "JC;,
:201:5'
a. no, con r' ti8b "55
b. G3C, 00:1 d. 687,4:_0
PROBLEM ~:
.: .
Scho Company prov _;_ der1 t'h:: ioUCJw _i r" J ~ l' f or:na t ion i.n r2la t.i. c.n ":.:; ycc:r-
audit of its financ:al stateffients fo~ :he perJod enoed Dec2mber l~, ~Oll:
-------- I
B:1lances as of January ~;013 -l
Cas-h----------------------=1 ------- PPC;O,OuGl
J\ccounts rece:...L vat,_ ~e ___ __ _ ~>.: C, 000
1-\ll.m.Jance Lor _dC::0~:.!i:._l_accul:Jt..s ------+--------------------- 12,000
i InJentol iPs --------------------'----------- -----~,::,_12 OOCi
[Prepaid :'..nsu..':...::'_f_'-~------------ _____ L______ ___ ______ __ ___2_~_S-_-~ !
';ancc.-~
----------
AUDIT?:NG PROBLEMS FIRST t=>RE:"-EOARD EXAMi.NATIO!'.J (BATCH 26)
ReSA: The Rf\1ew Schooi of Accountancy Pzge ~or n
"
rl. Reissu<;J ,-,, fJ(;Q t:_r:-e2su:cy sl:kr<o~3 :-t
~-28 per c:na:c.~ o:-1 S-=ptember 3, 2013
':?. . Isc;,Jed sto::k r:Hl~ts en Septenl-:Jer 30,.: 20:i.3. 'Tvi~) stoc~< right: entitles the
:>tcc:kholdcr to p-nchasP. .:l.' flrlditJ.~.:mal shar~~ for L'3S !JSr sr,;"'l.re. The
:: J.gnts ;hall ex?i.rE.' o:-1 LJecembE.r 31, 2Cl::<.
f. 40, OOG sho.ru ri.yhts were eAerc1sed whP.n t.hr,; mc:rket value of L.ha shares
was at 240 pe~ share on Oct~ber 11, 2013.
-:;J. Decli.lled '3 per shar" cc..sh d:i.vldcnds 0r.. Decembc:r 15, 2013 to
stoc!'J1oldec:o as of Dec<?.mber '11, ?0-iJ payabl.E. Oi1 Jam:ary 15, 201 i.
h. Reporte::i o.n adjustPd net income .:~f '~;40, COO
~<,equirE:!mcnts: Llet:~rncine the balances u:' t:hi:' fo.1\('',;incJ ,.,cccunts as of Cec'"mb":r
.3::., 201.3:
16. Share cc:p.i.~al
a . :, , 'J 0 (1 , ) 0 0 C . LJ f 4~ 0 1 u(J c
b. :.,490,00 c..i. s,'2s0, r,oo
17. Tot:.:. shan~ premiurrt/St'1ctj.t-:.tCJ~ paid in capital
a. "i9S,OC'O c. C75,0:JO
b. 665, 100 d. 710, Q(jQ
18. Il.::cumulatr"d IJrofi1:s-u;~appr.c,priated
a. l, )98,)U0 r:. 1,26J,OOO
b. :;.,0)99,()()() d. 1, . 1 ~8, CJOC
same ciay.
h) After all adjusting entries were effected the adjusted .lP.t incL.ne for
2013 1vas ~t F2, 600,000.
3ased on t!11"' .:1bove and the result of vour audit, determine the fnllowing as of
::>ecember 31, /Cl3:
21. The enL:y tn reco1d- the retirement of shares on Jo.nua:.y 10, 2013
~n~oJve~ a deblt to:
3. !)>:dinary shc:res at P?~l1 ,0!JO.
o. Share Qremium at PlOO,OOO .
c. hc.:::umuJatea profi'ts, P30,'i00.
d. Fc;urnul.;,ted prof~ts, 220,000.
22. Tl-Je ent:-y upon s~ttl'3mt:nt of the property dividend on Marc!:: 12 requires
a credit to gain at:
a /0,000 c. 20,000
.. SO,OJO d. none
2J. The <entry to record tlH:o exercl:.k of .share riqhts on Jl.prj:._ 2::, 2013
involves a:
a. credit to Ordinary shares at P1,~00,000.
b. credit en Ordinary share rights outstanding at P1,680,0GO.
c.cr,dit to Share _prern.Lum at ~L, G80,000.
d. dchit to Share premiu~ ~t P1,260,0QO~
"2~. 'I'he entry to r"'cord the ,exercise of share opt:i 011 on July -r, 2013
involves a:
~- credlt ~o Ordinary har8S at P160,DOO.
b. credit to Crciin~ry share op~ions outstanding o.t P160,000.
c. c.~edit t::> Shc.re premi 1 Jm AL 240.0,000.
d. debit to Ordinary share options outstanding at P~00,000.
