1. Listed in random order below are the balance sheet figures of Qalam Ltd as at 31 March 2006: Trade receivables ? 50,000 Trade payables ? 30,000 Building ? 90,000 Share capital ? 100,000 Bank loan ? 40,000 Inventories ? 10,000 Cash and cash equivalents ? 20,000 Reserves ? 50,000 Intangible assets ? 30,000 Treasury shares ? 20,000 Equipment ? 40,000 Retained earnings ? 40,000 The owners's equity is:

2. Kemp Company issued 4,000 P1,000 convertible bonds at par, with an annual interest rate of 5% when the market rate was 8%. The bonds are due in 5 years and each P1,000 bond is convertible into 3 ordinary shares. At what amount should the liability component of the bond be recognized? Round off PV factor to three decimals.

3.

Kalinga Company revealed the following shareholder's equity at year-end: Preference share capital, P100 par 1,725,000 Share premium - PS 603,750 Ordinary share capital, P15 par 3,937,500 Share premium 1,375,000 Subscribed ordinary share capital 375,000 Retained earnings 1,425,000 Note payable 3,000,000 Subscriptions receivable - ordinary 300,000 How much is the legal capital?Denver Company, a calendar-year corporation, had the following actual income before income tax expense and estimated effective annual income tax rates for the first three quarters in 2008: Estimated Effective Income Before Annual Tax Rate at the Quarter Income Tax Expense End of Each Quarter First $100,000 30% Second $140,000 24% Third $180,000 30% Denver's income tax expense in its interim income statement for the third quarter should be