ReSA The Review School of Accountancy ‘Tel. No, 735-9807 & 734-3989 PRACTICAL ACCOUNTING 2 april 13, 2014 (Sunday) , Pinal Pre-Board Examination 11:30 P.M. — 2:30 P.M. 7 MULTIPLE CHOICE INSTRUCTIONS: “Select the correct answer for each of the following questions. Wark only one answer for each item by shading the box gorresponding to the letter of your choice on the sheet provided. STRICTLY NO ERASURES ARE ALLOWED. Use pencil no. 2 only. * Cd. Matinta corporation, a manufacturing firm produces to joint products, PATO and TABU. The records show that the joint production costs for the month of Nay 2014 were 45,000. During May 2014 further processing costs beyond the selit-off point, necessary to convert the products into salable form, were P24,000 tor 2,400 units of PATO and 36,000 for 1,200 units of TABU. PATO sells for P25 per unit and TABU for PSO per unit. Assuming that the company uses the net realizable val Jo method for allocating joint product costs, the joint costs allocated to PAT TO for the month of May 2014 ist Ff A. £15,000 : ef 227,000 ztoe eve 5: E1600 D. P30/000 in iq gyery ME Items 2 and 3 are based on the following: 2. Zeta Company is proparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allccated to the individual product lines from the information given as follows: specialty Windows Units Produced. nrmnnme vn 25 Materials move per product line 15 Direct Labor hours per unit 200 Budgeted materials handling sostensm 2 50,000 Under a costing system that allozates overhaad on the basis of direct labor hours, the materials handling costs allocated to one unit of wall mirrors would be: ‘A. P1, 000 c. 2,000 B. B 500 D. P5,000 Yo 13. the materials handling costs allocated to one unit of wall mirrors under Activity-Based Costing (ABC) would be: A. P1,000 c. 21,500 B: P 500 D. P2,500 ! 4. Certain balance sheet accounts in a foreign subsidiary of Rose Company at 7 December 31, 2014, have been stated iato Philippines pesos as follows: Stated at ___| Gurcent Rates [ sistorical Rates Recounts receivable, long tem | P 200,000, © 220,000 "| ‘Aeoounts receivable, long term 700,009, 110, 000" Frepaid insurance 50, = 58, 000577 (Goodwi IT 80,000 85 0007 FAT] P.430,.009 Ea70.000 This subsidiary’s functional currency is a foreign currency. what total amount Hove's bélance shest include for the preceding Lismes =, . xr Pa30, 000 ©. ‘Peed, 000 ‘ 3. 435,000 B. P4590, 000 Be A. P430,000 ¢. P440,000 partnership. The balance sheets of Evan and Helen on March 3 adjustments show the following: 2018 beforeReSA: The Review School of Accountancy Page 2 of 12 ee eso sso Sees aa A Tay at hae [Srspstarsement are} — sae ‘Recounts payable Hige.ws | P31,500 45,750} P 18,000 ‘Evan, capital Helen, capital 59,625, 3500 Bis gS | B31, 500 They ageaed to provide TW Tor Gouna ace and found Welen'a furniture and Fintan to wong Tf each partner’ the capital accounts of Evan A. P58,170 and P33,095 B. P58,320 and P32, 495 f their accounts receivables \der-depreciated by P00. ® share in equity is to be equal to the net assets invested, end Helen respectively would be: of P 59,070 and P32, 195 cane [se ma Tis ae 7 cost. The branch, in turn, sells the merchandise it receives from the hone eK. P120, 000 c. P140, ge ee D. 130,000 B*gingle special product known as "Marvel". Production costs are accumviated S.GRe ae of a Jovvorder™cost systen. The following information 19 available ¢9 of tifect material daventory. 0. in anmiysing the jeb-order cost sheets, Conponithons bongo June 1, 2014: see 20,710 48, 600 the reéords disclosed t! of the work-in-process inventory on June 1, 2014 hat the were ag* BL AL B ReSA: Te Ree Scho of Acoma Page 3 of 12 Direct matoriaia used... ect. labor (900 hours) - Factory overlwed applied. 