CPA REVIEW HOOL OF THE PHILIPPE Manila FINANCIAL ACCOUNTING AND REPORTING Sunday, February 11, 2018 Best Prebourd Examinat 12:00 pam. to 3:00 p.m. SETA MULTIPLE CHOICE: MARK FULLY with Pencil No. 2 the letter of your choice on the answer sheet provided Make the mark DARK but do not use too much pressure, ERASURES ARE STRICTLY NOT ALLOWED. Numbers 1,2 and 3 Below are account balances and related information on December 31, 2018 for Seras Company. Cash and cash equivalents 3,900,000 Accounts receivable LO Allowance for doubtful accounts Cre Inventory Ca Prepaid insurwnce Cash in bank, net of bank overdraft of P300,000 in another bank 1,000,000 ‘Sinking fund to settle bonds payable due on December 32, 2020. 2,000,000 Petty cash 10,000 Cash withheld from wages for income tax of employees 190,000 General cash 700,00 Total cash and cash equivalents ~ 3.200.000 ‘The accounts receivable balance includes past due accounts in the amount of P100,000. The account is deemed uncollectible and should be written off. The inventory includes goods held on consignment amounting to P150,000 and goods of P200,000 purchased and received on December 31, 2018. The prepaid insurance includes cash surrender value of life insurance of P50,000. The petty cash balance includes unreplenished expenses of P2,000. What amount of cash and cish eguivatents should be reported on December 31, 2018? a. 2,198,000 ‘ b. 1.898.000 . ©. 3,898,000 a. 4,198,000 ‘What is the correct accounts receivable before allowance on December 31, 20187 a 1,300,000 b, 1,400,000 t ce. 1,500,000 4. 1,600,000 What amount of total current # ssets should be reperted on December 31, 2018? a. 7,598,000 b. 3,298,000 c. 5,698,000 d._ 5,598,000Number 4 Page 2 Alucard Compa frm as pany has two divisions, iscldcdii ate ‘sions, Aye and Bee. Both eres pose oy giisions, Aye and Bee, Both qualify as business components 1n 2018, the Will be competed early 2019, The teven i sue division Bes and its probable that the sion xpenses of Alucard Company for 2018 and 2017 are Sales-aye 2018 2017 Tota! nontax expenses Aye 3,000,000 4,600,000 iis Bee 4,400,000 4,100,000 jontax expenses-Bee 3,500,000 5,100,000 3,300,000 4'500,000 During the ta later part of 201 loss of 8, Alucard disposed of loss of P2,000,000 on the. disposal disposed of » portion of division Bee and recognized a pretax 0, on, tne ional, The ine tare 30% What amount off Fm a. 1,800,000 b. 1.260,000 ©. 1,680,000 4. 2,400,000 Number 5 Victoria Company reported the following items on December 31, 2018 Bank A — demand deposit Currency and coins on hand “S800 Savings deposit — for plant expansion ° 4,000,000 Bank B ~ demand deposit 200,000 300,000" 150,000 Treasury bills — 7 months maturity Treasury bills - 2 months maturity ating bslance for a P1,000,000 foan with the ‘The demand deposit in Bank B represents a 20% compens bank. Victoria may not withdraw the balance until the loan is repaid in 2021 aber 31, 2018? What amount of cash and cash equivalents should Victoria zep0" oP Dever a, 642,800 b, 842,800 c., 342,800 y d. $42,800 At December 31, 2018, Walter Company had accounts receivable of | ee a ae eed italiz, unique investment opportunity. On January, 1, 20 a bank offers. teal nn, an i eS “tee es cla As um Sl be made to the bank cot eaves Te ants receivable collection chee nae Me onthe unpaid balance OF the note at the beginning of the period. ‘Walter | Co Plus rie 30% of the accounts aid Gable dusiog January. What $8 balance of the bank ol 30% January 31, 2019? Number 6 a, 206,000 b. 266,000 cc. 261,000 4. 500,000Accounts receivable Debit Credit Allowance M © for doubtful Net credit sales ee On Decembe 20,000,000 31, 20 . | December 31 2019-1 i, EUke estimated that 3% of net credit sales will become uncollectible. On Of accounts recehvat in’, decided 10 change fiom the pergent of net credit sales method to the percent Sermethod. Luke estimated that 20% of the accounts receivable balance is Considered doubtful. No it and P6,000.000 ae sales and accounts receivable at December 31, 2019 are P25,000,000 5,000,000 50,000 7. What amount of allowance for doubtful accounts was reported at December 31, 2018? a. 600,000 ; b. 650,000 ©. 550,000 ! d. 700,000 8. What amount of doubtful ascounts expense should be shported for 20192 a. 1,200,000 ’. 1/000;000 ©. "680,000 ' 730,000 9. What isthe net realizable value ofthe accounts receivable on December 31, 20197 a. 6,000,000 b. 4,800,000 ©. 43450,000 . @. §1480:000 Number 10 Anderson Company's year-end inventory balance on December 31, 2018 is P1,650,000 based on physical count and before considering the following trans4ctions a, Goods shipped to Anderson f.0.b. destination on December 20, 2018, were received on January 4, 2019. The invoice cost is P300,000. 4 b. Goods shipped to Anderson fo.b. shipping point on December 28, 2018, were received on January 5, 2019. The invoice cost is P170,000 c. Goods shipped from Anderson to a customer f.o.b. destination on December 27, 2018 were received by the customer on January, 3, 2019. The sale price is P400,000 and the cost is 220,000. 4. Goods shipped from Anderson to a customer f.0.b. destination on December 26, 2018 were received by the customer on December 30, 2018. The sale price is P200,000 and the cost is 130,000, €. Goods shipped from Anderson to a customer f0.b. shipping point on December 28, 2018 were received by the customer on January 4, 2019. The sale price is P250,000 and the cost is 120,000. * ‘What is the correct inventory balance on December 31, 2018? a. 2,170,000 b. 2,160,000 €. 2,290,000 4. 2,040,000