NORTHERN CPA REVIEW

PRACTICAL ACCOUNTING PROBLEMS 1

SECOND PREBOARD EXAMINATIONS Z.B.MILLAN

1. After posting the adjustments, the ledger of Ernie Ball Co. have the following balances on December
31, 200A: Cash, P480,000; Accounts receivable, P550,000; Notes receivable, P580,000; Land
P560,000; Building, P2,500,000; Bonds payable (due 200F), P1,000,000; Bank overdraft, P50,000,
Allowance for doubtful accounts, P70,000; Dividends, P350,000; Accrued interest expense,
P250,000; Accumulated depreciation, P1,800,000, Accounts payable, P580,000; Unearned Rent
Revenue, P280,000; Accrued interest income, P180,000; Notes payable, P360,000; Interest expense,
P170,000; Advertising expense, P260,000; Service fees, P2,050,000; Rent revenue, P250,000;
Repairs and maintenance, P460,000; Interest revenue, P250,000; Ordinary shares, P1,000,000;
Share premium, P750,000; Retained earnings, January 1, 200A, P360,000; Salaries expense,
P950,000; Treasury shares, P480,000; Utilities expense, P580,000; Property tax expense, P460,000;
and Insurance expense P250,000. How much is the total liabilities?
a. 2,522,000 b. 2,280,000 c. 2,270,000 d. 2,450,000

2. The total credits in the balance sheet columns of the worksheet amounted P700,600 while the total
debits in the income statement columns is P137,500. If the total debits in the adjusted trial balance is
P862,400, what is the net income/(loss)?
a. (20,800) b. 24,300 c. 161,800 d. (299,300)

3. What is the net effect of the under mentioned errors on the trial balance of a firm?
I. Total of sales was taken as P58,726 instead of P58,762.
II. A discount of P52 allowed to Mr. X was not posted in the discount account.
III. Sale of old furniture of P130 was credited to Machinery account.
IV. A credit sale of P250 to Mr. Y was posted twice in his account.
a. Credit total of trial balance will be more than that of debit total by P234
b. Debit total of trial balance will be more than that of credit total by P234
c. Credit total of trial balance will be more than that of debit total by P104
d. Debit total of trial balance will be more than that of credit total by P264
e. Debit total of trial balance will be more than that of credit total by P286

4. In preparing the unadjusted trial balance of Crystal Planet Co. you determined that the total debits
does not equal total credits. Further investigation revealed the following information:
The debit posting for a cash sale was omitted. P 2,000
The balance of Inventory was listed as a credit 12,000
The balance of Insurance expense was listed as Rent expense 3,000
The balance of Unearned interest income was listed as a debit 5,000
Annual depreciation was not yet recorded 15,000
The total debits and total credits of the unadjusted trial balance would differ by
a. 16,000 b. 34,000 c. 21,000 d. 18,000

5. The credit total of a trial balance exceeds the debit total by P350. In investigating the cause of the
difference, the following errors were determined: a credit to accounts receivable of P550 was not
posted; a P5,000 debit to be made to the Purchases account was debited to Accounts payable
instead; a P3,000 credit to be made to the Sales account was credited to the Accounts receivable
account instead; the Interest payable account balance of P4,500 was included in the trial balance as
P5,400. The correct balance of the trial balance is
a. 7,540 b. 8,550 c. 9,250 d. 7,450

6. Presented below are changes in the accounts of Java Company for 2009.
Increase (Decrease)
Cash P 1,500,000
Accounts receivable - net 3,500,000
Inventory 3,900,000
Investments (1,000,000)
Equipment 3,000,000
Accounts payable (800,000)
Bonds payable 2,000,000

During 2009, Java sold 100,000 shares of its P20 par stock for P30 per share and received cash in full.
Dividend of P4,500,000 was paid in cash during the year. Java borrowed P4,000,000 from the bank and
made interest payment of P600,000. Java had no other loan payable. Interest of P400,000 was payable
at December 31, 2009. Interest payable at December 31, 2008 was P100,000. Equipment of P2,000,000
was donated by a stockholder during the year. What was the net income for the year 2009?
a. 9,200,000 b. 4,800,000 c. 4,900,000 d. 4,300,000

