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NJPIA REGION 3 COUNCIL

21st ANNUAL REGIONAL CONVENTION

PRACTICAL ACCOUNTING 2
1. Two Wives Corporation, a manufacturing firm produces two joint products,
YVONNE and JANINE. The records show that the joint production costs for the
month of May 2014 were P45,000. During May 2014 further processing costs
beyond the split-off point, necessary to convert the products into salable
form, were P24,000 for 2,400 units of YVONNE and P36,000 for 1,200 units of
JANINE. YVONNE sells for P25 per unit and JANINE for P50 per unit.
Assuming that the company uses the net realizable value method for allocating
joint product costs, the joint costs allocated to YVONNE for the month of May
2014 is:
A. P15,000 C. P27,000
B. P18,000 D. P30,000

2. Certain balance sheet accounts in a foreign subsidiary of Jonathan Company at
December 31, 2014, have been stated into Philippines pesos as follows:
Stated at
Current Rates Historical Rates
Accounts receivable, long term P 200,000 P 220,000
Accounts receivable, long term 100,000 110,000
Prepaid insurance 50,000 55,000
Goodwill 80,000 85,000
P 430,000 P 470,000
This subsidiary’s functional currency is a foreign currency. What total
amount Jonathan’s balance sheet include for the preceding items?
A. P430,000 C. P440,000
B. P435,000 D. P450,000
3. Using the same information in No. 2, and the subsidiary’s functional currency
is peso. What total amount Jonathan’s balance sheet include for the preceding
items?
A. P430,000 C. P440,000
B. P435,000 D. P450,000
4. On March 1, 2014, Xander and Agnes decide to combine their business and form a
partnership. The balance sheets of Xander and Agnes on March 1, 2014 before
adjustments show the following:
Xander Agnes
Cash P 9,000 P 3,750
Accounts receivable 18,500 13,500
Inventories 30,000 19,500
Furniture and fixtures (net) 30,000 9,000
Office equipment (net) 11,500 2,750
Prepaid expenses 6,375 3,000
P105,375 P 51,500
Accounts payable P 45,750 P 18,000
Xander, capital 59,625
Agnes, capital ________ 33,500
P105,375 P 51,500
They agreed to provide 3% for doubtful accounts of their accounts receivables
and found Agnes’s furniture and fixtures to be under-depreciated by P900.
If each partner’s share in equity is to be equal to the net assets invested,
the capital accounts of Xander and Agnes respectively would be:
A. P58,170 and P33,095 C. P 59,070 and P32,195
B. P58,320 and P32,495 D. P104,820 and P50,195

5. Grande Corporation is a manufacturing company engaged in the production of a
single special product known as “There is Forever”. Production costs are
accumulated with the use of a job-order-cost system.
The following information is available as of June 1, 2014:
Work-in process.........................................P 10,710
Direct materials inventory.............................. 48,600
In analyzing the job-order cost sheets, the records disclosed that the
compositions of the work-in-process inventory on June 1, 2014 were as
follows:

