Activity
3.1
Name : Chrismae Santos BSMA-3
Direction: Provide what is asked. Show your solution. No solutions means wrong.
Use the following information for the next seven questions:
SOBRIQUET NICKNAME Co. operates in a hyperinflationary economy. Its unrestated financial
statements are provided below:
SOBRIQUET
NICKNAME Co.
Statement of
financial position
As of December 31,
20x2
20x2 20x1
ASSETS
Cash 80,000 60,000
Accounts receivable 160,000 120,000
Allowance for doubtful accounts (40,000) (20,000)
Inventory (at cost) 200,000 160,000
Land (at cost) 400,000 400,000
Building (at cost) 2,000,000 2,000,000
Accumulated depreciation (800,000) (600,000)
Total assets 2,000,000 2,120,000
LIABILITIES AND EQUITY
Accounts payable 80,000 188,000
Loan payable 400,000 320,000
Total liabilities 480,000 508,000
Share capital 1,200,000 1,200,000
Retained earnings 320,000 412,000
Total equity 1,520,000 1,612,000
Total liabilities and equity 2,000,000 2,120,000
SOBRIQUET NICKNAME Co.
Statement of profit or loss and other
comprehensive income
For the year ended December 31, 20x2
Sales 1,600,000
Cost of sales:
Inventory, January 1 160,000
Purchases 1,200,000
Total goods available for sale 1,360,000
Inventory, December 31 (200,000) (1,160,000
)
Gross income 440,000
Depreciation expense (200,000)
Distribution costs (140,000)
Bad debts expense (20,000)
Finance cost (40,000)
Profit before tax 40,000
Income tax expense (12,000)
Profit for the year 28,000
Other comprehensive income -
Total comprehensive income for the year 28,000
Additional information:
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The land and building were acquired on April 1, 20x0.
The share capital was issued on March 1, 20x0.
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Sales, purchases, and expenses (except interest expense) were incurred evenly during the year.
Interest expense was recognized and paid on December 31, 20x2.
Dividends of ₱120,000 were declared and paid on December 31, 20x2.
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Selected values of general price indices (CPI)
are shown below: March 1, 20x0…
..............................................................
100
April 1, 20x0…......................................100
Average for 20x1…................................110
December 31, 20x1…............................120
Average for 20x2…................................125
December 31, 20x2…..............................140
1. How much is the restated total assets in the 20x1 comparative
statement of financial position? a. 2,910,303 b. 3,004,604 c. 3,
028,640 d. 2,910,340
• Answer: A- 2 910 303
2. How much is the restated total liabilities in the 20x1 comparative
statement of financial position? a. 592,677 b. 508,000 c.
584,767 d. 592,667
• Answer: A- 592 667
3. How much is the restated total assets in the 20x2
statement of financial position? a. 2,664,000 b. 2,894,00
c. 2784,000 d. 2,646,000
• Answer: A- 2 664 000
4. How much is the restated total liabilities in the 20x2
statement of financial position? a. 520,000 b. 480,000
c. 460,000 d. 540,000
• Answer: B- 480 000
5. How much is the restated profit?
a. 13,636 b. (13,636) c. (13,726) d. 13,726
• Answer: B- (13 636)
6. How much is the gain (loss) on net monetary position
(purchasing power gain or loss)? a. 28,420 b. (28,420) c.
28,240 d. (28,240)
• Answer: C- 28 240
7. How much is the restated retained earnings on
December 31, 20x2? a.637,636 b.
540,000 c. 637,663 d. 504,000
• Answer: D- 504 000
The next two items are based on the following information:
Rice Wholesaling Corp. accounts for inventory on a FIFO basis. There were 8,000 units in
inventory on January 1, 20x3. Costs were incurred and goods purchased as follows during
20x3:
20x3 Historical Units Units sold
costs purchased
1st qtr. 410,000 7,000 7,500
2nd qtr. 550,000 8,500 7,300
3rd qtr. 425,000 6,500 8,200
4th qtr. 630,000 9,000 7,000
Totals 2,015,000 31,000 30,000
Rice estimates that the current cost per unit of inventory was ₱57 at January 1, 20x3, and ₱71 at
December 31, 20x3.
8. How much is the December 31, 20x3 inventory
restated to current cost? a. 576,000 b.
585,000 c. 630,000 d. 639,000
• Answer: D- 639 000
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9. How much is the 20x3 cost of goods sold
https://www.coursehero.com/file/73643516/SANTOS-Activity-31docx/ restated to current cost?
a. 1,920,000 b. 1,944,000 c. 2,100,000 d. 2,130,000
• Answer: D- 2 130 000
10.Fair Value, Inc., paid ₱1,200,000 in December 20x7 for certain of its inventory. In December
20x8, one half of the inventory was sold for ₱1,000,000 when the replacement cost of the
original inventory was ₱1,400,000. Ignoring income taxes, what amount should be shown as
the total gain resulting from the above facts in a current value accounting income
statement for 20x8?
a. 200,000 b. 300,000 c. 400,000 d. 500,000
• Answer: D- 200 000
Solutions:
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https://www.coursehero.com/file/73643516/SANTOS-Activity-31docx/
This study source was downloaded by 100000798142953 from CourseHero.com on 12-19-2021 08:17:53 GMT -06:00
https://www.coursehero.com/file/73643516/SANTOS-Activity-31docx/
This study source was downloaded by 100000798142953 from CourseHero.com on 12-19-2021 08:17:53 GMT -06:00
https://www.coursehero.com/file/73643516/SANTOS-Activity-31docx/
“Thousands of candles can be lighted from a single candle, and the
life of the candle will not be shortened. Happiness never
decreases by being shared.” – (Buddha)
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