Conceptual framework and accounting standards 2

1. On Jan. 1. 2020, an investor purchased 20,000 shares of the 100.000 outstanding shares of another entity at 100 per share. The investment represents a 20% equity interest and the investor has a significant influence over the investee. What is the correct journal entry?

Select the correct response:

a. Debit-Investment in Associate 2.000.000. Credit-Cash 2.000.000

b. Debit-Investment in Associate 2.000.000, Credit-Investment Income2,000,000

c. Debit-Investment in Associate 4.000.000. Credit-Cash 4.000.000

d. None of the choices

2. The investee reported net income of P3.000.000 for 2020. The investor recognized a share of the net income of the investee equal to 20% of P3.000.000. What should be the entry?

Select the correct response:

a. Debit-Investment in associate. 600.000 Credit-Cash. 600,000

b. Debit-Investment in associate, 3.000.000 Credit-Investment income. 3,000,000

c. Debit-Investment in associate, 600,000 Credit-Investment income. 600,00

d. None of the choices

3. The investee reported a net loss of P1.000.000 for 2021. The investor recognized a share in the net loss of the investee equal to its 20%. How will you record it?

Select the correct response:

a. None of the choices

b. Debit-Loss on investment 200.000 Credit- Investment in associate 200,000

c.Debit-Loss on investment 1.000.000 Credit- Investment in associate 1,000,000

d. Debit-Loss on investment 200.000 Credit-Cash 200.000

4. Accounting for impairment has the following main accounting issues to consider, which is not?

Select the correct response:

a. Indication of possible impairment

b. Recognition of impairment loss

c. Measurement of the recoverable amount

d. None of the choices

5. is measured as the present value or discounted value of future

net cash flows expected to be derived from an asset.

Select the correct response:

a. Pretax discount

b. Pretax cash flows

c. Value in use

d. None of the choices

6.The ____ is recognized in profit or loss and presented separately in the income statement.

a. Impairment loss

b. none of the choices

c. depreciation

d. impairment

7.An entity produced milk for sale to local and national ice cream producers. The entity began operations at the beginning of current year by purchasing 500 milk cows for P8.000.000. What is the correct entry to record the acquisition of milking cows?

Select the correct response:

a. None of the choices

b. Debit- Biological Assets 8.000.000 Credit-Accounts Payable 8.000.000

c. Debit-Milking Cows 8.000.000 Credit- Cash 8.000.000

d. Debit-Biological Assets 8.000.000 Credit- Cash 8.000.000

8. An entity produced milk for sale to local and national ice cream producers. The entity began operations at the beginning of current year by purchasing 500 milk cows for P8,000,000. There has been change in fair value due to growth and price change amounting to goo.ooo. What is the correct entry to record the change in fair value?

Select the correct response:

a. None of the choices

b. Debit-Biological Assets 900.000 Credit-Gain from biological assets 900.000

c. Debit-Cash 900.000 Credit- Gain from biological assets go0.000

d. Debit- Biological Assets 8,900.000 Credit-Gain from biological assets 8.900.000

9. X Company provided the following assets in a forest and farm: Bearer animals 1,000,000

Trees 300.000 Land under trees 800,000

What total amount should be reported as biological assets?

Select the correct response:

a. 800.000

b. 1.300.000

c. None of the choices

d. 1.800,000

10. ABC Company provided the following assets in the farm. Roads in Forest 700.000 Plants with dual use 1.000.000

What is the total amount of biological assets?

Select the correct response:

a. 2.700.000

b. None of the choices

c. 3.700.000

d.3,000,000