25. What is tre acijl1 sted bal3.nce O'~ totc.d accumulated profits?
a . j , J 6 5, C 0 0 c . S, :3 6 5, 0 0 C
b. 5, 2G5, 000 d. S, 415,000
26. v-ihat is the tutul.st'Jckhclder~' .equity'~ ..
o.. 18,J7CJ,OC10 c. 18,?.70,000
b 18 l 7 'J f 0 0 I)
I d 0 18 f j 2 0 1 0 0 0
-~
PROBLEM 6: t
You he>:-e assigned t,..., audit c:he var2.ot:s curr"'nt: liabil.ity accounts of Tango
Corp .. a wa::hi.ng machine Inanufac~Irer, for the year ended Decemter 31, 2013.
Upon your request, the follbwing schedule ~as fur~ished to you by the
J:o.udi:: notes:
a. T11e accou:1ts payable .i.nclude a P24o,occ purcoase in t.ransit as of
December- 31 from a ,mpplie:- under FOB Destination term and a P90, 000
debit balance with a supplier resulting from an overpayr'lent.
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AUDrnNG PROBLEMS- FIRST PRE-BOARD EXAMINATION (f:sATCH 26)
ReSA: The R~view Schoo~ of Accountancy Page 6 of 8
b. Thr::: "'~~.t.liddtod
"
v..arranl.:i.":; pay;-ti:)le Lalanr:e v.c.s the accrued ciWOunt jc; trH:'
!U'::..~_,)~s____y~.:.r_:_ I L is the ccmpany' c; polL~y' to carry a. cnree-yeec.:-
vlarr<:'nr v c.n its prodnct~ 3Qai n:_;t manufactu.;:ers defects. Based O!! past
exr:-eri.~~~:~t:::, 60'1-. of un.t::s so.1.d are t.;ltimarely ret.:urned fo.': repairs and
t.hat ::r~: .-;arran-cy cost p(:'r mit ic at. P'300. During .. he cun.ent year
12,000 'Jnl.'-E' were sold. Actual warr;:wt-y cost incurred d~Jring ':he year
vJhich WC\:3 charged t.o >varra.1ty expense was :;;t PJ., 910,000.
The compa 1y also ha:e an on-going prowo:.ic.nal progrc1rn l'lhe::-c:;by eacL
wa3hing m."l.chine sold COW(cS .,..,._._th 5 coupo:-~s. 25 coupons plus p;::, 000 shal"_
ent_j t.le the cc;.stomer/dist:ributor 1:.0 a dryer "''h:i.ch oriqina; J y <~osts
!'6, 000. The dryers can b~ r.eoeemed 2 yr>ar::; after receipt of u-.e coupons
from purr.:hd::;c~::;. Thr:: compuny '"t>ti.mates that 4i.H> of tLe coupons issued
with Ute wa:..;n1.ng machirJ.e-.s sold wiLL uLC_rnately be presented for
rtdempt i.cn. The balance in tle estimated premiums payable account is
t.be acc~!~<::_d .1. ia~il#~--:G:__t:_he~_E'J..or~ar. The beginning inventory of
dr-1er.s v.. .'!!'; at 3v0 utn.ts. Duo.ng the y.:ar0 addition?~L 1, JOO dr:1ers were
acquired. An .;.nve:ntory o:t the remaining dryers on hand at year-end
plar:es 1. he count at 2 Hl <Jnits. ThE:. ;::ede.mption. of r-n~miums for the
current ye2r >.;ere. apprr;p.:ialel y re,~o:r:.ied by t:.he cornpa;1y.
d. Durinq -;>Ol~i, Tr~ngo vJd5 s1..;ed by a cotnl,.iet.it::J.c :tor: PS, 000, OJO 1nf::i;1gement
suJ.t- of a tradE:mark. B<iS8(i on the lega.L coen::"e: s advise, Tanoo
d.Ccrued the sum of P3,000,000 as a prov~sion. On Februa~j lS, 2014, the
Su9.rc:me '.:u1,ct decid2d _i_r; i 1\oi o l.ne p<.rty nlleging tt,e infringement
anJ otde, 2d the defcncian::- t.c p.rty ~.ne :..Jqci.eved pai-ty a sum of
?3, 500, ()0\l. T:1e finar.cL-,L statemen~s 'cf T,_,ngo were approved Ly ~he BUD
fo~ 1.ssue or February 20, 201(.