750 P 24. 3..... 2.250 P 10..900 hours at P 5 per hour Factory overhead of P 2... 2..350 D..560 C.000 D. however....... P 142.....000 203.210 Inventory of direct materials... P111... P88.... the number of units produced is not increased in the process..... - Units transferred from preceding department .800 75... the following information was gathered in connection with the inventories: Inventory of work-in-process: Direct materials used.. P 4...600 Items 6 to 8 are based on the following: The La Presa Products Company manufactures a single product being used for heavy industrial machineries....020 6.... labor and overhead. P690........800 B...000 - Units completed and transferred out 80.50 per direct labor hour was applied to production..580 Overhead 100....000 P118.. Assume that all inventory accounts have zero balances at the beginning of the month: Standard Cost Standard Monthly Per Unit Costs _____ PRACTICAL ACCOUNTING 2 ....... 2010 20..... P185.. The following information summarizes the standard cost for producing one metal tennis racket frame. Spoiled units have no recoverable value. the variances for one month's production are given.Smoothing: A...800 8.... P138... 2010 ..000 Compute the cost of goods manufactured: A....... P 73........... P60..000 B............ P496..500 Labor 184. P 131..P 3.960 Direct labor (1...600 9.. 4...710 The following manufacturing activity occurred during the month of June 2008: Purchased direct materials costing P 60.. 7..000 18... P584....500 hours).000 7.000 Spoiled units are 50% complete as to materials... 2010 follows: Cutting Smoothing Department Department Materials 100% 100% Labor 60% 80% Overhead 20% 40% The following charges were indicated in the cost records for the month of January 2010: Cutting Smoothing Department Department Materials P300......800 B..960 Direct labor (900 hours)....... P84...000 Units started in production 100.......... P 108.......000 Units spoiled in production .600 D. The following records for each department were obtained from the books of Precision Company for the month of January 2010: Cutting Smoothing Department Department Units in process.......000 60. Materials are added to the product in each department. 80...000 D...400 C..... The cost of work-in-process ending in Cutting Department: A. January 31. At the end of June 2014.. January 1..500 Factory overhead applied.P 12.REGIONAL MOCK BOARD EXAMINATION Page 2 of 6 Direct materials used....000 Direct labor worked 9.... In addition..500 Factory overhead applied.000 Units in process... The cost of work-in-process ending in Smoothing Department: A.800 C.P 51. Percentage of completion of units in process on January 31.... It operates on three shifts under two departments...000 C. P556.....850 B.. Its cost is treated as a separate cost element (expense) in the department where the spoilage occurs.... The total cost transferred to next department . P 118.. Cutting Department and Soothing Department.

000 B. The Gilbert Company acquired 80% of The Torres Company for a consideration transferred of P100 million.000 Inventory.75 unfavorable Materials quantity.000 Total …………………………………………………………………………… P 80. A.000 The branch inventories were: 12/01/2010 12/31/2010 Merchandise from home office………………… P 70.000 Total available for sale……………………… P460. A. upon termination of the joint venture and distribution of the profits: BOOKS of M N O Accounts with Dr Cr Dr Cr Dr Cr M 900 900 N 750 750 O 1. N pays P1.650 Final settlement of the joint venture will require payments as follows.000 12.000 360. 3. True True Items 12 and 13 are based on the following information: The income statement submitted by the Pampanga Branch to the Home Office for the month of December.000.080. Torres's net assets were P85 million at the acquisition date. 5.00 unfavorable What were the actual direct labor hours worked during the month? A. The consideration was estimated to include a control premium of P24 million.000 C.00 P 8.000 Cost of sales: Inventory.00 unfavorable Labor rate. December 31…………………………… 100. 29% 13. The billing price based on cost imposed by the home office to the branch. M pays P900 to N and N pays P750 to O 11.000 Net income P 60. 4.000 PRACTICAL ACCOUNTING 2 . P10.000 Local purchases…………………………………………………… 10.400 Direct labor 2 hrs @P2. and A.000 Operating expenses ………………………………………… 180.500 Variances: Materials price.650 1.60 5.920 Factory overhead: Variable 1.20 10.000 Shipments from Home Office………………… 350. Statement (1) Statement (2) Statement (1) Statement (2) A. 2010 is shown below. P520. 100% D.00 10. P244. P16.80 3. True False B.REGIONAL MOCK BOARD EXAMINATION Page 3 of 6 Materials P 4. Sales …………………………………………………………………………… P 600. Are the following statements true or false.780 Fixed 5. The joint venture accounts in the books of the venturers (participants) M. M pays P900 to O and N pays P750 to O B. False False C. 40% B.000 P100. False True D. 4.650 to M and O pays P900 to N D.000 16.00 unfavorable Labor efficiency.000 C. show the balances below. P2. 2008 after adjustment. After effecting the necessary adjustments the true net income of the Branch was ascertained to be P156.000 Local purchases……………………………………………… 30.000 P 84. December 1……………………………… P 80.000 Gross margin ………………………………………………………… P240. according to PFRS3 Business combinations? (1) Goodwill should be measured at P32 million if the non-controlling interest is measured at its share of Torres's net assets. (2) Goodwill should be measured at P34 million if the non-controlling interest is measured at fair value. 140% C. N and O. P500. The balance of allowance for overvaluation of branch December 31.400 10. O pays P900 to M and P750 to N C.800 D.