3,960 4,500 ss sgn 21250 MP ie P10, 70 ‘The following menutacturing activity occurred during the month of June 2008: sd direct materials costing P 63,000 Direct Tabor worked 3,900 hours at P 5 per hour tof P 2.50 par direct labor hour was applied to production. At the ond of dune 2014, the following information nas’ gathered bn conection With the inventorie Inventory of workin DM h Heep Direct materials Lo B 35, spl oes Direct Inbor {1,5 800 pa dety cous Factory overhead aj 31 150 Wear rs Ene ba Start Inventory of direct ma alee LPSi00g «4a Ze neD Compute the cost of qunde manatactureds pe ysre Ae P 142,560 F 131,850 Mal ye Bl p tistass oi fosteae tS ese ‘Items 10 and 11 are bas on the following information: KY, and 2, a partueeshig form vanuary 3, 2014 had the following initial % --P 100,090 ener 150, 000 z 225,000 The partnership. agesomn! stat at the profits and looses are to be shared eanally by the partners afver conssuevation a made for the followings allowed to parrners: P69,009 tor x, P&H,a00 Tor Y, and P36,000 + Average partners’ capital balances during © Additional information: + On June 20, 2014, X invested an additional PéD, no = 22 withdrew P70, 000 fre the pa are the remaining partneranip profit was P$,000 for each partner. year shall be allowed 108. nerehip on Septenter 30, 7014. 10. Interes average capital balances of the parte: ated Be bae, 730 ©. 257,425, B. 53,750 D. 760, 625 11. Partnership net profit at Decenber 31, 2014 before salagies, interests and Partners’ shal Wer wast a ‘A. P95, 750 , Patt, 625 B. F207, 750 750 2 Itens 12 through 14 are based on the folloving Kanlaon Corporation started operat ions on 1, 2014 selling home appliances and furniture sels both tor cash and on instalinent basis. lata” on the Snavalimen. sales operations of tne company gatheced for the yours ondivg becenber 31, 2034 and 2015 were we follow: ~ 7 a aoa 7015 Tnatalinent gales P00, 000} ~ P50, 006 Tost of instalinent basis 740,000-[ 72; 350,000 Caan collected on installnent salou 2014 inctatinent sales 210,000] 150,000 2055 installment sales 190, 900 Additional information: z On dJaniary 5, 7016, an instaliment soles on 2014 was defdulted and the merchandise with an appraised value of P5,000 wan tepunsessed. ‘Nelaveg Tnstadinent cece:vable balance on January 5, 7016 was PB 00 crred Gross Profit on December 31, 204% Wii: ask + 12. The hatance of the uf 1. 264,000 eee P19, 000 [Be P76, 000 b. 290,000 12. The balance of the Deferred Grons Profit control count at December 31, 2015 was: p76,000 cc. P169,000 p130con0 D. F199,000 14, Recording the repossessed mefchandine at its appraisea value, the loss on the repossessiun shouie bet A, Wo gain or ne lous P 1,900 gain E6900 gon Perens gain oxReSA: The Review School of Accountancy Page 4 of 12 Items 15 to 19 are based on the following: The Precision Products Company manvfactures ¢ single product being used for heavy Industrial ‘machineries. It operates on three ‘shifts under two. departmenta Cutting Departnent and Soothing Department. Materials are added to the produce on each department; however, the number of units produced is not increased in the Process. ‘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, January 1, 2010 = Unite transferred fron preceding department 80,000 Units started in production 100, 000 > Units completed and transferred out 80,000 60,000 Units in process, January 31, 2010 20,000 18,000 Units spoiled in production * 2,000 Spoiled units are 50% complete as to materials, labor and overhead. Its cost is treated as a separate cost element (expense) in the department where the spoilage eccurs. Spoiled units have no recoverable value. Percentage of completion of units in process on January 31, 2010 follows: cutting Smoothing Department Department Materials 1008 TOO" Labor 608 808 overhead 208 408 The following charges were indicated in the cost records for the month of January 2010: cuteing Snoothing Departacnt Department, Materials 7306, 008 416, 500 Labor 184,000 203,580, Overnead 100,809 75,020 15. The total cost transferred to next department - Smoothing: AL P496,000 c. P5ee, 890 B. P556,000 Bs P6990, 000 16. The cost of work-in-process ending in Cutting Department? A, P8a,00 . P60, 000 BL p84, 090 D. e 4,800 17. The total cost transferred te finished goods: A. P4g6,000 © Pse4, 200 8. 