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Tuesday, November 16, 2010

Valix Finacc vol 2 Problem 1-40 to 45

Financial Accounting Volume 2 2008 Valix-Peralta
Chapter 1 Problem 1-40 to 45


Problem 1-40  Answer  B

Outstanding contracts on December 31, 2008 that will expire during

            2009                                                                                                                   150,000
            2010                                                                                                                   225,000
            2011                                                                                                                   100,000
Unearned service contract revenue                                                                    475,000

Problem 1-41  Answer  A

The entire amount of P720,000 will be considered deferred revenue on December 31, 2008 because the subscriptions start with the January 2009 issue.

Problem 1-42  Answer  A

Monthly subscriptions (7,200,000 / 12)                                                                     600,000

The subscriptions after the September 30 cut-off are:
            October                                                                                                           600,000
            November                                                                                                       600,000
            December                                                                                                       600,000
            Total unearned subscription revenue – December 31, 2008               1,800,000

The above subscriptions will be served in the next publication in 2009.
                                                                                                                                   
Problem 1-43  Answer  C

Subscriptions received in 2008 that will expire in 2010                                         125,000
Subscriptions received in 2009 that will expire in 2010                                         200,000
Subscriptions received in 2009 that will expire in 2011                                         140,000
Unearned subscription revenue – December 31, 2009                                                   465,000
                                                                                                                                                 
Problem 1-44  Answer  B

Liability for refundable deposit – January 1                                                           150,000
Deposits made in 2008 (100,000 x 5)                                                                         500,000
Total                                                                                                                               650,000
Less: Deposits refunded in 2008 (110,000 x 5)                                                        550,000
Balance – December 31(current liability)                                                                          100,000

The lease deposit is a noncurrent liability.
                                                                                              

Problem 1-45  Answer  C


Advances – January 1                                                                                            1,180,000
Advances received                                                                                               1,840,000
Total                                                                                                                            3,020,000
Advances applied                                                                                                (1,640,000)
Advances canceled                                                                                            (   500,000)
Advances – December 31                                                                                       880,000

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