PRTC Managed by Excel Professional Services, Inc. OPEN FIRST PREBOARD (July 30 and 31, 2016) LETTER ANSWERS. MANAGEMENT ADVISORY SERVICES Nos. A 8 Nos. A 8 4 1 c 8 36 A c 2 8 c 7 ° B 3 c iG oreae o 8 4 8 Gani ap, D bd 5 8 Go 40 8 A 6 8 c 4 A c 7 A A 42 c A 8 c A 43 dD 8 9 D A 44 B c no. .¢ eae 4a. 8 8 1 8 dp (46 © c 12 8 pe a7. A 8 Aart ip Bo 48 A 8 uw o8B a 49 c 8 Basi cA c 50 D A BBs, at c . 7 8 8 52 c D 18. )c 8 53 s i BB 8. c 54 c 8 20 2A By oi SBD 8 8 21 8 A 56 c D 2 B c 7 8 8 ae st DB ry a 2 A c 59. B D ase ED c 60 D B Gch Laat okt c c 27 GA Co) 62 A € 2B 8 6 c A 29.1 =e C64 8B 8 0 dae B65 B B Sige HG, aad bd A See rC B67 A A Bie c D | 68 ¢ o Bek Ger: 69 A A 350A A. 70 B A Paget ADVANCE FINANCIAL ACCOUNTING and REPORTING Nos. A 8 Nos. a 8 1 c B 36 ° D 2 D A 37 B c 3 c c 38 A c 4 ¢ c 39 c A 5 A a 40 c A 6 A a 41 A D 7 D « 42 A ° 8 D D 43 o A 9 A . 44 D B 10 8 c 45 D c u c D 46 ¢ A 2 A © 47 D c 1B c A 48 < 8 14 8B c 49 A c 15 c 8 50 c D 16 ° A 51 B A 7 A A 52 A D 18 o D 53 A c 19 c D 54 D D 20 0 A 55 D ° a D A 56 A A 2 A ¢ 57 A ¢ 23 ¢ S 58 c o 24 D ¢ 59 c B 25 8 ie 60 € B 26 8 A 61 c c 27 c 8 62 A A 28 A D 63 8 . 29 D c 6a D D 30 D ic 65 3 A 21 A A 66 iS B 32 8 8 67 A : 33 c D 68 8 c 34 c D 69 D A 35 A c 70 D °SOLUTION AFAR FIRST PREBOARD July 30 and 31, 2016 1250 Contract price 2,000,000 Less Actual total profit 200,000 Total actual cost 1,800,000 Less actual costs in 2014 450,000 2016 1,025,000 1,475,000 Actual costs in 2015 325,000 1m cost-to-cost percentage of completion, the actual cost is also the recognized cost debited at the year-end to Construction cost. The full adjusting entry is Construction cost 325,000 cp 175,000 Construction revenue 500,000 20 3,.C ‘AJR (P1,920,000 - P1,760,000) 160,000 ‘Manila project is completed by year-end, no balance sheet presentation for CIP and PB. Gross loss to-date (full amount) (P2,160,000 ~ 720,000 -1,530,000) (90,000) ary CIP (P1,960,000 x 75%) 1,470,000 Less PB 1,140,000 Inventory 330,000 GA 7.0 8D Costs to date (Revenue to date under Zero Profit method) 81.60 million Less Costs(revenues) to-date in prior years 39.20 million Costs (revenues) in current year 42.40 million 9A cp 81.60 million Less PB (PaOm + P40m) 80.00 million Inventory P 1.60 million 10. 8 wc Brexit’s share of total sales (270 x P00) P 135,000 Less reimbursable expenses (P2,000 + P2,100) 4,100 Amount remitted P 130,900 A , Cost of invty of consigned mdse, end {(P375 x P500) + P2,000] x 230/500 P_ 87,170 13.¢ ‘Complete reclassification entry for recognized consignment profit in Consignment-Out: Cost of consignment sales 102,330, Delivery expense 2,100 Consignment profit 30,570 Consignment sales 135,000 Complete summary entry for total sales; Cash (108 x P640)+ (162 x P580) 163,080 : Consignmerit-in 135,000 ‘Commissions revenue 28,080 15.16.0 ‘The indicated gain of P6,240 will not be recognized at date of repossession. It will be deferred to the point of sale, by lowering the fair value to equal the unrecovered cost of the merchandise, Unpaid balance (96,000 ~ 19,200 ~ 19,200) 57,600 Less: Deferred gross profit (19,200 x 40%) 23,040 Unrecovered cost 34,560 Less: Fair value 40,800 Gain 6,240) q7.A- RGP during 2013 from: 2012 Sales (P300,000 x 30%) 90,000 2013 Sales (P900,000 x 40%) 360,000 Losses on repossessions in 2013: 2012 Sales {P150,000 - (P300,000 x 70%) (60,000) 2013 Sales {P225,000 - (P450,000 x 60%)} (45,000) Net realized gross profit in 2013 345,000 18.0 19. Billed price of shipments to branch ( 450,000 x 120%) 540,000 Shipping charges 142,000 Amount debited to the Home office account 552,000 20.D 21.0 Shipment from Home Office 375,000 ‘Merchandise returned (46,860) Merchandise inventory, end ; 252,000) Cost of goods sold at billed price 76,140 Less: Cost of goods sold at cost (76,1400/120%) 63,450 Realized profit to be taken up in the home office books 712.620 QR_{(375,000 = 46,860 — 252,000) «12021 x.20%, 12,690 22.8 23.¢ sales 403,200 Cost of goods sold at cost (504,000 ~ 151,200) / 140% (252,000) Expenses 32,400) ‘True net income ~ Branch 418,800 24. Total allowance for overvaluation 180,000 Less: Allowance for overvaiuation on current shipment (864,000-720,000) 144,000 Profit in beginning inventory 36,000 WPEE: Allowance for Overvaluation 36,000 ‘Merchandise Inventory, December 1, 2013 36,000 To eliminate the overstatement of the branch beginning inventory