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7. The comparative Balance Sheets of Sheehan Co. for the years ended March 31, 2006 and 2007
show the following:
Assets Liabilities
March 31, 2006 P360,000 P 80,000
March 31, 2007 P350,000 P120,000

o On January 1, 2007, Sheehan Co. declared 5,000 stock dividends out of its 31,250 outstanding
Ordinary shares with par value of P5 per share. The shares were quoted at P7.5 per share at the
time of declaration. Sheehan Co. also declared P2.5 per share cash dividends at year-end which
is to be paid on June 30, 2007.
o Total Subscriptions received on December 1, 2006 amounted to P364,000 for 5,000 unissued
shares. Sixty percent of the subscriptions were collected before year-end.
o Treasury shares recorded at cost increased by P30,000.
o The Assets sections in the 2006 and 2007 Balance Sheets include Avail. For Sale Securities
valued at FMVs of P45,000 and P50,000 with costs of P40,000 and P40,000 respectively.

What is the net loss for the period ended March 31, 2007?
a. 323,375 b. 243,400 c. 177,775 d. 152,775

8. On July 1, 2008, the Quezon City government issued reality tax assessment for its fiscal year ended
June 30, 2009. On September 1, 2008, Zuma Company purchased a land in Quezon City. The
purchase price was reduced by a credit for accrued reality taxes. Zuma does not record the entire
year's real estate tax obligation but instead records tax expenses at the end of each month by
adjusting prepaid real estate taxes or real estate taxes payable as appropriate. On November 1, 2008
Zuma paid the first of two equal installments of P600,000 for realty taxes. What amount of this
payment should Zuma record as a debit to real estate taxes payable?
a. 200,000
b. 400,000
c. 500,000
d. 600,000

9. Organ Company requires refundable advance payments with special orders for machinery
constructed to customer’s specifications. Information for 2008 is as follows:

Customers advances - balance, December 31, 2007 P 885,000

Advances received with orders in 2008 1,380,000
Advances applied to orders shipped in 2008 1,230,000
Advances applicable to orders cancelled in 2008 375,000

What amount should Organ Company report as current liability for customer’s deposits in the December
31, 2008 balance sheet?
a. 0
b. 660,000
c. 1,035,000
d. 1,110,000

10. Globe Company is required to contribute to an employee stock ownership plan (ESOP) 10% of its
income after deduction of this contribution but before income tax. The income before charges for the
contribution and income tax is P8,800,000. The income tax rate is 32%. What amount should be
accrued as a contribution to ESOP?
a. 800,000
b. 880,000
c. 792,000
d. 594,400

Use the following information for the next two questions:

Damage, Inc. has a bonus plan covering all employees. The total bonus is equal to 10% of Damage’s
preliminary (prebonus, pretax) income reduced by the income tax (computed on the preliminary income
less the bonus itself). Damage’s preliminary income for 2008 is P1,000,000 and the income tax rate is
35%.

11. How much is the bonus for 2008?

a. 61,726
b. 67,358
c. 61,033
d. 100,000

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12. What amount should George Company recognize as a distribution of profit related to their bonus plan
in 2008?
a. 0
b. 68,000
c. 70,248
d. 100,000

13. During 2008, Smith Company filed suit against West Company seeking damages for patent
infringement. At December 31, 2008, Smith's legal counsel believed that it was probable that Smith
would be successful against West for an estimated amount of P1,500,000. In March 2009, Smith was
awarded P1,000,000 and received full payment thereof. In Smith's 2008 financial statements issued
February 2009, how should this award be reported?
a. As a receivable and revenue of P1,000,000.
b. As a receivable and deferred revenue of P1,000,000.
c. As a disclosure of a contingent asset of P1,000,000.
d. As a disclosure of a contingent asset of P1,500,000.

14. During 2006, Royal Corporation issued at 95, one thousand of its 8%, P5,000 bonds due in ten years.
One detachable stock purchase warrants entitling the holder to buy 20 shares of Royal’s ordinary
shares was attached to each bond. Shortly after issuance, the bonds are selling at 10% ex-warrant,
and each warrant was quoted at P60.

What amount, if any, of the proceeds, from the bond issuance should be recorded as part of Royal’s
shareholders’ equity?
a. 0
b. 225,000
c. 250,000
d. 364,457

Use the following information for the next two questions:

On January 1, 2006, Tudor Company issued its 10%, 5-year convertible debt instrument with a face
amount of P10,000,000 for P10,000,000. Interest is payable every December 31 of each year. The debt
instrument is convertible into 90,000 ordinary shares with a par value of P100. When the debt instruments
were issued, they were selling at 97 without conversion option. Tudor Company incurred P80,000
transaction costs on the issue of the debt instruments.