556,000 D. pés0,000 18. The total cost transferred to factory overhead/abnormal spoilage: P17, 700 ©. P6, 200 : p11, 500 Deo 19. the cost of work-in-process ending in Smoothing Department: P185, 400 ¢. P 73,800 8. Pili, 600 D. P138, 600 20. tuctiie Ic. manufactures a product that gives rise to a *Robon." The only costs associated with Robon are addit iona of P1.00 for each unit. Lucille accounts for "Robo" sales its separable costs from such sales and then by deducting this ‘nce meount from the cost of sales of the major product. For the past year 2,000 ante ee Robon were produced which were sold for €3.00 each. grea” pase Sales revenue and cost of gocds sold from the main product were PS00,000 and P400,000 respectively. Compute the gross margin after considering ‘the oye product sales and costa, ‘A. P 96,000 €. 104,000 B. P100,.000 D. P10, 000 21, Using the same information in No. 20, L€ Lucille changes its method of accounting for Robon gales by showing the net amount as "O.her Incowe,* the effect on the gross margin would be: APO c. Pa, 000 '8. 2,000 BL Pe, 000 | Using the eame information in No. 20, if the acct by showing Une net amount aa "Other Tacome, period would be 86,000 Increase ©. P6,000 decrease %. P4,000 decrease DL None: by-product called 1 processing costs first by deducting unting method were changed “the effect on net income for the(Lo 26. The balance sheet as of June 30, 2012 forthe partnership of Dom, Joc, dnd D ReSA: ‘The Review School of Accountancy WR Te folowing information sunmarives etal tennis’ racket Production are given Page 5 of 12 for pyodusing one for one month's all inventory accounts have zero balances the standard cost frame. In addition, the variances Resume that at the beginning of the month: ; Standard Cost standard Monthly . Per Unit costs Materials ? 7.00 ® 8,400 Direct laber 2 hrs apz.60 | 5.20 10, 920 Factory overhead: Variable 1.00 3,790 Fined soa 10,500 Variances: Materials price, P264.75 unfavorable Materials quantity, P500.00 unfavorable fhe He bry Labor rate, P420.00 unfavorable aay $e, Labor ettlolenay,#2/00,00 unfavorable giy ce diey What wore the actual direct labor hours worked during the month? A.) 5,000 c. 4,000 AR x Ad sag ANK 2h: B. 4,800 b. 3,400 F.tee sec 24. Using the same intormation in No. 25, what wore the actus] qugntities of materials used during the month? Titev A. 2,156 C. 2,225 f 4 tev te B. 2,100 D. 1,975 : +The Joint venture accounts in the books of the venturers (participants) M,N and ©, show the balances below, upon termin distribution of the fon of the joint venture and [ “Recounts with o Final settlement of the joint venture williigauine, paysouty qi Fol lows A.M pays P900 to O and N pays P750 to O : cp -#2 0 pays P900 co M and P50 to N r oe CL N pays P1,650 to M and O pays P900 tO NS | nv yd DL M pays P900 to Nand N pays PSO toO ig & Rey show the following intormaticn: Tolal assets {at cost) vonseB_3604.000 fry Dom, 1o3R—— 2B 20,000 . Dom, capstan i TIL 83,000 7 Jon, Capital nnn 17,000 4 Rey, capitalmnnn oom 180, 009 * a A Total Te. 360.000 tk jas) gavesc anny partons Shel lie etlices’ Boom Rite (icboecsliipt ana ste “was Le ee ae EAE ber aueata he majumtad os uate Fed valies Of E408, 009 fe oF vune 30, 2012. The partnership would pay Dom P121,000 cash tor Don’ ® Bireneramip interest and includes the payment of Loan to Oom. No goodwill is to 'be recorded. ow, Joe, and Rey share profits and losses: 25%, 25%, and 50% respectively. After bon's retirement, what is the balance of Rby’s capital account? A. P180,000 &. P200,000 B. P206, 000 0. Zero (Plo 'the work-in-process account of the Malinta Company which uses a