Chapter 1 Instments- Additional Concepts 682 683 Disclosure of risks 12. Which of the following types of information does PFRS 7 not 9. ABC Co acquires bonds with face amount of Pl00,000 at tair value of PIO0,000. The effective interest rate is 10%, equal to the nominal interest rate. ABC Co. classifies the bonds as Impairment require to be disclosed about exposure to risks arising from financial instruments? Qualitative and quantitative information about market risk. b. Qualitative and quantitative information about credit risk. Qualitative and operational risk. d. Qualitative and quantitative information about liquidity a. subsequently measured at FVOCI. At the reporting date, the fair value of the bonds decreases to PL000. ABC Co. estimates 12-month expected credit losses of C. quantitative information about P3,000. Requirements: Prepare the year-end jourmal entries to recognize the impairment loss and to accrue the interest income for the year risk. (Adapted) a In accordance with PFRS 7 Financia! Instruments: Disclosures, which of the following best describes credit risk? The risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge obligation b. The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities c. The risk that the fair value associated with an instrument (assume 1-year interest). Dividends a. 10. Karter Company purchased 200 out of the 1,000 outstanding shares of Flynn Company's common stock (ordinary shares) for P180,000 on January 2, 2004. During 2004, Flynn Company declared dividends of P30,000 and reported earnings for the an year of P120,000. will vary due to changes in the counterparty's credit rating d. The risk that an entity's credit facilities will be withdrawn If Karter Company used the fair value method of accountine for its investment in Flynn Company, how much dividend income is recognized by Karter in 2004? (Adapted) due to cash flow sensitivities (ACCA) Stock rights 11. Karter Company holds 200 shares of Flynn Company's common stock. On September 30, 2004, Flynn Company issued stock rights on a "1-for-1" basis. The stock rights are exercisable until June 30, 2005. The stock rights have fair values per right of P5.00 and P5.50 on September 30, 2004 and December 31, 2004, respectively. How much is the carrying amount of the stock rights 'in Karter's December 31, 2004 statement of financial position? (Adapted) 10%, aripal on iber nuary 1, auA 20x1. The yie d ere its September 1, 20x2, Michael Hedoe uld ices be re

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Chapter1: Financial Statements And Business Decisions
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require to be disclosed about exposure to risks arising from
At the reporting date, the fair value of the bonds decreases to
9. ABC Co. acquires bonds with face amount of P100,000 at tair
P90,000. ABC Co. estimates 12-month expected credit losses of
Requirements: Prepare the year-end journal entries to recognize the
impairment loss and to accrue the interest income for the year
the nominal interest rate. ABC Co. classifies the bonds as
10. Karter Company purchased 200 out of the 1,000 outstanding
for P180,000 on January 2, 2004. During 2004, Flynn Company
value of PI00,000. The effective interest rate is 10%, equal to
shares of Flynn Company's common stock (ordinary shares)
Instments-Additional Concepts
Chapter 11
682
683
Disclosure of risks
12.
Which of the following types of Information does PFRS 7 not
Impairment
financial instruments?
Qualitative and quantitative information about market
a.
subsequently measured at FVOCI.
risk.
h. Qualitative and quantitative information about credit risk.
C. Qualitative and
operational risk,
d. Qualitative and quantitative information about liquidity
quantitative information
about
P3,000.
risk.
(Adapted)
a In accordance with PFRS7 Financial Instruments: Disclosures,
which of the following best describes credit risk?
The risk that one party to a financial instrument willcause
a financial loss for the other party by failing to discharge
obligation
b. The risk that an entity will encounter difficulty in meeting
obligations associated with financial liabilities
s The risk that the fair value associated with an instrument
(assume l-year interest).
Dividends
a.
an
declared dividends of P30,000 and reported earnings for t
year of P120,000.
If Karter Company used the fair value method of accountine
for its investment in Flynn Company, how much dividend
income is recognized by Karter in 2004?
(Adapted)
will vary due to changes in the counterparty's credit rating
d. The risk that an entity's credit facilities will be withdrawn
due to cash flow sensitivities
(ACCA)
Stock rights
11. Karter Company holds 200 shares of Flynn Company's
common stock. On September 30, 2004, Flynn Company
issued stock rights on a "1-for-1" basis. The stock rights are
exercisable until June 30, 2005. The stock rights have fair
values per right of P5.00 and P5.50 on September 30, 2004 and
December 31, 2004, respectively. How much is the carrying
amount of the stock rights 'in Karter's December 31, 2004
statement of financial position?
(Adapted)
10%,
ripal i
on
iber
nuary 1, suA
20x1. The yie
ad ?
ere
its
September 1, 20x2, Michael Hedee
nuld
ices
be re
Transcribed Image Text:CORE require to be disclosed about exposure to risks arising from At the reporting date, the fair value of the bonds decreases to 9. ABC Co. acquires bonds with face amount of P100,000 at tair P90,000. ABC Co. estimates 12-month expected credit losses of Requirements: Prepare the year-end journal entries to recognize the impairment loss and to accrue the interest income for the year the nominal interest rate. ABC Co. classifies the bonds as 10. Karter Company purchased 200 out of the 1,000 outstanding for P180,000 on January 2, 2004. During 2004, Flynn Company value of PI00,000. The effective interest rate is 10%, equal to shares of Flynn Company's common stock (ordinary shares) Instments-Additional Concepts Chapter 11 682 683 Disclosure of risks 12. Which of the following types of Information does PFRS 7 not Impairment financial instruments? Qualitative and quantitative information about market a. subsequently measured at FVOCI. risk. h. Qualitative and quantitative information about credit risk. C. Qualitative and operational risk, d. Qualitative and quantitative information about liquidity quantitative information about P3,000. risk. (Adapted) a In accordance with PFRS7 Financial Instruments: Disclosures, which of the following best describes credit risk? The risk that one party to a financial instrument willcause a financial loss for the other party by failing to discharge obligation b. The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities s The risk that the fair value associated with an instrument (assume l-year interest). Dividends a. an declared dividends of P30,000 and reported earnings for t year of P120,000. If Karter Company used the fair value method of accountine for its investment in Flynn Company, how much dividend income is recognized by Karter in 2004? (Adapted) will vary due to changes in the counterparty's credit rating d. The risk that an entity's credit facilities will be withdrawn due to cash flow sensitivities (ACCA) Stock rights 11. Karter Company holds 200 shares of Flynn Company's common stock. On September 30, 2004, Flynn Company issued stock rights on a "1-for-1" basis. The stock rights are exercisable until June 30, 2005. The stock rights have fair values per right of P5.00 and P5.50 on September 30, 2004 and December 31, 2004, respectively. How much is the carrying amount of the stock rights 'in Karter's December 31, 2004 statement of financial position? (Adapted) 10%, ripal i on iber nuary 1, suA 20x1. The yie ad ? ere its September 1, 20x2, Michael Hedee nuld ices be re
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