000 P420. P167. Following data pertain to Gilbert Company which sells appliances on an installment basis: 2008 2009 2010 Installment sales P390.000 Repossessions on defaulted accounts were made during 2010. Bonifacio contractors had a 3-year construction contract in 2012 for P900.360 C.000 Bonifacio Contractors maintains a separate bank account for each construction contract. The Kimmy Heart Company acquired equipment on January 1. On the last day of the accounting period Genie sold to Snipes a non-current asset for P200. 2009.600 B. what adjustments should be made to the depreciation expense for the year and the statement of financial position carrying amount in preparing the consolidated financial statements for the year ended December 31.000 Construction in progress…………………………………………………………………………P 93. None of the above 14.000 Reduce by P40. Increase by P8. The Snipes Company owns 65% of The Genie Company.600 288. This fair value was not incorporated into Kimmy Heart's books and the depreciation expense continued to be calculated by reference to original cost. and 2010 sales was: A.000 December 31. P 96.000 P 300. as follows: From Sales Made in: 2009 2010 Account balance P 10.960 15. Data on this contract follows: Accounts receivable – construction contract billings P 30. Increase by P8. The asset originally cost P500. Increase by P300. with a remaining life of 5 years. Under PFRS 10 Consolidated financial statements.375 Net income recognized in 2012 (before tax)………………………… 15. What was the estimated total income before tax on this contract? A.000 From Sales Made in: Installment accounts receivable balances: 2008 2009 2010 January 1. 2010 .375 10% retention……………………………………………………………………………………………………… 9.000.000.000 P480. Increase by P300. P94.000 B.000 D.000. P 60.750 Less: Amounts billed…………………………………………………………………………………… 84. P62. P144.000 C.000 16.000 PRACTICAL ACCOUNTING 2 . On January 1. The company uses the percentage-of-completion method for financial statement purposes. P45.000 D.000 Decrease by P24. P 9.000 Cost of sales 237.000 and at the end of the reporting period its carrying amount in Genie's books was P160. Reduce by P40.000 Reduce by P26.000 B.000 B. P24. Bank deposits to this contract amounted to P50.000 D.000 C.000 Increase by P24.000. The group's consolidated statement of financial position has been drafted without any adjustments in relation to this non-current asset. 2009 at a cost of P800. Reduce by P40.500 3.000 Net resale value of repossessed merchandise 4.900 243.000.REGIONAL MOCK BOARD EXAMINATION Page 4 of 6 B.000 P 5. depreciating it over 8 years with a nil residual value.500 The total realized gross profit in 2010 on the collections of 2008. 2012 The Ginny Company acquired 100% of Kimmy Heart and estimated the fair value of the equipment at P460.000 17.000 Increase by P195. 2010 P 24. what adjustments should be made to the consolidated statement of financial position figures for non-current assets and retained earnings? Non-current assets Retained earnings A.000 D.000 Increase by P300. Under PAS27 Consolidated and separate financial statements.000. P135. 2013? Depreciation expense Carrying amount A. Income to be recognized each year is based on the ratio of cost incurred to total estimated cost to complete the contract.000 P 320.