job order Gost ‘system follows: Aprit 1 balance 725,000 | Finished goods 125,450 Divect materials 50,000 7 Direct labor 40,000 F400 weed Overhead applied 307,000 sis overhead fa applied to prot lan-at a predetermined rate based on divsed 2 a Gabor cost. The work-in-process on April 40 represents the cost. of Job No. : Goer wmich has been charged with dlrect lapoc cost of 3,009 and Job No. 789. AR Mnigh'has been charged with applied overhead of P4400. woe tone ptcolsack asteiiwg. cia fave te ioe Mews 40 hed: (OE amociiod oy Me eietob _ oR 3. balsoe 2 tert00D ReSA: The Review School of Accountancy Ge Jee Page 6 of 12 consideration 8. The Natural Company acquired 908 of The Lansferred of Pl0Gmitiion. the consideration wos eotented Co sere e8 Gontrol preaiun of 924 million. Loco's net casate were MMe Aha Ae acquisition date. Are the following statements true oer. waegitg oe PFRS3 Business combinations? . (2) “Goodwill” shovid. be measured at 032 milion it interent is measured at ite share of Local's net ascets’ (2) Goodwill” “should be nensured at 234 million Ie the nen-cont¥olling Interest in meawuced at fair value: 1 non-cont rolling e) Statement (2; Statement (1) Statement (2) a. False zo ‘True Falee tase Bs True De True Tree cy (2% The Moon Company acquired a 708 interest in The Swan Company for P1, 490,000 when the fair value of Swan's identifiable assets and liabilities was 21,200,000, Moon acquired a 65% interest in The Homer Company for P300,000 when the fair value of Homer's identifiable assets and liabilities was P640,000. Moon measures non-controlling interests at the relevant share of the identifiabte net assets at the acquisition date, Neither Swan nor Honer had any contingent liabilities at the acquisition date and the above fair values were the same as the carrying amounts in their financial stavement: Annual impairment reviews have not resulted in any impairment losses being recognized. Under PFRS 3 Business combinations, what figures in respect of goodwill and © gains on bargain purchases should be included in Moon's consolidated statement of financial position? A, Goodwill: P580,000; Gains on the bargain purchases: P2116, 000 B. Goodwill: Wil Or zero: Gains on the bargain purchases: P116,000 G. Goodwill: Nil or zero; Gains on the bargain purchases: Nil or zero D. Goodwill: P580,000; Gains on the bargain purchase. 2O-A, By and © are partners in an accounting firm. Their capital account balances at year-end were A, P90,000; B, P110,000 and C, 50,000. They share profits and losses on a 4:4:2, after the following special terms: 1. Partner C is to receive a bonus of 10k of net income after the bonus. 2. Interest of 10% shall be paid on that portion of a partners capital in excass of P100, 000. 3. Saiaries of $10,000 and 712,000 shall be paid to partners A & C, respectively. Nil or zero. Assuming a net income of P44,000 for the year, the total profit share of partner C wast A. B 7,800 / Se P28, 400 8. P16, 800 D. P19, 800 & Items 31 and 32 are based on the following information: ‘The income statement submitted by the Pampanga Branch to the Home Office for the month of Docenber, 2010 is shown below. After effecting the necessary adjustments the true net income of the Branch was ascertained to be P156,000. $108 ann ment P 600,090 Cost of sales: Inventory, December Levnn Shipments’ from Home Of £1 Cem Local purchases, Total available for sale. Inventory, December 3bemn 360,000 oom APG ne Feeg, 000 Operating’ expenses 2 120,000 Net income 60,000 eee (01/2010 12/31/2010 a ed Te,000* te.008 Merchandise from hone office. Local PUFChases im Total = meme P80, 009 BLOG. 900 Bi. The billing price based on cost imposed by the hone office to the branch, and aK. 1408 c. 408 7B, 1009 5. 