I
e. The accLued ~alaries Q2yabl, in~1ude PSOO,OOC liability 1or compensated
ao~;encP.s 9cc;;;u~_i._n_~~riviou.: _L_ear and L1 1?588, 785, 10% current year.
bonu3 cc k:ey ()ffice:cs co:nj:m'Ld bas-:::d o;1 a:-1 unadjustPd net ir.come of
P9, COU, QIJO a fte.r bonus a'1d "l.fter ta:. ( .30%)
"
2, 500 cays unusc:J vacdti.on leaves .fro111 20.17 were forw2rded to 2Jl3,
:!:rom whi.ch l, 500 d;3ys we;:-P 2xer:ised. Dy the e0d of the cu:c::nn":: year,
addici~n&l 3,0JO dats . curre~t~y~ar
. lEaves ~erg unused by th~ em~~~yees.
linus Gel leaves can b.s carri.eci ovPr ;: 'ei-l r.s, the.rec fter :i c si:all expire.
.
The comp,1ny also est.i.r:2t.es, ao pet past experience, thar only fC% of
thP. unus~d leaves .;ill ul th,nte:'..y be. exercis~d. Salary rate in 7C 12 was
at 250 J~r day while Sdlary ra~~ in 20JJ is a~ F~75 per ~ay.?a;m2nt oi
salaries .i.ncluding <:;xerci3e (Jf lnavf:s were ar.pr-:.:t,:riate.i..y deb:.c:e(' to
current ye~r sal2ries exp~nse.
Req~,;irenEm"::s:
':'.7. ~vhat i.'; the; r~orrect cestirnated \''d~ :;o;nt.H:'' oayable. as cf !)ecrr:Je:c: 2L
2013?
a. J,1?0,1CO c. 1,20\;,00C
b. 1, 190,000 o. 1, no, ooc
:28. Wha": is thE.~ t~rrect. estimated cremiums pay~ble as of December JJ, 2013?
a. %0,000 c. 2,000.000
b. 990,TJC d. 1, 12 o, oorJ
29. What is the adjuPtf?d liabi.L.ty for compensat~d absences to ::)e u1;luded
_i_n tne acr;ruec! salaries as o:: llocecr.te.:- ~:ll, 2CJl3?
c.. 825,000 --- l, 080, oco
b. 880,080 d. l,!JO,O~O
JC. What is the ~orrect a.ccruc~<i bunus .o bn in:::::..udeci in the
sal3ries payabl~ as of Dcce,;ter JJ, L-.013?
a. S56, no c. 589,439
b. sn, c::::s rl. 59C,09Cl "-'
31. How nt11cr. is the total current. liabJt~.i.ties a.s of December 31, 2CJ '!?
a. 8,2Sl,028 c. 8,_266,729
b. 8, 29J, 439 (;, 8,3J0,09.0
PROBLEM 7:
'Tr1c follovr:i.n; .;_.:::. .::._ln
2x.::erpt c_. :~ Y 3 n .'< e 2 Inc: . ' :3 t r _;_a l >::a lance ]::_I
2G13:
p;!'~~
,~~~~ lJl% -D~~~ 3 yea__=s___ _
-----'----
'- ::.ght to reiinil.rce +:he sa.i.-'1 loc:m by i_ssul'ng iJonds, the proceeds of
:"hich shall be Jsed to setde t~e o0l:i.g.3.tjon. On Mc.rch J., 2014 the
cciPpenv issued P:3, lJJO, 0 1 0 bords :,t face value and used tiJL-thirds of
tne prcceeds to settle the notes .Jn Apri_;_ 1, 2014. ThE:: ba.la.1ce of the
m6~ur.i.ng cbligati.on was settled out of working ca~jtal. The 2013
:i~~ncial statPmant were app~cved for issuance by the BOD en April 15,
,' c l4 1
b. Ti.e 12s bends payab~e was issued nn January 1, 2012 wher1 the prevailing
~ar>-.e: rate fer bonds -,.,as .-it Hl~:. T-1e company n~~~orcied the transac-.:io~:
a:o c. c'ebit to ...:ash ior the l:>oJ1d oroceP.':is, i:l credit to tne tunds payable
-'~~-~oUI1L a:: face value, ch:.rging any di::.'ference i:o interE:s-:: expe:1se.
