Reference no: EM132933513

Questions -

Q1) ATK Company had the following classes of shares outstanding as of December 31, 2020: Ordinary shares, P20 par value, 20,000 outstanding; Preference shares, 6%, P100 par value, cumulative and fully participating, 1,000 shares were outstanding. The last payment of preference dividend was on December 31, 2017. On December 31, a total of cash dividend of P90,000 was declared. What are the amounts of dividend payable on both the ordinary and preference shares respectively?

A. P67,200 and P22,000

B. P57,600 and P32,400

C. P72,000 and P18,000

D. P62,400 and P27,600

Q2) On January 1, 2021, ETC Company sold machinery with a carrying amount of P500,000 for P700,000. The fair value of the asset on this date has been determined to be P650,000. ETC immediately leased the machine back for P150,000 annually, payable in advance for 5 years. The implicit rate is 12%. If the transfer does not meet the requirements in IFRS 15 to become a sale, how much is the gain on sale-leaseback that ETC needs to recognize?

A. P0

B. P21,786

C. P150,000 P50,000

D. P200,000