15. How much of the net proceeds represent the equity component?
a. 297,600
b. 9,622,400
c. 9,920,000
d. 10,000,000

16. How much of the net proceeds represent the debt component?
a. 297,600
b. 9,622,400
c. 9,920,000
d. 10,000,000

17. On January 1, 2006, Alison Company issued its 10%, 5-year convertible debt instrument with a face
amount of P5,000,000 for P5,100,000. Interest is payable every December 31 of each year. The debt
instrument is convertible into 50,000 ordinary shares with a par value of P100. When the debt
instruments were issued, the prevailing market rate of interest for similar debt without conversion
option is 11%. The Company incurred transaction cost of P70,000 related to the issue of the
compound instrument. (Carry PV factors up to 3 decimal places)

How much of the total proceeds represent the equity component?

a. 100,000
b. 225,500
c. 283,059
d. 285,050

18. On January 1, 2006, Emilia Corporation issued its 5-year, 12% P5,000,000 face value convertible
debt instrument for P4,800,000. The debt instrument is convertible into 80,000 ordinary shares with a
par value of P50 per share and can be converted anytime from January 2007 to maturity. At the time
of issue, the market rate of interest for a similar instrument is 14%. Interest is payable every six
months on January 1 and July 1.

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On July 1, 2007, the entire debt instrument was converted into equity instrument by the issuance of
80,000 ordinary shares of the enterprise. Transaction costs of P50,000 were incurred in relation to the
issue of new shares.

What amount should be credited to the share premium account as a result of the conversion? (Round off
present value to three decimal places)
a. None
b. 152,800
c. 831,349
d. 881,549

19. On January 1, 2006, Wisdom Company issued its 10%, 6-year convertible debt instrument with a face
amount of P3,000,000 for P3,500,000. Interest is payable every December 31 of each year. The debt
instrument is convertible into 30,000 ordinary shares with a par value of P100. The debt instrument is
convertible into equity from the time of issue until maturity. Without the conversion feature, the debt
instrument would have sold at 106.

On December 31, 2007, Wisdom Company converted 1,000,000 debt instruments by issuing 10,000
ordinary shares. As of December 31, 2007, the unamortized premium on the debt instrument is P135,000.

What amount should be credited to the share premium account as a result of the conversion?
a. None
b. 135,000
c. 151,667
d. 180,000

Use the following information for the next five questions:

On January 1, 2006, Faith Company issued its 8%, 5-year convertible debt instrument with a face amount
of P8,000,000 for P7,700,000. Interest is payable every December 31 of each year. The debt instrument
is convertible into 50,000 ordinary shares with a par value of P100. When the debt instruments were
issued, the prevailing market rate of interest for similar debt without conversion option is 10%.

On December 31, 2008, all the convertible debt instruments were retired for P8,000,000. The prevailing
rate of interest on a similar debt instrument as of December 31, 2008 is 9% without the conversion option.

20. On the date of issue, what amount of the proceeds represents the equity component?
a. None
b. 100,000
c. 306,400
d. 454,800

21. What is the carrying value of the debt instruments as of December 31, 2008?
a. 7,393,600
b. 7,492,960
c. 7,602,256
d. 7,722,482

22. On the date of retirement, what amount of the proceeds represents the equity component?
a. 136,878
b. 140,729
c. 165,760
d. 306,400

23. How much is the gain or loss that should be reported in the profit or loss on the retirement of the
convertible debt instruments?
a. 136,878
b. 140,640
c. 165,760
d. 306,400

24. How much is the gain on cancellation of the equity component to be reported in the shareholders’
equity?
a. 136,878
b. 140,640
c. 165,670
d. 306,400

Use the following information for the next four questions:

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On January 1, 2006, Belief Company issued its 9%, 4-year convertible debt instrument with a face
amount of P4,000,000 for P4,100,000. Interest is payable every December 31 of each year. The debt
instrument is convertible into 80,000 ordinary shares with a par value of P50. When the debt instruments
were issued, the prevailing market rate of interest for similar debt without conversion option is 10%.

