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The Review School of Accountancy
t Tel. Nos. 734-3989 / 735-9807

PRACTICAL ACCOUNTING I

Statement of Comnrehensive Income

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1. X Cornpany, a cjr.e+en{al company, ac<luires vehicles with the intention of holding them as rental cars lirr limitcd
pcnod and thcn(:qling Srem. As of December 20, 2016, czr A was sold for I'}120,000 and car B was also sold
tbr PlOO,00O. lhe carrying values of cars A and B wcrc P80,000 and P70,000 rcspcctivcly. What amount o('
gain or loss X company disclosed in thc profit or los-;-of 2016 in relation to the above cars? -,--i n i
a) None c) P150.000 .t
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b) p70,000 d) P220,000 ( i ii -' ' i,'r,
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equipment, and installation servicci r;;[ ._1..:... --l

2. Meyer & Smith ir EAiff.lri*Iechnology company. 1'hey provide
0 as trairring. Clustomers can purchase any product or seryice sepruately or as a bunfledpac\agc. Container
Corporatiln purchased compuler cquipmeni, installation anri lrrr!:rir:g for a tojgl-49{6^t{]:O,09gron March 15.
2016. Egimated standalone fair values <lf the equipmenl, jnstnllatit.r;i an(l.raininglrc l'-75,00{), I'50,(t(r0 and
'I'he journal entry 1tl record the transaction on Murch f\]7OlO*itt incluclc a
4tZS,iiOO).pecrively.
,i "*f,itloSalcsRc.vgpuc.for.l'120,0001r."^^^ , ,1 .r- . ll) ,.. lt, l,.
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c) credit to [Jnearned Sc'rvice Rcvetrue of P20,000. : !t1. . - ' :
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d) credit to Servicc Rcvenue of I'50,000.
V 3. On January 2,2016 Company A provides a bundled servicc offering to Customer R. It chargcs Custon'rcr l)
P30,000 fbr upfiont advice and two ongoing serviies -- on call advice and access to Company A's data bascs
(Y: TNlrr.I\k over a 2 year period. Company A determincs tlrat, if it wereto charge a scparate fee f'or -each scrvicc il' sold
1t" scparatcly the fce woul<J bc; upfront.'P2.QQ0: (]n-call, {Zor9O0; Access to databascs, PS,00d.' What amount ol'
l^ln, ,"r*o* ihould Company A report in itsijccembcr 31, 2bf-6staterrrent of cornprehensiltia-dicr
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a) l>1,667 c)I'}15,833 - I
b) P6,667' d) P30.000 '"'))'t 'i '
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4. Botanic Choice sell natural supplements t() custolners with an unconditional right ol' rclum il'they arc not
satisfied. The right of rcturns cxicnd.i 6C da1'"s. C)i', Fcirruirry. I(i,2{Ji4. a custonierqurchases f-3,0C0 of Jiroducts
(cost l'}l .5OO). Assuming that bascd on prior r'xpericncc. cstirnated returns arc 2OYo. 'fhc journal entry to re cord
$ the salc and cost ofgoods sold includcs a
a) dcbit to Cash and a credit kr Salcs Revenue of I'3,000.
b) credit to Refund Liability otP600 and a crc,lit tn Sales Revenue of P2..400.
c) dcbt 1<l Cost of (ioods Solti and crctlit to Invcntorv lbr P1.500.
d) credil to llslirnatcd Invent()rv l{etltrns ol'P30(}

5. Changi.Cr>mpany sclls one oI'its products tig. I'>5(X) per unit on credit. 'lo encorrage early scttlcmcnt tl1u.
c()mpany awartls its custtxncya lo%o early setttement disgrg:irt provided that tbe customcr scttlcs withir130_
days of buying thc goods. Nonnal credil tcrms-aro-60 qEJ-, Customer A pays P40,500, within 30 days ol'ihi
lj date of purchase, to settle the amount owing tbr00 ulits bouglrt &o-lqhc entity. Customcr 11 pays I'}45,000, 60
days-afler thc date of purchasc, 1o settlc thc amount owing fbrQ!*uni_ts )ought to Lhc cntily. I1'thc cornpany use s

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,tig@stho-d-<rf rccording rcceivables anti sales, what amouni of r"vgnuc from sale.s shoulc!Jh::,r*pXny.
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disclosedintirestaterrrentofcomprehensivcincomc?'..,..;
a) P40,500 i'
b) P45.000 ai pgs,ioo i'
t-,['.tm{W O Company R sells furniture and offcrs an 11tqq9.5!-[a:c pcriod of-:!-11q,E!b;to ccrtain qualiffing custorncrs
t Lustolncr B
, - rrl\. rar \ Custorncr qualifies tor
r1 qua[ttes lnc r4.er-es.t...tlee
fbr thc period an(r
r4-!.c_tL]5.t1ree pen()o purchases llurniture
an<l purcflases rurnlrure on
oh Junc 30,2016.
June Ju, tulg. ]'hp,culrent
! nl casl:
(ft:t0rqtPF salcs pricc ot'ine turnirurc i@g\(l09) cu.tnrr"r t) will pay\P80.000 each on June:oizdrz.'Qtttt and ami/
'l t ,^ 1Lrt Company l{ determines that an appropriate discount rate for}mputing intcrcst to the\ransactiOn is 5%"-'pcr
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idnrh.0&rth.:"'::o#r,*'"l::H:T,**tr,1#.i:3i::,::l:"JH:J:::"f,;:
annum: What amount of rcvenuc should C'ompany R rccognizcd on June 30, 2016?
I
,\, a) nonc c) I'148,753
b) P76,190 d) P217,860
7 . Company N swaps a containcr of its milk Iirr a container of rnilk ol Clompany M in order to be ablc to dclivcr t<r
a cust()mer located closer to Company N's distribution ccntcr. 'lhe.value oI'the conlaincr ol'rnilk is l'20,000,
which is thc samc for both cornpanies. fhe lbllowing week, Cornpany N swaps a container of nrilk (with a
value of I)20,000) with Comprury l, in cxchange for a container of crcam. 'fhe value of Company 1..'s container
of cream is P24,000. Company N also reccivcd P2,400 from Company L. What amount of rcvcnuc should
Company N rccognizerl rclatctl to thc swaps?
a) P20,000 c) I'24,000
h) P2l.600 I,26.400
Ld)
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