298 Ze! °. % e balance of allowance for overvaluation of branch December 31, 2008 atter 2 a2. The bal, e ee ‘The par Sin e, #100 P24, 000 D! None of the above ey pertagio, ae which time the partners were sharing profits and losses 40%FY ReSA: The Review School of Accountancy Page 7 of 12 ets Uabiliciaa & Capital ao P 8,800 accounts payable P 32,400 vabie 22,400 M, capital P31, 000 Inventory 39,400 My drawing 5,400 25,600 Equipment P65, 200 N, capital 533,200 Accumalated My, deawing Depreciation 30,800 _ 34,400, toan Total Bio: Tolal paring the month of July, the partners collected P600 ef the receivables with ro cas. The partners also sold during the month the entire inventory on which they realized 4 total of P32, 460. How much of the cash was paid to M's capital on July 31, 20107 BPS oo ce e830 mw yp Be Boro DoF 8 J7*- Fotiowing data portain Lo Maltiain Company yhich sella apptiances on an (7 instalment. basis: — 20) ipstalinent “sales 7480, 005) Cost of sales 238, 000. wr Theta tment” accounts” 7 Tuceivable balances: 2010 January 1, 2010 Decenber 31, 2010 CELUI Repossessions on defaulted accounts were made during 2010, @s follows: From Sales Made in: 2070 [Besoint baiance Net resale value of repossessed merchandise The total realized gross profit in (2010 da the collections of 2008, 2009, and 2010 sales was: a 5) 360 c. © 96,600 3. pez, 000 bier 300 B35. te net gain (oma) on repossession on defaulted salen of 2008 and 2008 vas: Re p's00 ere boo BE bieoo) B: Pan, 300) {\, 36) Pasig Garment Company operates a branch in Cabanatuan City. At the end of hat year, the Branch account in the books ‘of the home office al Manila shows a Ealahea of #150, 000. the folloning iuformati on are saves asnnsy The hone office naw billed the brench the swoune OF Pic ay for the Serclontlee, whisn waa a tomnett on pecasbee SL bravech: 3. Supoties of Pe, 500 as retucned by the branch £9 the home office but. the hone office hae not yet Teflocted an ite eecords te Tetbaee he supplies. ne branch made profit of P10,100 or the month of Decenbor but the hone fhe branch has not received ine'eash in the anount of £25,000 sent ty Tat i the bolance of the Home Office aecoun" on the books of the branch aa OF Decanbor 91, beaters sajuetmente a pi9i, 820 c. vtta,az0 8. 123,000 pf woes a70 Q} 27 vsing tho sane information in No, 36, what 4s the adjusted balance of the Feciprocel accounts? ip be, 420 c, e117, 420 B. P106, 920 B. P5729, 920 DD 96. me carty company ome To of The Salley Gapany. The foliowing tigue are from thei separate financial statements: Carty: Trade recoivaplan 72,040,000, including 0,000 due from Hat ie Halley: rade ‘receivables £215,000," Sncluding P40. 00 oss, teag sforo As PRACTICAL ACCOUNTING 2 - FINAL PRE-BOARD EXAMINATION (BATCH DOT |h >» 42. ee | Page 8 of 12 Recording to PAS 27 Consolidated and separate financial statements, what gure should appear for trade receivables in Carly's consolidated st of financial position? roe aha et Be P500,000. Pulley's (éiirrent statement financial position shows share capital of 100,001 of Pl, 400,000. 2 revaluation reserve of P400,000 and retained earnings 00 Under PAS 27 Consolidated and separate financial statements, what figure in kespect of Pulley's retained earnings should be included in the consolidated statement of financial position?” EX. P 720,000 c. P2,040, 000 B. P21, 440,000 D. Pi, 520,000 +The Snipes Company owns 65% of The Genie Company. On the last day of the accounting period Genie sold to Snipes a non-current asset for 200,000. The asset originally cost 500,000 and at the end of the reporting period its earrying amount in Genie's books was 160,000. The group's consolidated statement of financial position has been drafted without any adjustments in relation to this non-current asset. Under PAS27 Consolidated and separate financial statements, 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. Increase by P30U, 000 Increase by P195,000 B. Reduce by P40, 000 Reduce by 26,000 C. Reduce by P40, 000 Reduce by P40,000 B. Increase by P300,000 Increase by P309, 000 Bonifacio contractors had a 3-year construction contract in 2012 for 900,000. The company uses the percentage-of-completion method for financial statemént purposes. Income to be recognized each year is based on the ratio of cost incurred to total estimated cost to complete the contract. Data on this contract follows: bin Accounts receivable - construction contract billings P 30,000 Fes Construction in ProgeesS inn eninnenee® 93, 750 op

