ACYFAR3 Quiz 2 AY2425T2

Due Feb 3 at 9:15pm Points 53 Questions 39 Available Feb 3 at 7:45pm - Feb 3 at 9:15pm 1 hour and 30 minutes Time Limit 90 Minutes

Instructions
INSTRUCTIONS
The quiz (examination) is good for 1.5 hours (90 minutes).

For problem solving, final amount should be:

• without peso sign.

• with or without comma.

• absolute amount and round off to the nearest peso (without any decimal places).

REMINDERS
1. This is a CLOSED-NOTES quiz. ONE ATTEMPT ONLY.
2. Other than your main Canvas quiz page, you are NOT allowed to open any tabs nor open any applications during the quiz time. Activity log in Canvas will strictly be monitored during
the quiz.
3. Use your calculator for calculations. You are not allowed to use Microsoft Excel, Numbers, Google Sheets, and other similar spreadsheet applications.
4. Do not put your PC/laptop/iPad/gadget on "sleep mode on". Canvas activity log might detect this as change tabs.
5. Be reminded of the provisions of Section 5.3.1.1 of the SH that states that “Cheating in any form during an examination, test, or written reports including reaction papers, case
analysis, experiments or assignments required is a MAJOR OFFENSE”.

This quiz was locked Feb 3 at 9:15pm.

Attempt History
Attempt Time Score

LATEST Attempt 1 (https://dlsu.instructure.com/courses/193765/quizzes/499960/history?version=1) 90 minutes 38 out of 53

Score for this quiz: 38 out of 53

Submitted Feb 3 at 9:15pm
This attempt took 90 minutes.

Question 1 1 / 1 pts

Which two of the following statements best describe an owner-occupied property under PAS 40?

A. Property held for sale in the ordinary course of business

B. Property held for use in the production and supply of goods and services.

C. Property held to earn rentals.

D. Property held for administrative purposes.

C and D

Correct! B and D

B and C

A and B

Question 2 1 / 1 pts

Gains or losses arising from the retirement or disposal of investment property shall be determined as the
difference between the net disposal proceeds and the carrying amount of the asset.

Correct! True
 False

Question 3 1 / 1 pts

To be classified as an asset held for sale, the sale must be expected to be completed within twelve months
after the end of the reporting period.

True

Correct! False

Question 4 0 / 1 pts

An asset that meets the criteria as held for sale after the end of the reporting period but before authorization of
financial statements should be measured at the current year-end at the lower of carrying amount and fair value
less cost of disposal.

You Answered True

Correct Answer False

Question 5 1 / 1 pts

If quoted market prices are not available on the initial recognition of a biological asset and the fair value
measurements are determined to be clearly unreliable, the biological asset shall be measured at its cost plus
accumulated depreciation and any accumulated impairment losses.

True

Correct! False

Question 6 1 / 1 pts

A gain from the initial recognition of a newborn calf is recorded as a physical change and is recorded in profit
or loss.

Correct! True

False

Question 7 1 / 1 pts
 A change in fair value of a biological asset due to harvesting is classified as

A price change

Neither a physical change nor a price change

Either a physical change or a price change

Correct! A physical change

Question 8 1 / 1 pts

Which disclosure is not required with respect to intangible assets?

Contractual commitment for the acquisition of intangible asset

Reconciliation of carrying amount at the beginning and the end of the year

Correct! Fair value of similar intangible asset used by the competitors

Useful life of the intangible asset

Question 9 1 / 1 pts

Which statement accurately describes the appropriate accounting for goodwill?

It should be recorded at cost and amortized over a 10-year period

Correct!
It should be recorded at cost and not amortized but tested for impairment on an annual basis and more often if
certain events occur.

It should be recorded at cost and amortized over 40-year period

It should be recorded at cost and tested for impairment every three years

Question 10 1 / 1 pts

Using the revaluation model for intangible assets purposes, the excess of the asset’s sound value over the
carrying amount based on cost is the revaluation surplus.

