Conceptual Framework and "Counting Standards: Frerg%t 20,000
Conceptual Framework and "Counting Standards: Frerg%t 20,000
Conceptual Framework and "Counting Standards: Frerg%t 20,000
'The investment property is estimateg to have a remaining useful life of 10 years and a residual value equal
to 5% of initial cost.
l. Enfity A uses the staight Ime method of depreciation. How much is the canying of the investment
prOperty under the cpst model after one year?
2, Enüty A uses the sfraight line method of The invesunent property has a fair value of P9S0,000 at the
end of Year l. How much is the carrying amount of the investment propelty under the fair value
model after one year?
2, The equipment has an estimated useful life of 10 years and a residual value of P200,000. Entity A
uses the might line method of depreciation. How much is the carrying amount ofthe equipment on
December 3 1, 20>0? 788,846
3, On December 31, 20x3, Entity A revalues the equipment at a fair value o! P820,000, There is no
change in the residual value and the remaining useful life of the asset. Hoy much is thg
revaluation surplus on December 31, 20x3? 31,154
I. Entity A uses the straight line method of depreciation. How much is the canying amount of the
investment property under the cost model after one year?
2. Entity A uses the straight line method of depreciation. The investment propefly has a fair value
of P980,000 at the end of Year l. How much is the carlYing amount of the investment property
under the fair value model after one year?
30,000/
2. The equipment has an estimated useful life of 10 years and a residual value of P200,000. Entity A uses
the straight line method of depreciation. How much is the carrying amount of the equipment on
December 3 1, 20>0? 788,846
3, On December 31, 20x3, Entity A revalues the equipment at a fair value o! There is no change in the
residual value and the remaining useful life of the asset, Hoy much is the revaluation surplus on
December 31, 20x3? 31,154
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CONCEPTUAL FRAMEWORK and "COUNTING STANDARDS
'The investment property is estimateg to have a remaining useful life of 10 years and a residual value equal
to 5% of initial cost.
l. Enfity A uses the staight Ime method of depreciation. How much is the canying of the investment
prOperty under the cpst model after one year?
2, Enüty A uses the sfraight line method of The invesunent property has a fair value of P9S0,000 at the
end of Year l. How much is the carrying amount of the investment propelty under the fair value
model after one year?
2, The equipment has an estimated useful life of 10 years and a residual value of P200,000. Entity A
uses the might line method of depreciation. How much is the carrying amount ofthe equipment on
December 3 1, 20>0? 788,846
3, On December 31, 20x3, Entity A revalues the equipment at a fair value o! P820,000, There is no
change in the residual value and the remaining useful life of the asset. Hoy much is thg
revaluation surplus on December 31, 20x3? 31,154
'The investment property is estimateg to have a remaining useful life of 10 years and a residual value equal
to 5% of initial cost.
l. Enfity A uses the staight Ime method of depreciation. How much is the canying of the investment
prOperty under the cpst model after one year?
2, Enüty A uses the sfraight line method of The invesunent property has a fair value of P9S0,000 at the
end of Year l. How much is the carrying amount of the investment propelty under the fair value
model after one year?
2, The equipment has an estimated useful life of 10 years and a residual value of P200,000. Entity A
uses the might line method of depreciation. How much is the carrying amount ofthe equipment on
December 3 1, 20>0? 788,846
3, On December 31, 20x3, Entity A revalues the equipment at a fair value o! P820,000, There is no
change in the residual value and the remaining useful life of the asset. Hoy much is thg
revaluation surplus on December 31, 20x3? 31,154
depreciation dunng a
production dunng the
no change in
c. A PPE that is idle and withdrawn from active use d, A PPE that is donated to an extemal party
12. The distinguishing chuacteristic that identifies an investment property from the other assets of an entity is a,
changes in fair value of the asset is recognized in profit or loss.
b. the property does not derive cash flows separate from the other assets of the entity.
c. it generates separately identifiable cash flows from the other assets of the entity. d', it
earns rental as part of the ordinary operations of the entity.
A 13. Under dlis model, an invesUnent property' is measured at cost less accumulated depreciation and
accumulated impainnent losses.
a. Impairment loss model c. Fair value model
b. Cost model d. Gorgeous model
14. According to PAS 16, die selection of an appropnate depreciation rests upon fre entity's
h a. management.
b. accountant.
c. regulator,
d. all of these
15. Which of the following is not one of the essential characteristics of a
PPE? a, tangible asset b, used in business c, primarily held for sale
d. long-term in nature
161 PAS 16 requires an entity to review the depreciation method and the estimates q(useful lifq end residual
value at the end of each year-end. A change in any of these is accounted for using
17. If plotted on a graph (X-axis: time; Y-axis: P), the depreciation charges under the straight.line method would
show
a. a straight-line.
b. an upward line sloping to the right.
c. a downward line sloping to the left.
d. a curvilinear line sloping and there.