000 of direct materials.9706.000 of conversion costs to Raw and In Process Inventory. 4. During August 2011. (a Philippine-based company) sold parts to a foreign customer on December 1.000 loss 19.0032 (3 month) March 31. The following event took place in August: 1.000 Decrease by P24.000 of conversion costs. as a fair value hedge of a foreign currency receivable. P680. The amount of ending finished goods: PRACTICAL ACCOUNTING 2 . Decrease by P8. in connection with the P100.000 loss B. P 5. P880. Finished 16. waived.000 D.000 Increase by P24. P1.000 franchise fee.000 Amount charged to patients 800. The standard cost for each meter is: Direct material P 20 Conversion costs 44 Total P 64 Assume that the company had no inventory on August 1.941. the firm produced 16.000 payable in five equal installments starting with the payment upon signing of the agreement.0033 .000 What is the hospital’s net patient service revenue? A. The following exchange rates apply: Forward rate Dates Spot Rate (for 3/31/2010) December 1. 18. with payment of 10 million foreign currencies to be received on March 31. 2010. Assuming that MNC entered into no forward contract. P5. the franchise may be cancelled with whatever obligation owing to Pista Hut. 2010 .000 meters. Purchased P320.800 meters for P100 each. P20.000 Undesignated gifts 80. Decrease by P8.000 gain D.80 decrease in net income. 3. P 25. Incurred P708.000 22. C. P105. Sold 15. Pista Hut granted a franchise to Eat-N-Run for the Rainbowbelt area. 2009.000 C.0034 (4 months) December 31. P3.000 C. 2.000 D. Applied P704.0035 P. Pista Hut earned franchise fee of: A. 2009. how much foreign exchange gain or loss should it report on its 2009 income statement with regard to this transaction? A. P800.000 Contractual adjustments 110. P58.000 decrease in net income. For the first year.000 D. Should the operation of the outlet prove to be unprofitable.000 Bad debts 10.000.000 B.000 B. A hospital has the following account balances: Revenue from newsstand P 50. No impact on net income. Eat-N- Run was to pay a franchise fee of P100. 20.000 Interest income 30.800.000 gain C.20 increase in net income. P690. P1. 5. B. D. P2. what is the net impact on its net income in 2009 resulting from a fluctuation in the value of the foreign currencies? A. 2009 P. 2009 .000 Items 18 and 19 are based on the following information: MNC Corp.0038 N/A MNC’s incremental borrowing rate is 12 percent.000 Salary expense – nurses 100.REGIONAL MOCK BOARD EXAMINATION Page 5 of 6 C. The present value factor for three months at an annual rate of interest of 12 percent (1 percent per month) is 0. The first year’s operation generated a gross sales of P500. Kuchen Manufacturing uses backflush costing to account for an electronic meter it makes. The franchisee was to pay monthly 1% of gross sales of the preceding month.000 21. P2.000 meters of which it sold 15. Assuming that MNC entered into a forward contract to sell 10 million foreign currencies on December 1.

X and Y has filed for bankruptcy.000 25. the company had presented one progress billing. P11. P13. assuming use of the percentage-of-completion method of accounting. If the dividend to general unsecured creditors is 80% how much can Xylo expect to received? A. Agency 007 received a request for replenishment of petty cash fund for the following expenses: Office supplies P 500 Transportation fares 100 Repair of aircon 200 JRS mail 160 The entry for this transaction would be: A. P 1. Among others. corresponding 10% completion. Jaja Inc.000 on account.000. P57. P12. P48. No entry B. P58. In 2014. Memorandum entry to the RAOMO C.775 D.200. P12. Office supplies expense……………………………………………………… 500 Travelling expense…………………………………………………………………… 100 Repairs and maintenance……………………………………………………… 200 Other maintenance and operating expenses………… 160 Petty Cash Fund………………………………………………………………… 960 24. By the end of 2014.REGIONAL MOCK BOARD EXAMINATION Page 6 of 6 A.000.000. Retention of ten percent on all billings (to be paid within the final billing upon completion and acceptance of the project).000 D. 2014 for payment in January of next year. was awarded to contract to build a 1. which was evaluated and accepted by the client on December 29.000 C.850 23. On September 30.000 PRACTICAL ACCOUNTING 2 . 2. P12.000 C. P12. Nil or zero C. X and Y Inc. Jaja Inc. Its statement of affairs lists the accounts receivable securing the Xylo account with an estimated realizable value of P45. the parties agreed to the following: 1. P60.800 B. Progress billings are to be paid within 2 weeks upon acceptance. 2014. MDS…………………………… 960 D. and 3.200.000 B. received cash a total fee of: A.000 B. owes the Xylo Corporation P60.000 D. which is secured by account receivable with a book value of P50. Ten percent mobilization fee (deductible from “final billing”) payable within ten days from the signing of the contract.000-room hotel for P120 million.880. The unsecured portion is considered a claim under the bankruptcy law. Office supplies expense……………………………………………………… 500 Travelling expense…………………………………………………………………… 100 Repairs and maintenance……………………………………………………… 200 Other maintenance and operating expenses………… 160 Cash – National Treasury.