Correct! True

False

Question 11 1 / 1 pts
 The criteria to be considered for expenditures in the development phase can be recognized as an assets
includes the following, except:

Intention to complete the intangible assets and use or sell it

Correct! Ability to measure reliably the expenditure attributable to the intangible asset during its prior research

Technical feasibility of completing the intangible assets for it to be available for use or sale

Ability to use or sell the intangible asset

Question 12 1 / 1 pts

Amortization of intangible asset with a finite useful life shall commence when

Correct! It is first recognized as an asset

The cost can be measured with reasonable certainty

It is available for the intended use

It is probable that it will generate future economic benefits

Question 13 0 / 1 pts

Goodwill is not considered as intangible asset because it is not identifiable. Therefore, it should be shown
separately as one line item in the statement of financial position.

Correct Answer True

You Answered False

Question 14 1 / 1 pts

The cost of an internally generated asset includes all of the following, except

Cost of materials and services used in generating the intangible asset

Compensation costs of personnel directly engaged in generating the asset

Fees to register a legal right

Correct! Expenditure on training staff to operate the asset

Question 15 1 / 1 pts
 The goodwill shall not be amortized because its useful life is indefinite. However, goodwill shall be tested for
impairment at least annually, or more frequently if events or changes in circumstances indicate a possible
impairment.

Correct! True

False

Question 16 1 / 1 pts

If the software is purchased for the entity’s own use and is integral to the hardware, it would be treated as part
of the cost of the hardware and capitalized as property, plant and equipment.

Correct! True

False

Question 17 1 / 1 pts

Entities offer gifts in the form of other goods that are distributed to the customer upon redemption of goods or
purchase. Such gifts in kind are called __________.

Warranty

Subscription

Returnable containers

Correct! Premium

Question 18 1 / 1 pts

It is an event that creates a legal or constructive obligation because the entity has no other realistic
alternatives but to settle the obligation.

Past event

Correct! Obligating event

Current event

Subsequent event

Question 19 1 / 1 pts
 A service-type warranty provides customer services in addition to the mere assurance that the product will
function as intended based on agreed-upon specification.

Correct! True

False

Question 20 1 / 1 pts

An assurance-type warranty assures that the product will function as intended based on agreed-upon
specifications.

Correct! True

False

Question 21 1 / 1 pts

Assurance-type warranties are accounted for under PFRS 15 – Revenue from Contracts with Customers.

True

Correct! False

Question 22 1 / 1 pts

__________ agreements require the seller to correct any deficiency in quality, quantity or performance of the
merchandise sold, to replace the item, or to refund the selling price over a specified period of time after the
sale.

Returnable containers

Correct! Warranty

Bonus

Premium

Question 23 0 / 1 pts

Sale is recognized only at the time of redemption of the gift certificates by the customers.

Correct Answer True

You Answered
 False

Question 24 1 / 1 pts

An entity did not record an accrual for a present obligation but disclose the nature of the obligation and the
range of the loss. How likely is the loss?

Probable

Correct! Reasonably possible

Virtually certain

Remote

Question 25 1 / 1 pts

The outflow of economic benefits must be ________________ and the amount can be reasonably estimated
for a loss to be accrued.

Remote

Reasonably possible

Impossible

Correct! Probable

Question 26 0 / 2 pts

Robina Ltd. provided the following assets as of December 31, 2024 in a forest plantation:

Freestanding trees P2,828,264

Felled Trees 600,000

Land under the trees 8,600,000

Bearer plants 2,846,336

Living animals 3,776,079

How much is the value of the biological assets to be presented in the statement of financial position as
of December 31, 2024?

You Answered
6,604,343

Correct Answer 5,674,600

 Question 27 2 / 2 pts

Apple Company and its subsidiaries own the following properties:

Land held by Apple for undetermined future use 7,500,000

A vacant building owned by Apple to be leased out under an

4,500,000
operating lease to an unrelated party

Property held by Samsung Company, a subsidiary of Apple, in the

3,000,000
ordinary course of business

Property held by Apple for use in production 6,000,000

Building owned by Huawei Company, a subsidiary of Apple, for

which Huawei provides security and maintenance services to the 2,388,889
lessees under an operating lease

Land leased by Apple to Samsung under an operating lease 3,750,000

Property under construction to be used as investment property 9,000,000

Land held as future plant site 5,250,000

Machinery leased out by Apple to an unrelated party under an

1,500,000
operating lease

In its consolidated financial statements for the year ended December 31, 2024, how much of the above
shall be reported as investment property?

