Listed below are selected transactions of Lychee’s Department Store for the current year ending December 31. 1. On December 5, the store received P4,500 from the Fruit Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15 the following year. 2. During December, cash sales totaled P798,000, which includes the 12% VAT that must be remitted to the BIR by the 5th day of the following month. 3. The store determined it will cost P100,000 to restore the area surrounding one of its building when the store is closed in 4 years. The present value of restoration is P64,000. 4. As a result of uninsured accidents during the year, personal injury suits for P350,000 and P60,000 have been filed against the company. It is the judgment of Lychee’s legal counsel that an unfavorable outcome is unlikely in the P60,000 case but that an unfavorable verdict approximating P250,000 (reliably estimated) will probably result in the P350,000 case. 5. Lychee’s Hybe store division consisting of 12 stores in Pangasinan is uninsurable because of the special risk of injury to customers, employees, and losses due to severe weather and subpar construction standards in older malls. During the year, it is considered one of the safest (luckiest) in the division’s history because no loss due to injury or casualty was suffered. Having suffered an average of three casualties a year during the rest of the past decade (ranging from P60,000 to P700,000), management is certain that next year the company will probably not be so fortunate. How much are the total liabilities related to the foregoing transactions? answer- P404,000
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16. Listed below are selected transactions of Lychee’s Department Store for the current year ending
December 31.
1. On December 5, the store received P4,500 from the Fruit Players as a deposit to be returned
after certain furniture to be used in stage production was returned on January 15 the following
year.
2. During December, cash sales totaled P798,000, which includes the 12% VAT that must be
remitted to the BIR by the 5th day of the following month.
3. The store determined it will cost P100,000 to restore the area surrounding one of its building
when the store is closed in 4 years. The present value of restoration is P64,000.
4. As a result of uninsured accidents during the year, personal injury suits for P350,000 and
P60,000 have been filed against the company. It is the judgment of Lychee’s legal counsel that
an unfavorable outcome is unlikely in the P60,000 case but that an unfavorable verdict
approximating P250,000 (reliably estimated) will probably result in the P350,000 case.
5. Lychee’s Hybe store division consisting of 12 stores in Pangasinan is uninsurable because of
the special risk of injury to customers, employees, and losses due to severe weather and subpar
construction standards in older malls. During the year, it is considered one of the safest
(luckiest) in the division’s history because no loss due to injury or casualty was suffered. Having
suffered an average of three casualties a year during the rest of the past decade (ranging from
P60,000 to P700,000), management is certain that next year the company will probably not be
so fortunate.
How much are the total liabilities related to the foregoing transactions?
answer- P404,000
17. The following are an excerpt from the consolidated statement of comprehensive income of Lychee
Holdings Inc. and Subsidiaries for the year ended December 31, 2020:
• Real estate income- P4,033,266
• Share in net earnings of associates and a joint venture- P234,864
• Interest income- P84,186
• Other income- P444,737
• Costs and Expenses in Real estate- P1,900,536
• Interest expense 439,174
• General and administrative expenses P266,738
• Other charges- P25,512
• Income Tax Expense (Current)- P524,695
• Income Tax Expense (Deferred)- P29,083
• Net Income Attributable to Non-controlling interests- P11,912
• Unrealized gain on a financial asset at fair value through OCI, net of tax effects- P7,966
• Remeasurement gain (loss) on defined benefit plan, net of tax effects- P(2,700)
How much is the total comprehensive income to be presented in the statement of comprehensive
income for the year ended December 31, 2020?
answer- P1,674,747
19. Kiwi Company was incorporated on July 1, 2021, with P8,000,000 from the issuance of shares and
borrowed funds of P1,200,000. During the remainder of 2021, the company profit was P400,000. On
December 15, Kiwi paid P32,000 cash dividends. No additional activities affected the owner’s equity in
2021. On December 31, 2021, Kiwi Company’s liabilities had increased to P1,504,000.
In Kiwi’s December 31, 2021
a) P11,072,000
b) P9,600,000
c) P9,872,000-answer
d) P12,576,000
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