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The following information was obtained from the records of SA Suppliers at 31 December 2019. SA Suppliers is not registered as a VAT vendor and uses the perpetual inventory system.
1.Inventory sold for cash--R5 000
2.Inventory purchased on credit--R2 000
3.Inventory purchased for cash--R700
4.Depreciation on motor vehicles --R1 100
5.Office furniture purchased on credit---R3 000
6.Proceeds from the sale of redundant furniture--R500
7.Inventory previously purchased on credit, returned to supplier---R390
Which of the above transactions will be recorded in the cash receipts journal of SA Suppliers at 31 December 2019?
A. (4), (5) and (6)
B. (1), (3), (4) and (5)
C. (1) and (6)
D. (3) and (4)
Prepare the Pro Forma Statement of financial position of Govan limited as at 31 December 2021
- Bought a car for his own use worth RM112,000 by paying cash (company’s money) of RM12,000 and signing a note payable for the balance.
How would you present and explain the following fundamental accounting concepts to the Grade 10 Accounting learners in your class?
a) Cost principle
b) Materiality principle
c) Going principle (20)marks
Effective planning is essential to good instruction”. Suppose you are the subject head of Accounting at your school, inform the other teachers of the requirements for initial instruction of Accounting
(20) marks
On January 1, 2021, Pluto Company has investment in equity designated as at Fair value through Other Comprehensive Income with a fair value of P 600,000. These securities were acquired a year ago at a cost of P 625,000. On March 31 2021. Pluto Company exchanged these securities for a piece of land from Mars Company. The carrying amount of the land in books Marks Company was P480,000 and has a zonal value of P 800,000. At the time of exchange , the shares which was publicly listed, has a fair value of P 650,000
Based on the above data, answer the following:
1. Compute for the gain on exchanges to be recognized in 2021 equity
a. Nil c. P 25,000
b. P50,000 d. P 175,000
2. The necessary journal entry on March 31, will include a debit to financial at FVTOC, P 600,000
a. Debit to financial asset at FVTOCI, P 600,000
b. Debit to land P 650,000
c. Credit gain on exchange, P 25,000
d. Debit to loss on exchange, P 25,000
Uranus Company owns 8,000 convertible preference shares of which was acquired in 2020 at cost of P 400,000. The investment was classified as trading securities. On December 31, 2020, the fair value of the preference share was P 425,000. On March 31,2021, Uranus Company converted the 4,000 preference shares into 6,000 shares of ordinary shares, when the market price was P 50 per share for the preferences shares and P 40 per share for the ordinary shares.
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Based on the above data, answer the following:
1. Compute for the gain on exchange to be recognized in 2021
a. Nil c. P 27,500
b. P 40,000 d. P 60,000
2. The necessary journal entry on march 31, will not include a
a. Debit to Investment in Trading-Ordinary shares, P 240,000
b. Credit to Investment in Trading -Pref, shares, P27,500
c. Credit Gain on exchange, P27,500
d. Credit to Investment in Trading Pref, shares, P 212,500
On December 29, 2021, bifurcation Company commits itself to purchase a financial asset to be classified as held for trading for P 600,000, its fair value on commitment (traded) date. The security has a fair value of P 601,000 and P 602,000 on December 31, 2021 (Bifurcation’s financial year-end), and January 5, 2022 (settlement date), respectively
Based on the above data, answer the following:
1. If Bifurcation applies the trade date accounting method to account for regular-way purchases of its securities, how much should be recognized as trading securities on December 31, 2021?
a. P 600,000 c. P 602,000
b. P601,000 d. P 0
2. If Bifurcation applies the settlement date accounting method to account for regular-way purchase of its securities, how much should be recognized as trading securities on December 31, 2021?
a. P 600,000 c. P 602,000
b. P601,000 d. P 0
On June 15, 2021 Mars Company owns 10,000 shares with a cost P 700,000 of Moon Company’s stocks. During the same period, Moon Company right to existing shareholder. Mars received 10,000 stock rights entitling him to purchase 5,000 new shares at P 80. The ordinary share was trading ex rights. On July 15,2021 mars exercised all the stocks rights. The share is quoted right on at P90.
1. Assuming that the above securities are FVTPL, the cost of the investment acquired through exercised of stocks rights should be
a. Nil c. P600,000
b. P400,000 d. None of the choices
2. Assuming that the above securities are FVTOCI, the cost of the investment acquired through exercised of stocks rights should be
a. Nil c. P600,000
b. P400,000 d. None of the choices
On June 15, 2021 Mars Company owns 10,000 shares with a cost P 700,000 of Moon Company’s stocks. During the same period, Moon Company right to existing shareholder. Mars received 10,000 stock rights entitling him to purchase 5,000 new shares at P 80. The ordinary share was trading ex rights. On July 15,2021 mars exercised all the stocks rights. The share is quoted right on at P90.
Question:
Based on the above data, answer the following:
1. Assuming that the above securities are FVTPL, the stock rights should be initially recognized at
a. Nil c. P100,000
b. P200,000 d. None of the choices
2. Assuming that the above securities are FVTOCI, the stocks rights should be initially recognized at
a. Nil c. P100,000
b. P200,000 d. None of the choices