mi 1iion. B. Coat of plant P1.5 million, exchange loss P0.6 million, trade payable 12 million. Cost of plant, P1,5 million, exchange loss PO.5 million, trade payante P2 million. b. Cost of plant P2 million, exchange loss PO.5 militon, trade payable PZ mative 48, An entity acquired al} the share capi 7 9 miltion b. £4 foreign entity at a consideration of ton dune 30, 7003, The fair valae of the pet assets of the Loretga entity a that date wag 6 miiiion babt, The functional currency of the emlity te oe The pose. ‘The financial year-end of the entity Us december !t, 200, the exchange rates at June 30, 2009, and tecenber 31, 200%, wore 1. baht « Fi and Z baht > EL sespectively: a that flgure, for geodull) should be, tn Wat ended December 3, 20087 Rr py mi iden LY mit on Br 3 mlldion ban secrete) Ain the Cnanedaa ennnts for ube DaSeerspnne nanan ern Nunn ee nae PRACTICAL ACCOUNTING 2 - FINAL PRE-BOARD EXAMINATION (BATCH 27) gt& ReSA: The Review School of Accountancy Page 10 of 12 JO Bo entity scguired: 608 of ene ah share capital of foreign entity n dune 30, 6 tition baht. "This value was 1:2 million nighse than the gastying oenat ee the ‘ot asaote of the foreign entity. the caters wont cue Geamanan meant OE ble land. The functional currency of. the entity is the dot the "entity ts Deceaser Sie 2015, ahs omehanoe Fates at June 30, 2012, and December 31, 2012, were 5 baht = Pi and 2 baht = PL, respectively 2 What figure for the fair velue adjustments should be included in the group financial statements for the year ended Decenber 31, 20127 A. 609,000 . P2 million B. 800, 000, D. P3 million # Teens 51 and 52 are based on the following information: Forward rate bats Spot Rate (for 3/31/2010) December 1, 2009 7.0035 0034 (4 montns} December 31, 2009 0033 10032 (3 month) March 31, 2010 70038 w/a MNC’s incremental borrowing rate is 12 percent. The present value factor for three months at an annual rate of interest of 12 percent (1 percent per month) is 0.9706 SL. Assuming that NNC entered inta no forward contract, how mich foreign exchange gain or loss should it report on its 2009 inconé statement with regard to this transaction? ‘A. P5,000 gain c. P2,000 loss B. 3,000 gain D. P1,000 loss Dy 52. assuming that HNC entered into a forward contract to sell 10 million foreign currencies on Decenber 1, 7009, as a fair value hedge of a foreign currency receivable, what is the net impact on its net income in 2003 resulting from a fluctuation in the value of the foreign currencies? ‘A. No impact on net income. B. P59.80 dacrease in net income. C1 P2,000 decrease in net incone. D. P1,941.20 increase in net income. A |. Post, Inc. had a receivable from a foreign customer that is payable in the = customer's local currency. On December 31, 2010, Post correctly included this Geceivabie for 200,000 local currency units (ict) in its balance sheet at 210,000. When Post collected the receivable on february 15, 201]; the Phitippine peso equivalent vas 95,000. In Post's 2011 consolidated incone Eratowent, how much should it report’ aa a foreign exchange loss? ae TE. P15, 000 B. P10, 000 3: 25, 000 "> 84. Grete had the following foreign currency transactions during 2010: 4 7 | purchased merchandise fron a foreign supplier on January 20, 2010, for the Philippine peso equivalent of #60,000 and paid the invoice on April 20, 2010, at tae Philippine peso equivalent of 768,090. © on. Septenber 1, 2010, borrowed the Philippine peso, equivatent of P300,000 evidenced by a note that is payable in ‘the lender's local Gurrency on September 1, 2011; On Decenber 31, 2010, the Philippine peso Gquivaient of the principal amount wae P320,000. In Grete’s 2010 incone statement, what amount shovld be included as a forelon exchange los? enc a. P 4,000 , P22, 3. 