QUIZ 1 on CONCEPTUAL FRAMEWORK and ACCOUNTING STANDARDS
1. MULTIPLE CHOICE: Choose the letter of the best answer. No erasures or any form of
alterations are allowed
1. Which of the following is not classified property, plant and equipment?
a. Land held for future plant site
b. Building used in business
c. Equipment held for environmental and safety reasons
d. Minor spare parts and short-lived stand-by equipment
Which of the following does not fonn part of the initial cost of an item of PPE?
a. Purchase price, net oftrade discounts and rebates
b. Freight Costs cc.
Installation and testing costs
d. Advertising and promotional Costs
Depreciation does not cease in which of the following instances?
a. mie item of PPE is classified as held for sale or included in a disposal group in accordance with PFRS
Which ofthe following is not an acceptable choice of depreciation method under PAS
16? a, A method that results to the same amqpnt of depreciation charge from period
to period
b. A method that is based on the levels of revenue earned
c. A composite method that is applied to a group of items of PPE
d. A retiremen method thatrecognizes deprecjation when a smdl item ofPPE retired The
doreciation method prescribed by P," 16 is
a. S&aight line c. units of production
b. Diminishing balance d. none
According to PAS 16, an entire class of PFE is subsequently measured under the
a. Cost model c. fair value model b, Revaluation
model d. a orb
1
the next two questions:
1. Entity A uses the line method of depreciation. How much is the carrying amount of the
straight
inNesbnent propertypunder the cost model after one year?
2. Entity A uses the straight line method of depreciation. The investment property has a fair value
of P980,000 at the end of Year 1. How much is the carrying amount of the investment property
under the fair value model aser one year†
2. The equipment has an estimated usetiil life of 10 years and a residual value of P200,000. Entity A
uses the straight line method of depreciation. How muGh is the carrying amount of the equipment
on December 31, 20x3? 788,846
3. On December 31, 20x3, Entity A revalues the equipment at a fair value o( P820,000, There is no
change in the residual value and the remaining useful life of the asset. How lunch is thy revaluation
surplus on December 31, 20x3† 31,154
1. Entity A uses the line method of depreciation. How much is the carrying amount of the
straight
inNesbnent propertypunder the cost model after one year?
2. Entity A uses the straight line method of depreciation. The investment property has a fair value
of P980,000 at the end of Year 1. How much is the carrying amount of the investment property
under the fair value model aser one year†
2. The equipment has an estimated usetiil life of 10 years and a residual value of P200,000. Entity A
uses the straight line method of depreciation. How muGh is the carrying amount of the equipment
on December 31, 20x3? 788,846
3. On December 31, 20x3, Entity A revalues the equipment at a fair value o( P820,000, There is no
change in the residual value and the remaining useful life of the asset. How lunch is thy revaluation
surplus on December 31, 20x3† 31,154
1. Entity A uses the line method of depreciation. How much is the carrying amount of the
straight
inNesbnent propertypunder the cost model after one year?
2. Entity A uses the straight line method of depreciation. The investment property has a fair value
of P980,000 at the end of Year 1. How much is the carrying amount of the investment property
under the fair value model aser one year†
2. The equipment has an estimated usetiil life of 10 years and a residual value of P200,000. Entity A
uses the straight line method of depreciation. How muGh is the carrying amount of the equipment
on December 31, 20x3? 788,846
3. On December 31, 20x3, Entity A revalues the equipment at a fair value o( P820,000, There is no
change in the residual value and the remaining useful life of the asset. How lunch is thy revaluation
surplus on December 31, 20x3† 31,154
.The aasot is being depreciated using the units of production method and there is no production dunnb thc
c.The asset is classified as held for sale under PFRS 5.
4. -The asset becomes idle or is & en out of active use.
h+ PROBLEM F LYING: Show your solutions. No solution, no credits. Encircle and double rule your final
answor. (3pts. Each)
The equipment has a useful life or io ,>is «d « residual value of Php90,000.00. Entity A uses the
straight line method of depreciation.
On December 31, 20x2, Enéty A revalues the equipment at a fair value of 820,000. There is no ciiaiigc
in
ti c z n al value and thG remaining useful life. ) fi › +°z °z âg
2. Bnèç B sclls a machine gs PPE for Php1,700,000.00. Entity B flys the bi oder u l0%8
that jp as follows:
conuoission. Infono8ôon on Php19OO,OOOOO
Can:y’mg amount 4OO,OOŒOO
RcvaluaÑon Supfus
}{pw much is the gain (loss) bom the sale7
ollowing qualifies for classification as an investment property?
o currently being developed for fixture use as investment prop
2P y that is currently being developed for future use as owner-occupied property
out to another entity under a finance lease
t clod from another entity and leased out under various operaiing sub-leases
iiing characteristic that identifies an investment property from the other assets of an entity
is fi fair value of the asset is recognized in profit or loss.
ertf does not derive cash flows seoarate from the other
separately identifiable cash dows from the other
it rental as part of the ordinary operations of tire entity.
of
RATING:
DATC:
MULTIPLE C HOICE: ChOOSe the letter of the best answer. No mesures or any form of
alleretions are allowed