Int2re.;t or. the bo.'as i.s ;-Jayaule Jnnu~lly every [h=cember 11.
c. fhs 9' bonds pa'yati I_ is a se~ ial bond3 'dated January 1, ,)_ Jl3 and
:r,atl.res at Fl, 000,000 ev!IY December 31, starting 2013. Int'2!"E.:St based
c>n th:' outstandiro balar1ce of l:hc bonds a rs paid an;1ually every
:Jecembe.: 31. The rrev?ilinc,; ma!'ki=!t rJte 0 i,1terest on the issuar~ce
.,. date -vvas at lG%. The issnanL:e wa~ reccrced as a debit ~o cash for ;:he
p1oceeds, a credl.t to bonos payable .Jt fa:::e ;alue with ':.he difference
l~E: i;-,g ch2.rged lo j_ntC',rest exiJeu.s-:;. TL'" first prircip.:.J a~d inte::-est
-..:c-~ 12-.:::"::.:i.or, -,.as recordcu :cn.:-2c~l c:t Lh"" cn:.i of the ye'lr.
the ,. .
2:;-::u.c:::er!ce;'exist_ence :::f a p\1rc::1:,,.se L..r:1n.sac:tion?
DJ. .:;r~.LS s au thor i. 7.d. t tOil pr(,,_:;.. rJure s 1-v'.i t h per. s o'nne l in 1- ~)l_; ~,.::on t r.) ,'_ J A::
a:1d t:'jr~hds.1 r;g der,art~.lent.
,_<J~ vi ~~~v/ and ev2l ua t e a [ .1 c1t":c~ ~.J rt f):[ rJu.~:c it 35 i nq prc)cedu rc~ .
Det<.;..m.i.ne \vhether 2 sa;npJ.(,o. of cr.i.:ci.r-:s j_n t:he p;_.r:~ha~e "juurn.i' :'..s
.su:;;pcrtE:d b_:' pi:oper.~y exccui~ec~ r:;rc::ha.S(~ o~~:-..::..r.
d. ~J :',_: ,~ ~. ~-c.. yTP~~rYt. fur- s t:~ 1-:~ ct E:d p: ~- (_: h ;.1 ~) i.".! .=-; to sup nor t.. i n ~ : r:.; c E:: i / ~ :--:..:;
c;est LO
'"!(). =.:~c:rn.:.Ji. c-;c.:;.tr.c)l. irttr)rc)\:f:.j \;Jitr_:_':l the qua11ti~.y ('!_ the n~.-?::~hand~~:-:
_~_::i.e rc ~ J. s crD it L. ed t .ccr. tt1~-~ r~t.iP y cf . ;1e ptl rcnct s c: o t (; e 1.. sent -t~ c ~ :~.;:; :
:, ~'fH" 'J ~~era t: L1g clepA r t n.e r. t .:::eq ui .:; i L i c.r.L1g ths gomL .
~- P~rctasing departm~Gt.
~~. AccoL~t!L..::: pav~.. r.:.le :iCF--::~r'~. _r;~e:rLi-.
d. R-..;ct' i. 1ir:q d,c;partmcnt
"
~~~ P~OBLEM- FIRST PRE-BOARD EXIIMINATION (826) IRENEO/ESPE
SOLUTION GUIDE .
PROBLEM 1: CAVALIER CORP.
NET INCOME NET NCOME 'I-liT I"'COME RE, BEG 21Jl.3 RE, ENI"l 2013 WC !013
2011 2012 .2013
Unadjusted balance {105,000) 550,000 800,000 1,045,000
a. Equipme'lt 200,000 200,000 200,000.
Depr<>ciation (20,000) (40,000) (40,000) (60,000) (100,000)
b. Salaries payable 2011 (15,000) 15,000
Salaries pdyable 2013 (21,000 1 (21,000) (21,000)
Prepaid rent 2011 35,000 (35,000)
Prepaid ren 2012 24,0:10 (24 oo::ll 24,000
~
12,000 12,000 12,000
c.
Prepaid rent 2013
Advance~ from cuscomer 2012
(50,0C'CJ) SCJ,OOO (50,000)
Advances from cu~tomer 2013 (35,000) (~5,000) (35,000)
c'. Inventory, 2011 under 20,000 (20,000)
Inventory, 2012 O"er (12,000) -.12,0G8 (12,000)
Inventory, 2013 o~er (5,00Q) (5,000) (5,000)
e. Dividends 2012 (200,000)
Dividends 20B u: o,ooo) (L>O,OOO)
Balances ~.15,000 432,000 749,0()0 (98,000) 946,1)00 il99,000)
----
1. Ans. B 2. An~. C. 3. Ans. r.. :,. Ans. A. 5. Ans. D.
e
PROBLEM Z: DELTA CORP.
NET INCOME NET INCOME [JE"f INCOME RE, BEG "
6/30/2011 G/3oi2o12 5/30/2013 2013
900,000 i70,000 720,000
a. Unused supples 6/30/11 22,000 (22,00'))
Unused suo plies 6/30/12 18,000 (1o,OOC) 18,000
Unused supplies S/30/13 14,JOO
Accrued utilities 6,'30/ll (3Q,OQO) 30,000
.
