Seatwork 02 declare of earnings (TEST I) lot of Choice: Shade your answer v YELLOW. 1.Which that the adhering to is n

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Seatwork 02 explain of earnings (TEST I) lot of Choice: Shade her answer v YELLOW. 1. which of the complying with is no a generally practiced technique of presenting the earnings statements? a. Including prior period adjustments in determining net revenue b. The single-step earnings statement c. The consolidated explain of income d. Including gains and also losses from stop operations of a segment of a organization in identify net revenue 2. Which one of the following types of losses is excluded from the decision of net income in income statement? a. Material losses result from transaction in the company’s invest account b. Material losses resulting from unexplained sales of assets not gained for resale c. Material losses result from the write-off of intangibles d. Product losses result from correction of errors related to prior durations 3. all of the following costs should it is in charged versus revenue in the duration in which prices are incurred other than for a. Manufacturing overhead prices for a product manufactured and also sold in the exact same accounting duration b. Expenses which will certainly not benefit any kind of future period c. Prices from idle manufacturing capacity resulting from an unexpected plant shutdown d. Prices of common shrinkage and scrap incurred for the to produce of a product in ending inventory. 4. The transaction method in determining earnings is a principle in i beg your pardon a. Income is measured together the amount the an entity can consume throughout a duration and be too off in ~ the end of that duration as it to be at the beginning. B. Sector values changed for the results of inflation or deflation are supplied to calculate earnings c. The financial statement impacts of business events are classified as revenue, gains, expenses, and also losses, i m sorry are supplied to measure and define income. D. Income equates to the readjust in sector value the the this firm outstanding common stock because that the period. 5. The natural ordering of item in the earnings statement would be ideal illustrated through which of the following? a. Particularly items, cumulative effects, income from continuing operations, discontinued operations, net earnings b. Income from plain activities, especially items, net earnings c. Revenue from proceeding operations, stop operations, net income d. Discontinued operations, revenue from proceeding operations, especially items, accumulation effects, net income 6. If the classification of price by function method is supplied for the presentation that an revenue statement, additional information on the complying with items should be disclosed: a. Revenue c. Benefit on revaluation assets b. Benefit on disposal of assets d. Depreciation and amortization cost 7. The revenue statement would help in which of the following? a. Evaluate liquidity b. Evaluate solvency c. Estimate future cash operation d. Calculation future financial versatility 8. Conceptually, net earnings is a measure of? a. Riches b. Change of wide range c. Funding maintenance d. Cash circulation 9. This ax comprises item of income and expenses consisting of reclassification adjustments that space not recognized in profit or ns as required or allowed by PFRS. A. Substantial income b. Other considerable income c. Benefit or lose d. Retained earnings 10. An extensive income includes every one of the following, except? a. Dividend revenue b. Loss on disposal c. Issuance of shares d. Unrealized gain on trading securities page 1 the 5 test II) problem Solving (NR X 2): it is provided the demands of every problem. No solution, no credit transaction of answers. Write your equipment at the finish of this questionnaire. A. The adhering to items were among those the were report on Bulacan Company’s revenue statement because that the year ended December 31, 2019: Legal and audit fees 2,000,000 Rent for office room 6,000,000 attention on acceptances payable 1,000,000 lose on exit data processing tools 500,000 insurance allowance 200,000 The office an are is supplied equally by the sales and accounting departments. What amount need to be classified as general and also administrative expenses? 5,200,000 B. The adhering to information concerns Malolos company’s 2019 cost of an excellent sold. Inventory, January 1 10,000,000 purchase 40,000,000 Writeoff of obsolete inventory 5,000,000 Inventory, December 31 3,000,000 What amount must Malolos report as price of goods sold? 57,000,000 C. Valenzuela firm incurred the complying with infrequent losses during 2019: lose on disposal of one of 4 dissimilar factory 1,000,000 international exchange ns on an lot remitted by a foreign customer early out to major currency devaluation 2,000,000 ns on worthless inventory because of a competitor’s unforeseen product development 5,000,000 lose from major strike by employee 4,000,000 ns on early extinguishment of long-term debt 1,500,000 Loss from expropriation of legacy 3,000,000 In the 2019 earnings statement, what full amount should Valenzuela report as component of proceeding operations? 