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Icct colleges foundation inc vv soliven ave ii cainta

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ICCT Colleges Foundation Inc.V.V Soliven Ave. II, Cainta, RizalCollege of Business and AccountancyTEST BANK REVIEWERRBR BACAY, CPA, CrFA, CMC, MBA, FRIAccACTG-INT1Page 294a.320b.300c.120d.100Answer: aIndex number 2023(384 / 120)320Hard4.Alvarado Company operated in a hyperinflationary economy and provided the followinginformation on December 31, 2022:Property, plant and equipment900,000Inventory2,700,000Cash350,000Share capital issued December 31, 2020400,000Noncurrent liabilities500,000Current liabilities700,000Retained earnings2,350,000The index number had moved on December 31 of each year: 2020100, 2021130, 2022150, 2023240 and 2024300. The property, plant and equipment were purchased on December 31, 2022. Thenoncurrent liabilities were loans raised on December 31, 2023. What is the balance of retained earningson December 31, 2024 after adjusting for hyperinflation?a.2,350,000b.2,750,000c.3,550,000d.2,625,000HistoricalFractionRestatedProperty, plant and equipment900,000300/1501,800,000Inventory2,700,000300/2703,000,000Cash350,000350,000Total assets3,950,0005,150,000Noncurrent liabilities500,000500,000Current liabilities700,000700,000Share capital400,000300/1001,200,000Retained earnings2,350,0002,750,000Total liabilities and equity3,950,0005,150,000
ICCT Colleges Foundation Inc.V.V Soliven Ave. II, Cainta, RizalCollege of Business and AccountancyTEST BANK REVIEWERRBR BACAY, CPA, CrFA, CMC, MBA, FRIAccACTG-INT1Page 295The retained earnings balance on December 31, 2024 of P2,750,000 is simply thebalancing figure. Thecash, noncurrent liabilities and current liabilities aremonetary. The inventory is restated using theaverage indexfor 2024 as the denominator (300 + 240 equals 540 divided by 2 equals 270).Average5.On January 1, 2020, Tiongco Company purchased equipment for P3,000,000. The equipment wasdepreciated over 10 years using straight line with no residual value. On October 1, 2023 theequipment was sold for P2,000,000. The general price index numbers are:January 1, 2020100October 1, 2023 280December 31, 2020120December 31, 2023300What is the loss on sale of equipment in hyperinflationary income statement?a.3,250,000b.3,625,000c.2,375,000d.2,678,500Answer: aCost3,000,000Accumulated depreciation (3,000,000/10 x 3.75 years)(1,125,000)Carrying amountOctober 1, 20231,875,000Sale price2,000,000Carrying amountas restated(1,875,000 x 280/100)(5,250,000)Loss on sale of equipment(3,250,000)Average6.Gatdula Company purchased land for P3,000,000 on December 31, 2020 when the indexnumber was 120. The land was held until December 31, 2021 when it was sold for P4,000,000. The indexnumber on December 31, 2021 was 300. What amount should be reported as gain or loss on sale of landin a hyperinflationary income statement?a.1,000,000 gainb.1,000,000 lossc.3,500,000 gaind.3,500,000 lossAnswer: d
ICCT Colleges Foundation Inc.V.V Soliven Ave. II, Cainta, RizalCollege of Business and AccountancyTEST BANK REVIEWERRBR BACAY, CPA, CrFA, CMC, MBA, FRIAccACTG-INT1Page 296Sale price4,000,000Cost of land asrestated(3,000,000 x 300/120)(7,500,000)Loss on sale of land(3,500,000)Hard7.Dela Pena Company reported that the financial position did not change during 2020. The generalprice index was 120 on January 1 and 300 on December 31, 2020.

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