You are on page 1of 3

1.

Dudong Electronics makes all of its sales on credit and accounts for them using the installment
sales method. For simplicity, assume that all sales occur on the first day of the year and that all
cash collections are made on the last day of the year. Dudong Electronics charges 18% interest
on the unpaid instalment balance Data for 2011 and 2012 are as follows:

2011 2012
Sales P100,000 P120,000
Cost of Goods Sold 60,000 80,000
Cash Collections
2011 sales 40,000 50,000
2012 sales 90,000

The interest income recognized in 2012 amounted to:

a. P 14,040 b. P21,600
c. 35,640 d. 49,700

2. Using the same information in No.1 compute the realized gross profit in 2012:

a. P14,384 b. P22,800
c. 37,184 d. 39,600

3. The books of Harry Co. show the ff. balances on December 31, 2012:

Accounts Receivable 313,750


Deferred Gross Profit (before adjustment) 38,000
Analysis of the accounts receivable reveal the following:
Regular Accounts 207,000
2011 instalments accounts 16, 250
2012 instalment accounts 90,000
Sales on an instalment basis in 2011 were made at 30% above cost; in 20102 at 33 1/3 above
cost. Expenses paid was 1,500 relating to instalment sales. How much is the net income on
instalment sales?
a. 11,000 c. 16,000
b. 11,500 d. 10,250

The Palubog Company has decided to seek liquidation after previous restructuring and quasi-
reorganization attempts failed. The company has the following condensed balance sheet as of May 1,
2011;

Assets Liabilities and Stockholders’ Equity


Cash 12,000 Accrued Payroll 40,000
Receivables (net) 280,000 Loans from officers 50,000
Prepaid expenses 1,000 Accounts Payable 60,000
Inventory 70,000 Equipment loan 360,000
payable
Plant Assets 300,000 Business Loan Payable 180,000
Goodwill 39,000 Common Stock 60,000
Deficit (48,000)
Total 702,000 Total 702,000
The equipment loan payable is secured by specific plant assets having a book value of 300,000 and a
realizable value of 350,000. Of the accounts payable, 40,000 is secured by inventory which has cost of
40,000 and a liquidation value of 44,000 . The balance of the inventory has a realizable value of 32,000.
Receivables with a book value and market value of 100,000 and 80,000 respectively have been pledge as
collateral on the business loan payable. The balance of the receivables have a realized value of 150,000.

4. Assuming trustee expenses of 12,000 in addition to recorded liabilities, which of remaining


unsecured creditors has the next highest order of priority.
a. Accrued Payroll
b. Equipment Loan Payable
c. Loan from officer
d. Business loan payable

5. The realizable value of assets pledged with fully secured creditors is:
a. 459,000
b. 44,000
c. 40,000
d. 489,000
6. Of those creditors who are partially secured, their unsecured amounts are:
a. 430,000
b. 110,000
c. 540,000
d. 120,000
7. The total realizable value of free assets to unsecured creditors before unsecured creditors with
priority is:
a. 628,000
b. 232,000
c. 220,000
d. 198,000
8. The dividend to unsecured creditors or the expected recovery percentage of unsecured
creditors (rounded) is:
a. 90%
b. 100%
c. 88%
d. 76%
9. Estimated deficiency to unsecured creditors is:
a. -0-
b. 22,000
c. 2,000
d. 12,000
10. Estimated loss on asset disposition:
a. 51,000
b. 89,000
c. 51,000
d. 90,000
11. Estimated gain as asset disposition:
a. 56,000
b. 54,000
c. 52,000
d. 6,000
12. Estimated amount paid to unsecured creditors with priority is:
a. 10,000
b. 30,000
c. 40,000
d. 110,000
13. Estimated amount paid to fully secured creditors is:
a. 40,000
b. 390,000
c. 470,000
d. 430,000
14. Estimated amount paid to unsecured creditors without priority:
a. 70,000
b. 61,600
c. 20,000
d. 50,000
15. Estimated payment to partially secured creditors is:
a. 358,800
b. 516,800
c. 168,000
d. 430,000
16. Estimated payment to creditors is (discrepancy is expected due to rounding off).
a. 580,000
b. 659,600
c. 571,000
d. 668,400