Quiz-3-MT-BRING-HOME-Statement-of-Changes-in-Equity - Statement-of-Cash-Flows - NCA-held-for-sale 2

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Name: ____________________________ Subject: ACC 311 – INTERMEDIATE ACCOUNTING 3

TRUE OR FALSE. Write TRUE if the statement is correct and FALSE if otherwise. (10 points)

1. Net income increases the balance of total equity.


2. Dividends decreases the balance of retained earnings.
3. Additional issuance of share capital increases the balance of total equity.
4. Under accrual basis, net income is usually the same as net cash flow from operating activities.
5. The statement of cash flows must be prepared using the direct method.
6. Depreciation expense is deducted to net income to determine net cash flow from operating activities.
7. Cash receipts from the sale of property, plant and equipment are classified as financing activities.
8. Cash payments from acquisition of intangible assets are classified as investing activities.
9. Noncurrent asset held for sale are initially and subsequently measured at lower of carrying amount
and fair value less cost to sell
10. Noncurrent assets classified as held for sale shall continue to be depreciated or amortized during its
useful life.

MULTIPLE CHOICE. Write in CAPITAL LETTER the correct answer. (15 points)

11. An entity shall measure a noncurrent asset or disposal group classified as held for sale at
A. Carrying amount
B. Fair value less cost of disposal
C. Lower between carrying amount and fair value less cost of disposal
D. Higher between carrying amount and fair value less cost of disposal

12. What is the treatment of any gain on a subsequent increase in the fair value less cost of disposal of a
noncurrent asset classified as held for sale?
A. The gain shall be recognized in full
B. The gain shall not be recognized
C. The gain shall be recognized but not in excess of the cumulative impairment loss previously
recognized
D. The gain shall be recognized but only in retained earnings

13. When a component of a business has been discontinued during the year, the component’s operating
loss of the current period should be included in
A. Income statement as part of revenue and expenses
B. Income statement as part of the loss on the discontinued operation
C. Income from continuing operations
D. Retained earnings

14. Under IFRS, an entity can report interest expense in the statement of cash flows
A. In operating activities
B. Either in operating activities or financing activities
C. In financing activities
D. In investing activities or financing activities

15. In a statement of cash flows using indirect approach for operating activities, an increase in inventory is
presented as
A. Outflow of cash
B. Inflow and outflow of cash
C. Addition to net income
D. Deduction from net income

1
YUNA Co.’s total shareholder’s equity on January 1, 2021 was P180,000. The following were the
transactions during the year:

 YUNA issued additional share capital amounting to P360,000


 Total income earned amounted to P1,000,000
 Total expenses incurred amounted to P560,000
 YUNA declared dividends of P140,000

16. How much is the total shareholder’s equity on December 31, 2021?
A. 840,000
B. 700,000
C. 640,000
D. 540,000

EUGEO Co. reported profit of P340,000 for the year ended December 31, 2021. Depreciation expense
for the year was P100,000. The following are the changes in the operating assets and liabilities of
EUGEO Co. during 2021:

2021 2020
Accounts receivable P560,000 P300,000
Accounts payable 240,000 120,000

17. How much is the net cash from operating activities?


A. 300,000
B. 580,000
C. 820,000
D. 100,000

The following were cash transactions of SINON Co. during the period:

Cash receipts from sale of goods P650,000


Cash paid for purchases of inventory 340,000
Cash receipts on loans taken from a bank 200,000
Cash paid for interest expense 20,000
Cash payment for the acquisition of property, plant, and equipment 180,000

18. How much is the net cash from/(used) in operating activities?


A. 155,000
B. (165,000)
C. 290,000
D. (300,000)

19. How much is the net cash from/(used) in investing activities?


A. 170,000
B. (180,000)
C. 20,000
D. 0

2
The comparative statement of financial position and statement of comprehensive income of ASUNA
Co. on December 31, 2021 are shown below:

Additional information:

 Equipment with carrying amount of P240,000 was sold for P200,000 resulting on a loss on sale of
P40,000
 Acquisition of equipment for cash amounted to P800,000
 Dividends paid totaled P90,000

20. How much is the cash flows from/(used) in operating activities?


A. 930,000
B. (950,000)
C. 400,000
D. (400,000)

21. How much is the cash flows from/(used) in investing activities?


A. 620,000
B. (600,000)
C. 400,000
D. (400,000)

22. How much is the cash flows from/(used) in financing activities?


A. 440,000
B. (440,000)
C. 85,000
D. (90,000)

3
KIRITO Co. classified machinery as held for sale on December 31, 2020. The carrying amount of the
machinery is P5,000,000 and fair value less cost to sell is P4,200,000 on this date.

On December 31, 2021, the machinery was not sold however the delay is due to factors beyond the
control of the entity. The fair value less cost to sell is P3,900,000.

23. How much is impairment loss for 2020?


A. 0
B. 700,000
C. 600,000
D. 800,000

24. What is the measurement of machinery held for sale on December 31, 2020?
A. 5,000,000
B. 4,200,000
C. 3,900,000
D. 4,000,000

25. How much is impairment loss for 2021?


A. 0
B. 200,000
C. 100,000
D. 300,000

END OF QUIZ

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