On December 31, 2007, ¼ of the convertible debt instruments were retired for P1,000,000. Without the
conversion option, the debt instrument can be retired at 97%.

25. On the date of issue, what amount of the proceeds represents the equity component?
a. None
b. 226,800
c. 3,873,200
d. 4,100,000

26. What is the carrying value of the debt instruments as of December 31, 2007?
a. 3,873,200
b. 3,900,520
c. 3,930,572
d. 3,963,629

27. On the date of retirement, what amount of the proceeds represents the equity component?
a. 12,643
b. 26,700
c. 30,000
d. 56,700

28. What amount of gain or loss should be reported in the profit or loss on the retirement of the
convertible debt instruments?
a. 12,643
b. 26,700
c. 30,000
d. 56,700

Use the following information for the next two questions:

On January 2, 2006, Denver Company issued 80,000 redeemable 6% preference shares with a par value
of P100. These shares were issued at a premium of P50 per share. Denver Company paid a total amount
of P150,000 transaction costs. The dividend is paid annually every December 31 of each year from year
2006 to 2010. These shares will be redeemed on January 2, 2011 at a premium of P7,360,000. The
effective rate of interest on these shares is 9%.

29. What is the total amount of finance charge Denver Company should recognize as an expense during
the time the preference shares are outstanding?
a. 480,000
b. 720,000
c. 2,400,000
d. 5,910,000

30. What is the amount of finance charge that should be shown in the income statement for the year
ended December 31, 2006?
a. 480,000
b. 586,500
c. 1,066,500
d. 2,400,000

31. Pine Corp.'s books showed pretax income of P800,000 for the year ended December
31, 2008. In the computation of federal income taxes, the following data were considered:

Gain on an involuntary conversion P350,000

(Pine has elected to replace the property
within the statutory period using total proceeds)
Depreciation deducted for the tax purposes in excess
of depreciation deducted for book purposes 50,000
Federal estimated tax payments, 2008 70,000
Enacted federal tax rates, 2008 30%

What amount should Pine report as its current federal income tax liability on its December 31, 2008
balance sheet?
a. 50,000

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 b. 65,000
c. 120,000
d. 135,000

Use the following information for the next two questions:

Zeff Co. prepared the following reconciliation of its pretax financial statement income to
taxable income for the year ended December 31, 2008, its first year of operations:

Pretax financial income P 160,000

Nontaxable interest received on municipal securities (5,000)
Long-term loss accrual in excess of deductible amount 10,000
Depreciation in excess of financial statement amount (25,000)

Zeff's tax rate for 2008 is 40%

32. In its 2008 income statement, what amount should Zeff report as income tax expense – current
portion?
a. 52,000
b. 56,000
c. 62,000
d. 64,000

33. In its December 31, 2008 balance sheet, what should Zeff report as deferred income tax liability?
a. 2,000
b. 4,000
c. 6,000
d. 10,000

34. Cascade Range Company is determining the amount of its pretax accounting income for 2008 by
making adjustment to taxable income from the company's 2008 income tax return. The tax return
indicates taxable income of P380,000, on which a tax liability of P133,000 has been recognized
(P380,000 x 35% = P133,000). Following is the list of items that may be required to determine pretax
accounting income from the amount of taxable income:

● Accelerated depreciation for income tax purposes was P134,000; straight-line depreciation on these
assets is P80,000.
● Goodwill impairment loss of P45,000 was not included as a deduction in the tax return but
may be deducted in the income statement.
● Several expenses were included in the income tax return on an estimated basis. These items will be in
the income statement at the same amount but are subject to change if new information in the future
indicates that the original estimates were inaccurate.
● Interest in treasury bills was not included in the tax return. During the year, P24,700 was received on
these investments.

Cascade Range's pretax accounting income amounts to

a. 458,700
b. 389,000
c. 359,700
d. 413,700

35. Caracas Corporation began 2005 with a P144,000 balance in the deferred tax liability
account. At the end of 2005, the related cumulative temporary difference amounts to
P700,000, and it will reverse evenly over the next two years. Pretax accounting income for 2005
is P1,050,000. The tax rate is 32% and the taxable income for 2005 is P800,000. The income tax
expense for 2005 amounts to
a. 224,000
b. 336,000
c. 256,000
d. 245,000

