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    7 views12 pages

    AP 1stpreboard1

    Uploaded by

    chim.chim
    AP

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
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    D ‘CPA REVIEW SCHOOL OF THE PHILIPPINES Manila AUDITING PROBLEMS JULY 31, 2011 FIRST PREBOARD EXAMINATION SUNDAY, 8:00AM - 11:00AM SETA INSTRUCTIONS: CHOOSE THE BEST ANSWER FOR EACH OF THE FOLLOWING. FULLY ‘SHADE ONLY ONE BOX FOR EACH ITEM, STRICTLY NO ERASURES ALLOWED. PROBLEM NO. 1. You have been asked to audit the TANYA COMPANY. During the course of your audit, you are asked to prepare comparative data from the company’s inception to the present. You have determined the following: a. Tanya Company's charter became effective on January 2, 2007, when 20,000 shares of P10 ordinary shares and 10,000 shares of 7% cumulative, nonparticipating, preference shares were issued. The ordinary shares were sold at P12 per share, and the preference shares were sold at par value of P100 per share. “ b. Tanya was unable to pay preference dividends at the end of its first year. The owners of the preference shares agreed to accept 2 ordinary shares for every 50 preference shares ‘owned in discharge of the preference dividends due on December 31, 2007. The shares were issued on January 2, 2008. The fair market value was P30 per share for ordinary shares on the date of Issue. c. Tanya Company acquired all the outstanding shares of Akinka Corporation on May 1, 2009, in exchange for 10,000 ordinary shares of Tanya. . Tanya split its ordinary shares 3 for 2 on January 1, 2010, and 2 for 1 on January 1, 2011. e. Tanya offered to convert 20% of the preference shares to ordinary shares on the basis of 2 ordinary shares for 1 preference share. The offer was accepted, and the conversion was made on July 1, 2011. f. No cash dividends were declared on ordinary shares until December 31, 2009. Cash dividends per share of ordinary shares were deciared and paid as follows: June30——- Dec. 32 2009 ~ 3.20 2010, P1.50 P2.50 2011 P1.25 ~P1.00 Based on the preceding information, determine the following: A. The number of ordinary and preference shares outstanding on December 31 of each of the "following years: e 7 Ay 2009 Ordinary Preference Sia A. 30,000 10,000 a 8. 30,200 9,800 c 35,000 10,000 D« 30,400 10,000 we Page 1 of 12 Pages wa Ordinary A 45,300 10,000 BP 45,600 10,009, c 76,000 10,000 D. 52,500 9,800 / 3.21 : Ordinary Preference A* 95,200 8,000 B. 49,600 10,000 c 93,200 7,840 D. 93,200 8,000 B. The amount of cash dividends declared and paid to shareholders for each of the following years: a 2010 7” AB, P182,400 B, P83,600 Cc. P159,600 D. P121,600 5. 2011 A. 214,200 B. P217,200 C. P153,200 D. P209,200 ~ -000000000-~ PROBLEM NO. 2 On January 1, 2010, Samson Mfg. Co. began construction of a building to be used as Its office headquarters. The bullding was completed on June 30, 2011. Expenditures on the project were as follows: January 3, 2010 ‘ sor p2,500,000 ha March 31, 2010 17+ 3,000,000 S/tv 8 June 30, 2010 1s 4,000,000

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