ACC221 – REVIEWER SET – A
Deadline May 13, 2024, Monday
Write your complete solutions using the prescribed CAE Quiz Sheet(s). Include all necessary and relevant
journal entries. Enclose your final answer using a box.
Not following instructions will have corresponding demerits. Strictly no erasures.
1. An entity provided the following information for the current year:
January 1 Projected benefit obligation (10% discount rate) 3,500,000
During the year Pension benefits paid to retired employees 250,000
Past service cost 500,000
Actuarial loss 200,000
Current service cost 700,000
What amount should be reported as projected benefit obligation on December 31?
2. During the current year the entity reported fair value of plan assets on January 1 P3,500,000,
market related value of plan assets P2,800,000, contribution to plan P280,000, actual return on
plan asset P370,000 and benefits paid to retirees P250,000. The discount rate is 10%. What
amount should be reported as fair value of plan assets on December 31?
3. On January 1, 2022, an entity had 200,000 ordinary shares outstanding. The following
transactions occurred during the year:
March 1 120,000 ordinary shares were issued
May 1 6,000 ordinary shares were reacquired as treasury
October 1 100,000 cumulative preference shares were issued. Each preference
share can be converted into 3 ordinary shares. The preference dividend
per share is P5.
November 1 A 10% bonus issue on the ordinary shares were distributed.
December 31 Net income for the year is P3,500,000
What amount of basic EPS should be presented on December 31, 2022?
What amount of diluted EPS should be presented on December 31, 2022?
4. An entity provided the following shareholders’ equity on December 31, 2022:
Cumulative preference share capital, P100, 8% 500,000
Ordinary share capital, P100 par 1,100,000
Share premium 200,000
Retained earnings 260,000
Treasury ordinary shares – 1,000 at cost (150,000)
Dividends on preference shares are in arrears for 2021 and 2022. What is the book value per
ordinary share on December 31, 2022?
5. An entity had retained earnings of P3,300,000 at the beginning of 2022. Throughout 2022, the
entity had 20,000 ordinary shares of P100 par value that are issued and outstanding. During
2022, the entity reported net income of P5,500,000, purchased treasury shares for P600,000,
declared cash dividends of P1,800,000, reissued all treasury shares at a gain of P150,000, and
declared and issued a 10% ordinary share bonus issue when the market value was P150 per
share. What amount should be reported as retained earnings on December 31, 2022?
6. An entity had two classes of shares outstanding, 10% P100 par preference share capital and P50
par ordinary share capital. During the fiscal year ending December 31, 2022, the entity had the
following transactions affecting shareholders’ equity:
Retirement of preference shares 5,000 P250 per share
ACC221 – REVIEWER SET – A
Deadline May 13, 2024, Monday
Write your complete solutions using the prescribed CAE Quiz Sheet(s). Include all necessary and relevant
journal entries. Enclose your final answer using a box.
Not following instructions will have corresponding demerits. Strictly no erasures.
Purchase of treasury ordinary shares 10,000 80 per share
Share split, par value reduced to P25 2 for 1
Reissue of treasury ordinary shares 10,000 50 per share
The balances in the shareholders’ equity on December 31, 2021 were: Preference share capital
30,000 shares, P3,000,000; Ordinary share capital, 100,000 shares, P5,000,000; Preference share
premium, P1,500,000; Ordinary share premium, P4,000,000; and Retained earnings P6,000,000.
Dividends were paid at the end of the current fiscal year on the ordinary shares at P20 per share
and on the preference shares at the preference rate. Net income for the year is P4,500,000.
What amount should be reported as additional paid in capital and retained earnings on
December 31, 2022?
7. On January 1, 2022, an entity issued share appreciation rights to its president exercisable for one
year beginning January 1, 2024 provided that the president is still in the employ of the company
at that date of exercise. Each right provides for a cash payment equal to the excess of the entity’s
share price over P50. The equivalent number of shares for share appreciation rights will be
based on the level of sales at the date of exercise. The number of equivalent shares is 20,000 if
the level of sales is P4,000,000 to P6,000,000 and 30,000 shares if the level of sales is over
P6,000,000. The actual sales achieved total P5,000,000 in 2022 and P7,000,000 in 2023. The
share prices are P90 in 2022 and P85 in 2023. What amount should be reported as
compensation expense for 2023?
8. An entity provided the following data:
December 31, 2021 December 31, 2022
Accounts receivable 840,000 780,000
Inventory 1,500,000 1,400,000
Accounts payable 950,000 980,000
Total sales were P12,000,000 for 2022 and P11,000,000 for 2021. Cash sales were 20% of total
sales each year. Cost of goods sold was P8,400,000 for 2022. Variable general and administrative
expenses for 2022 were P1,200,000. The variable expenses have varied in proportion to sales.
Variable expenses have been paid 50% in the year incurred and 50% the following year. Fixed
expenses, including P350,000 depreciation and P50,000 bad debt expense, totaled P1,000,000
each year. Eighty percent of fixed expenses involving cash paid in the year incurred and 20% the
following year. Each year there was a P50,000 bad debt estimate and P50,000 write-off.
What amount was collected by an entity from customers during 2022?
What amount was disbursed by an entity for purchases during 2022?
What amount was disbursed by an entity for fixed and variable expenses during 2022?
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