36. On its December 31, 2008 balance sheet, Shin Company had income tax payable of
P130,000 and a deferred tax asset of P200,000. Shin had reported a deferred tax asset of P150,000
at December 31, 2007. No estimated tax payments were made during 2005. In its 2008 income
statement, what amount should Shin report as total income tax expense?
a. 80,000
b. 180,000
c. 100,000
d. 130,000

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37. Donna Co. implemented a defined benefit pension plan for its employees on January 1, 2009. During
2009 and 2010, Donna’s contributions fully funded the plan. The following data are provided for
2012 and 2011:
2012 2011
Estimated Actual
Projected benefit obligation, Dec. 31 P 750,000 P 700,000
Accumulated benefit obligation, Dec. 31 520,000 500,000
Plan assets at fair value, Dec. 31 675,000 600,000
Projected benefit obligation in excess of
plan assets 75,000 100,000
Pension expense 90,000 75,000
Employer’s contribution ? 50,000

What amount should Donna contribute in order to report a projected pension liability of P15,000 in its
December 31, 2012 balance sheet?
a. 50,000
b. 60,000
c. 75,000
d. 100,000

38. Mark purchased an equipment on January 1, 2008 for P1,000,000 and immediately leased it to
Shienna under a lease that does not transfer substantially all the risks and rewards incident to
ownership of such asset. The equipment has an estimated useful life of 5 years and a residual value
of P50,000. In addition, Mark incurred initial direct cost of P80,000 and indirect costs of P10,000.
Mark also received lease bonus of P75,000. How much is the carrying amount of the asset at
December 31, 2008?
a. 824,000
b. 874,000
c. 809,000
d. 766,400

39. On July 1, 2008, South Co. entered into a ten year operating lease for a warehouse facility. The
annual minimum lease payments are P100,000. In addition to the base rent, South pays a monthly
allocation of the building's operating expenses, which is amounted to P20,000 for the year ended
June 30, 2009. In the notes to South's June 30, 2009 financial statements, what amounts of
subsequent years lease payments should be disclosed?

a. P100,000 per annum for each of the next five years and P500,000 in the aggregate.
b. P120,000 per annum for each of the next five years and P600,000 in the aggregate.
c. P100,000 per annum for each of the next five years and P900,000 in the aggregate.
d. P120,000 per annum for each of the next five years and P1,080,000 in the aggregate.
e. P100,000 for the fiscal year ending 2010, P400,000 total future minimum lease payments for
fiscal years ending June 30, 2011 to 2014, and P400,000 total future minimum lease
payments for fiscal years ending June 30, 2015 to 2018.

40. On January 1, 2008, Tax Boy leased a machinery to Tax Girl with the following details:
Cost of asset leased P 3,169,865
Lease term 4 years
Useful life of asset leased 5 years
Implicit rate 10%
Annual rent is payable at the end of each year.

How much would be the annual lease payments which will give Tax Boy a fair rate of return on the
net investment in the lease?
a. 1,000,000
b. 792,466
c. 836,202
d. 600,814

41. Peg Co. leased equipment from Howe Corp. on July 1, 2008 for an eight-year period expiring June
30, 201Equal payments under the lease are P600,000 and are due on July 1 of each year. The first
payment was made on July 1, 2008. The rate of interest contemplated by Peg and Howe is 10%. The
cash selling price of the equipment is P3,520,000, and the cost of the equipment on Howe's
accounting records is P2,800,000. The lease is appropriately recorded as a sales-type lease. What is
the amount of profit on the sale and interest revenue that Howe should record for the year ended
December 31, 2008?
Profit on sale Interest revenue

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 a. P720,000 P176,000
b. P720,000 P146,000
c. P 45,000 P176,000
d. P 45,000 P146,000

42. Howe Co. leased equipment to Kew Corp. on January 2, 2008, for an eight-year period expiring
December 31, 2015. Equal payments under the lease are P600,000 and are due on January 2 of
each year. The first payment was made on January 2, 2008. The list selling price of the equipment
isP3,520,000 and its carrying cost on Howe's books is P2,800,000. The lease is appropriately
accounted for as a sales-type lease. The present value of the lease payments is P3,300,000. What
amount of profit on the sale should Howe report for the year ended December 31, 2008?
a. P720,000
b. P500,000
c. P 90,000
d. P 0

43. On January 1, 2008, Day Corp. entered into a ten-year lease agreement with Ward,Inc. for industrial
equipment. Annual lease payments of P10,000 are payable at the end of each year. Day knows that
the lessor expects a 10% return on the lease. Day has a 12% incremental borrowing rate. The
equipment is expected to have an estimated useful life of ten years. In addition, a third party
unrelated to the lessee has guaranteed to pay Ward a residual value of P5,000 at the end of the
lease.

