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1. 4. Charm Company reported the following income statement for 2003: Glory Corporation's "Machinery and Equipment" account as of December 31, 2003 is Sales P3,900,000 analyzed as follows: Cost of goods sold 2,600,000 Accumulated Operating expenses paid for in cash 650,000 Cost Depreciation Depreciation 350,000 Acquired in December 2000 4,000,000 1,600,000 The general price index at the beginning of the year was 120. During the year, the Acquired in December 2002 1,000,000 200,000 index averaged 130 and stood at 140 by December 31. Pertinent index numbers at the end of each year are: All sales, purchases and cash expenses accrued evenly throughout the year. 2000 120 Depreciation relates to the equipment acquired when the index was 100. 2002 125 Assuming there is no purchasing power gain or loss on net monetary items, net income 2003 140 in a constant purchasing power income statement is: A hyperinflationary balance sheet prepared as of December 31, 2003 should include machinery and equipment net of accumulated depreciation of: (2) P300,000 (2) P2,016,000 (b) P700,000 (b) P7,000,000 (9) P350,000 (C) P3.696,000 (d) P210,000 (d) P2,520,000 2. 1. East Company prepared the balance sheet shown below in accordance with GAAP on December 31, 2003; Cash P 480,000 Operating profit and loss figures for the seven segments of Hellum Company Receivables 560,000 5. are as follows: Inventory 680,000 Property, plant and equipment, net 1.340,000 An aunt P13,030.009 P3.060.000 1,200.000 Payables P1,160,000 7.800.000 Common stock 1,200,000 2,400.609) Retained earnings 700 000 600.900 600.900 P3,060.000 The cash, receivables, and payables originated when the index was 105. The inventory and PIZ.803.030 plant assets were acquired when the index was 99. The common stock was issued when the index was 90. The index number on December 31, 2003 was 108.9. What segments are reportable based on the operating profit or loss cricution? What is the balance of retained earnings restated to end-of-year constant peso? (2) P902,000 (2) Segment k, 1, m, and p (b) P645.543 (b) Segments k, m, and n (C) P650.000 (@) Segments n, o, and q (d) P700,000 (d) Nome is reportable 3. " Might Corporation purchased land for P3,000,000 on December 31, 2002 when the index was 120. The land was held until December 2003 when it was sold for P4,000,000. The index on December 31, 2003 was 140. The income statement in a hyperinflationary economy for 2003 should include how much gain or loss on the sale of land? (2) P1,000,000 gain (b) 1,000,000 loss (C) P500 000 gain (d) 500,000 lose