Correct!
23,388,889

Correct Answer 23,388,889

Question 28 0 / 2 pts

Equipment costing P1,550,000 when acquired on January 1, 2020, meets the criteria for classification as held
for sale on July 1, 2022. The equipment is being depreciated over 10 years on a straight-line basis. The
following additional information is available:

Fair value less cost to sell on July 1, 2022 P1,100,000

Fair value less cost to sell on December 31, 2022 P1,025,000

The entity realized the economic conditions affecting the use of the asset reversed in the middle of 2023. The
management then decided on July 1, 2023 to put back the asset to operating use. On this date, the asset’s
recoverable amount is P845,000.

What is the carrying amount of the asset to be presented in the statement of financial position in 2023?
 1,025,000

780,000 (with margin: 0)

Question 29 2 / 2 pts

Antonio Company incurred P100,000 of research and development costs to develop a product for which a
patent was granted on January 1, 2022. Legal fees and other costs associated with the registration of the
patent totaled P300,000. The patent is being amortized over its legal life. On July 1, 2024, Antonio Company
won and paid legal fees of P80,000 for the successful defense of the patent against an infringement lawsuit
filed by Tony Company.

How much is the total expenses for the year 2024?

Correct!
95,000

95,000 (with margin: 0)

Question 30 2 / 2 pts

Antonio Company incurred P100,000 of research and development costs to develop a product for which a
patent was granted on January 1, 2022. Legal fees and other costs associated with the registration of the
patent totaled P300,000. The patent is being amortized over its legal life. On July 1, 2024, Antonio Company
won and paid legal fees of P80,000 for the successful defense of the patent against an infringement lawsuit
filed by Tony Company.

How much is the amortization expense for the year 2022?

Correct!
15,000

15,000 (with margin: 0)

Question 31 2 / 2 pts

On January 1, 2024, Yen Company obtained a franchise from Euro Company to sell for 20 years Euro’s
products. The initial franchise fee as agreed upon shall be P6,000,000, and shall be payable in cash,
P1,000,000, when the contract is signed and the balance in four equal installments thereafter, as evidenced by
a non-interest-bearing note. The agreement provides that the franchisor shall provide the necessary initial
services required under a franchise contract. The agreement also provides that 5% of the revenue from the
franchise must be paid to the franchisor. Revenue from the franchise for 2024 was P5,000,000. The prevailing
interest rate for this type of note is 12%. PV of P1 for 4 periods at 12% is .6355 and PV of ordinary annuity for
4 periods at 12% is 3.0373.

How much is the initial cost of the franchise?

Correct!
4,796,625

4,796,625 (with margin: 0)

 Question 32 2 / 2 pts

Presented below is information related to copyrights owned by SHOWTIME Corporation at December 31,
2023.
Cost P2,700,000
Carrying amount 2,350,000
Recoverable amount 1,400,000

Assume SHOWTIME will continue to use this asset in the future. As of December 31, 2023, the copyrights
have a
remaining useful life of 5 years.

How much was the amortization expense for 2024?

No answer text provided.

No answer text provided.

No answer text provided.

Correct! 280000

Question 33 2 / 2 pts

At the beginning of the current year, an entity acquired a trademark for P3,000,000. The trademark has eight
years remaining in the legal life. It is anticipated that the trademark will be renewed in the future indefinitely
without problem. At year-end, the trademark is assessed for impairment. Because of a decline in economy, the
trademark is expected to generate cash flows of just P120,000 annually. The useful life of the trademark still
extends beyond the foreseeable horizon. The appropriate discount rate is 6%.

What amount should be recognized as impairment loss on trademark for the current year?

Correct!
1,000,000

1,000,000 (with margin: 0)

Question 34 2 / 2 pts

DLS Corp. acquires a patent from ANIMO Co. in exchange for 2,500 shares of DLS Corp.’s P5 par value
ordinary shares and P75,000 cash. When the patent was initially issued to ANIMO Co., DLS Corp.’s shares
were selling at P7.50 per share. When DLS Corp. acquired the patent, its shares were selling for P9 a share.
DLS Corp. should record the patent at what amount?