In Day's January 1, 2008 balance sheet, the principal amount of the lease obligation was
a. P63,374
b. P61,446
c. P58,112
d. P56,512

44. In the long-term liabilities section of its balance sheet at December 31, 2008, Mene Co. reported a
capital lease obligation of P75,000, net or current portion of P1,364. Payments of P9,000 were made
on January 2, 2009 and 2010. Mene's incremental borrowing rate on the date of the lease was P11%
and the lessor's implicit rate, which was known to Mene, was 10%. In its December 31, 2009 balance
sheet, what amount should Mene report as capital lease obligation, net of current portion?
a. P66,000
b. P73,500
c. P73,636
d. P74,250

45. On January 2, 2004, Cole Co. signed an eight-year non-cancelable lease for a new machine,
requiring P15,000 annual payments at the beginning of each year. The machine has a useful life of
twelve years, with no salvage value. Title passes to Cole at the lease expiration date. Cole uses
straight-line depreciation for all of its plant assets. Aggregate lease payments have a present value
on January 2, 2004; of P108,000 based on an appropriate rate of interest. For 2004, Cole should
record depreciation (amortization) expense for the leased machine at
a. P 0
b. P 9,000
c. P 13,500
d. P 15,000

Use the following information for the next two questions:

Marianas Company adopted the policy of leasing as the primary method of selling its products. The
company's main product is a small helicopter that is very popular among politicians and company
managers. Marianas Company constructed such a helicopter for Jade Enterprises at a cost of
P8,500,000. Financing the construction was at a 14% rate. The terms of the lease provided for annual
advance payments of P2,500,000 to be paid over 10 years with the ownership transferring to Jade t the
end of the lease period. It is estimated that the helicopter will have a residual value of P1,600,000 at that
date. The lease payments began December 31, 2008. Marianas Company incurred initial direct costs of
P500,000 in financing the lease agreement with Jade. The sales price of the helicopter is P14,875,000.

46. The profit on the sale to be recognized by Marianas Company should be

a. 5,875,000
b. 6,375,000
c. 4,275,000
d. 4,775,000

47. What is the total financial revenue?

a. 10,125,000
b. 11,725,000

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 c. 9,625,000
d. 8,525,000

Use the following information for the next two questions:

Vanderbilt Company is a dealer in machinery. On July 1, 2008, a machinery was leased to another
enterprise with the following provisions:

Annual rental payable at the end of each year 3,000,000

Lease term and useful life of machinery 5 years
Cost of machinery 8,000,000
Residual value - unguaranteed 1,000,000
Implicit interest rate 12%
PV of an ordinary annuity of 1 for 5 periods at 12% 3.60
PV of 1 for 5 periods at 12% 0.57

At the end of the lease term on December 31, 2012 the machinery will revert to
Vanderbilt. The perpetual inventory system is used. Vanderbilt incurred initial direct costs of
P300,000 in finalizing the lease agreement.

48. What is the total financial revenue from the lease that will be reported by Vanderbilt?
a. 4,630,000
b. 4,200,000
c. 5,200,000
d. 3,630,000

49. Vanderbilt Company should report profit on the sale at

a. 7,700,000
b. 3,070,000
c. 2,500,000
d. 3,370,000

50. The following information relates to a defined benefit pension plan of the Ferdie Company for the year
ending December 31, 2008:

Projected benefit obligation, January 1 P 4,600,000

Projected benefit obligation, December 31 4,729,000
Fair value of plan assets, January 1 5,035,000
Expected return on plan assets 450,000
Actual return on plan assets 495,000
Amortization of deferred gain
(based on the remaining service life of 10 years) 32,500
Employer contributions 425,000
Benefits paid to retirees 390,000
Settlement rate 10%

The prepaid/accrued benefit cost on January 1, 2008 and December 31, 2008, respectively are
Jan.1, 2008 Dec.31, 2008
a. P110,000 P498,500
b. P393,500 P 37,500
c. P350,000 P 38,500
d. P393,500 P 5,000

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