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7.Park Hoon, sold a fast-food restaurant franchise to Jin Se-Yeon. The sale agreement signed on January 2 2016, called for a P 30,000 down payment plus two P 10,000 annual payments, representing the value of initial franchise service rendered by Park Hoon. In addition the agreement required that the Jin Se-Yeon to pay 5% of its gross revenues the franchisor; this was deemed sufficient to cover the cost and provide reasonable profit margin on continuing franchise services to be performed by Park Hoon. The restaurant open early in 2016, and its sales for the year amounted to P 500,000.jm.jn.Assuming a 10% interest rate is appropriate, Park Hoon’s 2016 total revenue will be: (the present value of annuity of P1 at 10% for 2 periods in 1.7335)jo.a. P 30,000c. P 72,335b. P 47,335d. P 74,090jp.jq.jr.js.jt.ju.jv.jw.
jx.jy.jz.ka.kb.kc.kd.8.Revelyn Andres Company showed income before income tax of P 6,500,000 on December 31, 2016. The year-end verification of the transactions reveled the following errors:ke.kf.- P 1,000,000 worth of merchandise was purchased in 2016 and included in the ending inventory. However, the purchases was recorded only in 2017.kg.- A merchandise shipment valued at P 1,500,000 was properly recorded as purchases at year-end. Since the merchandise was still at the port area, it was inadvertently omitted from the inventory balance on December 31, 2016kh.- Advertising for December 2016 amounting to P 500,000 was recorded when payment was made in January 2017ki.- Rental of P 300,000 applicable for six months was received on November 1, 2016. The entireamount was reported as income in 2016.kj.- Insurance premium covering the period from July 1, 2016 to July 1, 2017 amounting to P 200,000 was paid and recorded as expense on July 31, 2016. The entity did not make any adjustment at the end of the year.kk.kl.What is the corrected income before tax for 2016?km.a. 6,900,000c. 6,500,000b. 6,400,000d. 6,300,000kn.ko.kp.9.Kim Bubog sells its inventories under installment contract. The 2017 book of the company before necessary adjustment has provided the following data:DebitCreditkq.Installment receivable 1/1/2017 (2016 contract)P 6,000,000kr.Installment receivable 12/31/2017 (2016 contract)3,000,000ks.Installment receivable 12/31/2017 (2017 contract)5,000,000kt.2017 Installment Sales ( exclusive of sales of repossessed inventory) 10,000,0000ku.Deferred gross profit 1/1/2017 ( 2016 contract)?kv.Deferred gross profit 12/31/2017 (2016 contract)1,200,000kw.Deferred gross profit 12/31/2017 (2017 contract)3,200,000kx.ky.The following additional data are provided for year 2017:-on March 1 ,2017, a 2016 installment receivable in written off and bad debt expense of P 1,400,000 is recognized-on October 1, 2017, the company repossessed inventory from 2017 installment contract. The fair value of the repossessed inventory is P 1,000,000 while the loss on repossession recognized in P 200,000-on December 1, 2017, the repossessed inventory on October 1, 2017 was resold at a selling price of P 1,500,000 after being recondition at a cost of P 200,000.-for 2016 contracts the total collection made during 2017 amounted to P 1,000,000 while for 2017 contracts the total collection made during the 2017 is P 3,000,000.P
kz.What is the total realized gross profit to be recognized in the income statement for the year ended December 31, 2017?la.a. P 1,500,000c. P 1,600,000lb.b. P 2,320,000d. P 1,800,000lc.ld.le.lf.lg.lh.li.lj.lk.ll.lm.ln.lo.lp.lq.lr.ls.lt.lu.lv.lw.lx.