No answer text provided.

No answer text provided.

No answer text provided.

Correct! 97500
 Question 35 0 / 2 pts

Miracle Kasi Company is engaged in selling healing potions placed in gold-plated reusable containers.
Customers are required to pay for a deposit for each container delivered which will be refunded only when the
container is returned by the customers. The total deposits collected on containers delivered during the current
year 2023 amounted to P2,172,179. As a matter of policy the collected deposits from the customers will be
forfeited if containers are not returned within one year from the time of sale. In 2024, sixty-five percent of the
delivered containers were returned within the allotted time. Deposits charged are 125% of the actual cost of
containers. The inventory of containers remains in the company books until deposits are forfeited. Actual
forfeiture of deposits for unreturned containers will be made every December 31 of the following year from the
time of sale.

How much will be paid by the Company in 2024 as a refund for the returned containers from the
customers?

You Answered
1,129,533

Correct Answer 1,411,916

Question 36 2 / 2 pts

Miracle Company is engaged in selling healing potions placed in gold-plated reusable containers. Customers
are required to pay for a deposit for each container delivered which will be refunded only when the container is
returned by the customers. The total deposits collected on containers delivered during the current year 2023
amounted to P1,250,000. As a matter of policy the collected deposits from the customers will be forfeited if
containers are not returned within one year from the time of sale. In 2024, sixty-five percent of the delivered
containers were returned within the allotted time. Deposits charged are 125% of the actual cost of containers.
The inventory of containers remains in the company books until deposits are forfeited. Actual forfeiture of
deposits for unreturned containers will be made every December 31 of the following year from the time of sale.

What amount should be presented as non-current liability arising from the collected deposits on the
delivered containers to the customers at the end of the year 2023?

Correct!
0

0 (with margin: 0)

Question 37 0 / 2 pts

Lebron Ltd. implemented a promotional scheme of providing a free sports cap costing P185.00 and with a
selling price of P235.00 each for every 50 bottle caps of Muscle Energy Drink returned plus P50.00. It is
estimated that only 55% of the bottle caps in the hands of the customers will likely to be returned and
presented for redemption. The following are the additional information related to this program:

Quantity Amount

Muscle Energy Drink sold 150,000 1,500,000

Sports Cap purchased 3,500

Number of bottle caps redeemed 50,000

How much of the transaction price is allocated to the premiums?

 0

308,104.89 (with margin: 0)

308,105 (with margin: 0)
308,104 (with margin: 0)

Question 38 0 / 2 pts

A company gives each of its 75 employees (assume they were all employed continuously through 2022 and
2023) 12 days of vacation a year if they are employed at the end of the year. The vacation accumulates and
may be taken starting January 1 of the next year. The employees work 8 hours per day. In 2022, they made
₱21 per hour and in 2023 they made ₱24 per hour. During 2023, they took an average of 9 days of vacation
each. The company’s policy is to record the liability existing at the end of each year at the wage rate for that
year.

What amount of vacation liability would be reflected on the 2023 SFP?

You Answered
210,600

0 (with margin: 0)
216,000 (with margin: 0)
0 (with margin: 0)
0 (with margin: 0)

Question 39 0 / 2 pts

Panasony, Inc. offers a service-type warranty contracts for television set that it sells. The warranty contracts
cover a two-year period. The package of the laptop with the warranty contract sells for a total price of P25,000
that includes the warranty with a selling price of P2,500. If the customer opts not to avail the warranty, the
television set is sold for P22,500 each. The entity’s experience shows that of the total pesos spent for repairs
in warranty contracts, 45% is incurred evenly during the first year of warranty and 55% evenly during the
second year of warranty.

During 2022 and 2023, the entity sold 1,500 and 1,800 televisions sets and warranty contracts. Cost of
servicing the television sets during 2022 and 2023 amounted to P385,000 and P720,000, respectively.

How much is the total profit from warranty contracts on December 31, 2023?

You Answered
44,464,250

2,167,500 (with margin: 0)

Quiz Score: 38 out of 53