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First Pboard - PRAC 1, TIP, Dec. 12,2012.doc

First Pboard - PRAC 1, TIP, Dec. 12,2012.doc

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Published by Doris Moriel Tampis
accounting exam
accounting exam

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TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES
938 Aurora Boulevard, Cubao, Quezon City
ACCOUNTANCY INTEGRATED REVIEW
PRACTICAL ACCOUNTING 1 Dec. 12, 2012FIRST PREBOARD EXAMINATION 3:00-5:00PM
INSTRUCTIONS
: Mark with Pencil No. 2 the letter of your choice on the answer sheet provided. Erasures are strictly not allowed.1. On December 31, 2011, CINDY COMPANY’s “ cash “ account balance per  books of P3,600,000 includes the following:Demand depositP1,540,000Time deposit, 30 days 500,000NSF check from customer 20,000Trading securities ( due June 30, 2012 ) 1,000,000Savings deposit ( in a closed bank ) 50,000IOU from employee 30,000Pension fund 360,000Petty cash fund 10,000Customer check dated January 31, 2012 60,000Customer check outstanding for 18 months 30,000P3,600,000Additional information:
Check of P100,000 in payment of accounts payable was dated and recorded onDecember 31, 2011, but mailed to creditors on January 15, 2012.
Check of P50,000 dated January 31, 2012 in payments of accounts payable wasrecorded and mailed on December 31, 2011.
The company uses the calendar year. The cash receipts journal was held open untilJanuary 15, 2012, during which time P200,000 was collected and recorded onDecember 31, 2011.How much is the correct “cash & cash equivalents” as of December 31, 2011?A.2,000,000B. 2,050,000C. 2,090,000D. 4,000,0002. STELLA COMPANY’s bank statement for the month of December, 2011 includedthe following information:December 31, 2011 balanceP5,600,000Bank service charge for December 24,000Interest credited to the account of Stella by the bank for December 20,000In comparing the bank statement to its own records, Stella found the following:Deposits made but not yet recorded by the bank 700,000Checks written and mailed to payees but not yet recorded by the bank 1,300,000
 
In addition, Stella Company discovered that it had drawn and erroneouslyrecorded a check for P92,000 that should have been recorded at its correct amount of P128,000. The cash balance per ledger isA.5,000,000B. 5,040,000C. 5,080,000D. 5,600,0003. The following information was included in the bank reconciliation for FRIDACOMPANY:Checks and charges returned by bank in June, including aP100,000 service charge for June, 2011P16,000,000Service charge made by the bank in May, 2011 and recorded byFrida in June 200,000Total credits to cash in all journals of Frida during June 18,000,000Customer’s NSF check returned as a bank charge in June( no entry in Fridas books ) 2,000,000Customer’s NSF check returned in May and re-deposited in June( no entry made in the books in either May or June ) 1,000,000Outstanding checks, May 31 6,000,000The amount of outstanding checks on June 30, 2011 isA.7,900,000B. 8,000,000C. 9,900,000D. 10,900,0004. ROSENDA COMPANY had the following information for 2011 relating to itsaccounts receivable:Accounts receivable, January 1P 2,600,000Credit sales 10,800,000Collections from customers, excluding recoveries 9,500,000Accounts written off 250,000Collection of accounts written off in prior years( customer credit was not re-established ) 50,000Estimated uncollectible receivables per aging at December 31 330,000The balance of accounts receivable, before allowance for doubtful accounts, onDecember 31, 2011 isA.3,650,000B. 3,700,000C. 3,900,000D. 3,980,000
For questions 5 to 6
JANE BANK loaned P18,000,000 to a borrower on January 1, 2009. The terms of theloan were payment in full on January 1, 2014, plus annual interest payment at 12%.The interest payment was made as scheduled on January 1, 2010. However, due tofinancial setbacks, the borrower was unable to make its 2011 interest payment.Jane considered the loan impaired and projected the cash flows from the loan onDecember 31, 2011. The bank has accrued the interest on December 31, 2010, but did notcontinue to accrue interest for 2011 due to the impairment of the loan. The projected cashflows are:
Date of Cash FlowAmount Projected on 12/31/2011
December 31, 2012P3,000,000December 31, 2013 4,000,000December 31, 2014 5,000,000December 31, 2015 6,000,0005. The loan impairment loss to be recognized on December 31, 2011 is
 
A. 4,740,000B. 4,900,000C. 6,900,000D. 13,260,0006. The interest income to be reported by Jane Bank in 2012 isA.0B. 360,000C. 1,591,200D. 1,800,0007.ESTER CORPORATION’s accounting records indicated the followinginformation for 2011:Inventory, January 1P1,300,000Purchases 4,600,000Purchase returns 160,000Freight in 120,000Sales 6,800,000Sales discounts 40,000Sales returns 60,000A physical inventory taken on December 31, 2011 resulted in an ending inventoryof P840,000. Ester’s gross profit on sales has remained constant at 30% in recentyears. Ester suspects some inventories may have been taken by a newemployee.On December 31, 2011, the estimated cost of the missing inventory isA.302,000B. 330,000C. 840,000D. 1,170,0008.CLAIRE COMPANY’s inventory records showed the following information onDecember 31, 2011: 
Cost Retail
Inventory, January 1P 560,000P 1,400,000Sales 10,000,000Purchases 4,960,000 10,320,000Freight in 150,000Markup 1,000,000Markup cancellation 120,000Markdown 500,000Markdown cancellation 100,000Estimated normal shrinkage is 2% of sales.The estimated cost of inventory on December 31, 2011 at approximate lower of average cost or market retail isA.900,000B. 920,000C. 990,000D. 1,012,0009.On January 2, 2011, ALEX COMPANY purchased marketable security securitiesto be held as trading for P5,000,000. The entity also paid commissions, taxes andother transportation costs amounting to P200,000. The securities had a marketvalue of P5,400,000 on December 31, 2011. No securities were disposed of during the year.The unrealized gain/(loss) to be reported in the 2011 income statement isA. 400,000B. (400,000)C. 600,000D. (600,000)10.On January 2, 2011, RANDY COMPANY acquired P8,000,000 of 12% facevalue bonds for P7,534,000 to be held as financial assets at amortized cost with a14% effective yield. Interest on bonds is payable annually on December 31 andthe bonds mature on January 1, 2015. The effective interest method of amortization is used.The carrying value of the investment on December 31, 2011 isA. 7,534,000B. 7,439,240C. 7,628,760D. 8,000,000

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