Accrued util'tie~ 6i30/l2 (32,000) 32.000 (32,000)
Accrued utilities 6/30/13
.
Accrued interest t>xpense 6/30/11 (10,000) 10,000
(28,000)
-,
Gross/Net Sales 6,313,000
Cost of S;'!les ~10,000)_
Gross. profit 3,203,000
Gain ~rom sale of equipment 50,000
Tot~ I, 3,253,000
Bad 2ebt expense (2J.,000i
Depreciation expense (570,00o;
Insurance (160,000+70,000-SLJ,GOO) (180,000)
Salaries (780,000-40,00:)+60,000) (800,000)
Other, expense (270~000)
Netlnccme 1,4!2,00C 15. Ar.s. b.
*Share split memo: 50,000 sh issued to JUO,COO sh issued; P100 per to P25 par.
3,000 treasury to J.?,OOO treasury; P50 cos! per TS ta Pl2.50 per TS.
**Share rights issue memo: _194,000 share rights were issued w 19.;,ooo s/.ares outstarding.
- - - - - 20. Ans D.
Cash dividends (P3*214,000) ti42,000
:,r PRO~LE.M
-.' . /
~OLUTION GUIDE
S GOLF ClJRPPORATIOfll
. , Entnes:
-; -~ a. Ordinary sh'Jres {30,000*5) 150,000
l Shere premium- OS 90,000 *(3,09D,J00/1,0JC,000}"30,000
Accumulated profits 30,000 Zl. Ans. r:.
Treasury shares 270.000 "
b. Accumulated p;ofits 700,000 *(J .o!Ju,ono;wo) *P70
Dividends payable 700,UOO
~
c. Cash {840,000/41*11 2,i31o,ooo *_1,rJ(lC,OOO sncrre rights wert:: issueJ. 840,000 were exercised.
Ordinary shares 1,050,000
Share premium - OS ::.,260,000 23. Ans. D.
II
h. Income summary 2,500,000
Accumulated omfits 2,600,000
Transaction analysis
PS SH PREM-PS 0~ 51. PREM-O$ Optio'lS OS Accum Prof. UHL-FA TS
Balances, Jan J.. 1,800,000 90.oo; 5,150,000 3,090,000 4,000.000 (245,000) (270,000
a. Treasury retirement (150,01J0 1 (90,000) (30,000) 270,000
b. Property div declaration/pavment (750,000)
c. Share rights exercise 1,050.000 L,2h0,000
C:. Options grant (Prior period error) 200,000 (200,000)
Options exercise 400,00(! 400,000 ;HiO,OO:J)
e. Cash dividenjs to PS (180,000)
f. UHL adjustment (UHGain for t~e year) llO,IJOO
g. Prior period error (:U5,000)
h. Adjsuted 2013 net income 2,600,'JOO
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1 ~
Provision for litigation case, unarlj~uted 3,000,0GO A!E 5: Litigation lass 500,000
Addhional provision, <JS 1-Jer "ourt deci:;>on ~oo,u'JU Provision for l.'tigation ca:;e 500,0')()
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Provis-ion for litigation case, adjusted 1,500,000 *the subsequent 'event is a type 1, adju5 til"/g event.
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i~'";"
2012 leaves furwarded to 2013 2,500
2012 leaves availed in 201;; _ ____f_hSOJ) AJE 6:
Salaries expen~e ;;so.ooCJ
" 2012 le'lves balance to be forwarded to 2014 1,000 Accrue1 saiaries payable 380,000
2013 additionalleale5 e<Jrned :: 3,000 - reversr.! of previous povisiun and set-up of cu.-rent year.
Total leaves which can be forwarded to 2014 t,OO(J LCA, 2013 880,000
Multiply by: estimated exercise ra:e: 30% LCA, 2012 50(1,000
Estimated leaves to be exercised 3.20:J AJE~ 3SO,:JOO
Multiply by cu~rent salary rat~ in 2013 _____27'i_
Uability for compensated absenses, 2013 _ _8_8.-:0,0;,0 29. "lions. B.
Current Liabilities
Accounts payable, adjusted 1,100,000
Estimatedwarranties payable, 2013 1,230,000
Estimated premlums p'lyable, 2013 1,000,000
Liability for compensated absenses. 20: 880,000
Accrued bonus 556,729
Provision for litigation case, arlju~t=d 3,500,000
Total current !:abilities <J,"Z66,729 31. Ans. C.
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