16,500,000 D. The complying with information was taken indigenous Hagonoy Company’s audit records because that the year ended December 31, 2019: decrease in raw products inventory 1,000,000 rise in products in procedure inventory 3,000,000 increase in finished items inventory 2,000,000 Raw products purchased 40,000,000 straight labor payroll 10,000,000 factory overhead 6,000,000 Freight the end 4,000,000 Freight in 5,000,000 The price of products sold is 52,000,000 E. The complying with information because that 2019 is noted by Marilao Company: Sales 20,000,000 cost of items sold 12,000,000 Selling expenses 1,200,000 General and also administrative expenses 1,800,000 Interest cost 1,500,000 acquire on beforehand extinguishment of irreversible debt 500,000 convey of inventory error, network of revenue tax – credit transaction 800,000 Investment earnings – equity method 600,000 obtain on revenue of invest 2,000,000 income tax cost 2,100,000 Dividends declared 2,500,000 What to be the 2019 net revenue is? 4,500,000 F. Prepare a correctly classified revenue statement through notes come financial statements. The following accounts are gathered indigenous the records of ABC firm for 2015. Sales Inventories – January 1: raw materials products in process Finished products Inventories – December 31 raw materials items in procedure Finished goods Purchases 15,000,000 400,000 480,000 720,000 560,000 340,000 600,000 6,000,000 web page 2 the 5 straight labor Indirect labor Superintendence Light, heat and power rental – factory building Repair and maintenance – machinery manufacturing facility supplies offered Sales salaries proclaiming Depreciation – store equipment Office wages Depreciation – office tools Depreciation – machine Sales returns and allowances interest income gain on sale of equipment distribution expenses bookkeeping and legit fees Office prices Typhoon Rolly- loss obtain from expropriation of asset revenue tax expense 1,900,000 500,000 420,000 640,000 240,000 100,000 220,000 800,000 320,000 140,000 300,000 80,000 120,000 100,000 20,000 200,000 400,000 300,000 500,000 600,000 200,000 640,000 Answer: Masay firm Income declare Year ended December 31, 2015 note Net sales revenue price of products sold Gross earnings Other income full income Expenses: offering expenses administrative expenses Other price Income prior to tax income tax expense Net earnings (1) (2) 14,900,000 10,240,000 4,660,000 420,000 5,080,000 (3) (4) (5) (6) 1,660,000 1,180,000 600,000 3,440,000 1,640,000 (640,000) 1,000,000 note 1 – net sales revenue Sales Sales returns and allowances net sales revenue 15,000,000 (100,000) 14,900,000 keep in mind 2 – price of products sold Raw products – January 1 Purchases life materials accessible for usage Less: Raw products – December 31 Raw products used straight labor manufacturing facility overhead: Indirect labor Superintendence Light, heat and power 400,000 6,000,000 6,400,000 (560,000) 5,840,000 1,900,000 500,000 420,000 640,000 page 3 that 5 rent – factory structure Repair and also maintenance – machinery factory supplies provided Depreciation – machinery total manufacturing price Goods in procedure – January 1 total Cost of goods in procedure Less: goods in procedure – December 31 price of products manufactured finished goods- January 1 Goods accessible for sale Less: finished Goods- January 31 price of goods Sold 240,000 100,000 220,000 120,000 2,240,000 9,980,000 480,000 10,460,000 (340,000) 10,120,000 720,000 10,840,000 (600,000) 10,240,000 keep in mind 3 – various other income gain from expropriation interest income acquire on sale of equipment complete 200,000 20,000 200,000 420,000 keep in mind 4 – Selling expenses Sales salaries advertising Depreciation – store equipment delivery expenses complete 800,000 320,000 140,000 400,000 1,660,000 keep in mind 5 – governmental expenses Office earnings Depreciation – office equipment bookkeeping and legal fees Office expenses full 300,000 80,000 300,000 500,000 1,180,000 keep in mind 6 – Other cost Typhon loss- Typhon Rolly 600,000 Solutions: A. Legal and audit fees Rent for office an are Insurance Total administrative Expenses 2,000,000 3,000,000 200,000 5,200,000 B. Inventory, January 1 to buy Writeoff of useless inventory Inventory, December 31 COGS 10,000,000 40,000,000 (5,000,000) (3,000,000) 42,000,000 web page 4 the 5 C. Lose on handle of one of four dissimilar factories international exchange lose on an lot remitted by a international customer due to major currency devaluation ns on worthless inventory because of a competitor’s unanticipated product creation Loss from significant strike by employees Loss on beforehand extinguishment of permanent debt Loss from expropriation of asset full 1,000,000 2,000,000 5,000,000 4,000,000 1,500,000 3,000,000 16,500,000 D. Raw products purchased Freight in diminish in raw products inventory straight labor payroll manufacturing facility overhead Manufacturing price Increase in goods in procedure inventory rise in finished items inventory COGS 40,000,000 5,000,000 1,000,000 46,000,000 10,000,000 6,000,000 62,000,000 (3,000,000) (2,000,000) 57,000,000 E. Sales price of products sold other Income: Investment earnings – equity technique Gain on revenue of investment gain on beforehand extinguishment of irreversible debt full income Expenses: Selling costs General and administrative costs Interest cost Income before Tax revenue tax cost Net income 20,000,000 (12,000,000) 8,000,000 600,000 2,000,000 500,000 11,100,000 1,200,000 1,800,000 1,500,000 (4,500,000) 6,600,000 (2,100,000) 4,500,000 —End the Examination— web page 5 the 5