220,000 Fh 228,000 A ospital has the following account balances: (357 nee enue fron newsstand ® 50,000, - Amount charged to patients 800,000 Interest incone 30,0007 ReSA: The Review Schoo! of Accountancy Salary expen si eon Sataey expense © mrses (20,e00y 19, 000; Undessgnated gifts 80, 000% Contractual adjustments 110, 000% What is the hgspital's net patient service revenue? A. 880, 000 FF 690, 060 680, 00, wo Run was to pay a franchise fee of P100, 000 payable in ive equal. inetallacnts starting’ with the payment upon signing of tho agrooment. the tzanchiess mes to pay monthly 14 of gross sales of the preceding month. Should the operation Of the outlet prove Lo be unprofitable, the franchise may be cancelied wich Whatever obligation owing to Pista Hut, in connection with the b100;000 franchise fee, woived, Giro be Elest year’s operation generated a gross sales of PS08/000. for the first year, Pista Hut earned franchise fee a a n. 'P 5, 000 ©. 25,000 8. P20,000 LD. P1057 000 A Items 57 and 58 are based on the following information Kuchen Manafacturing uses packilush costing to account fer an elactronic meter it makes. During August 2011, the Lism produced 16,000 meters of which it sold 15,800. The standard cost for each meter ist Dirnct material P20 Conversion costs a Total Bea Assume that the company had no inventory on Auguat 1, The following event, took plare in August 1. Purchased P320, 000 of direct materials. 2. Incurred P708,000 of conversion costs 3. Applied P704, 000 of conversion costs to Raw and In Process Inventory. 4. Finished 16,000 movers. 5. Sold 15,800 meters for £100 each. he h amount of ending finished goods | Nil or zero go: P22, 800 P12, 775 B. P12, 350 The amount of cost of goods sold after the adjustments of over-under applied eonversion cost amounted to A. F1,011,200 P1,022,000 BL 1,015,200 D. P1,024,000 89,/Rgency 07 received a request for replenishment of petty cash fund for the “following expenses: 2 » B Serica siggline’ aE Peanspittar ioe Taras i Hepat of alreon ou aan i feo she entry for thle Cransncklon wouTa Bet fh Mo entry B. Memorandum entry to the RAOMO “C. Office supplies exDENSC.u nen n— 500 Travel Ling @XPENSC a mnmww oF Yoo Repairs and maintenance nm oon 200 Other maintenance and operating expenves, 160 cash - National Treasury, MDS, 260 D. Office Supplies @xPANSC reneramnnnnna 500 Travelling expense. ea 400 Repairs and maintenance -wnnm J 200 Other maintenance and operating expenses... 160 Petty Cash Pundeennnmnnr rian 7 960 60: X and ¥ Inc. owes the Xylo Corporation P60,000 on account, which is secured by account receivable with a book value of P50,000. The unsecured portion is considered a claim under the bankruplcy law, X and ¥ hag filed. for bankruptcy. Its statement of aflairs lists the accounts receivable soruring the Xylo account with an estimated realizable value of P45,000. if the Gividend to general unsecured creditors is BOX how much can %ylo expect to Feceived? P60, 000 FE ¥92,000 3: P58,090 D. sa, 000 panama menecsieiiieirianis —_ReSA: The Review School of Accountancy mi Page 12 of 12 t + Somely Company manufactures three products, R, 8, and T, ins Joint process, Fox 7" evary!10 ‘eiion of cow materiel input, the output is 3 kilos of ke Peis gees and 2 kilos of T. og % During August, 50,000 kitos of raw materia coiting 2120,000 were processes and completed, with joint conversion costs of 200,000. Conversion cate seer ee allocated’ to the production on the basis of market values, To make the product salable, however, further processing which does not require additional material was done atthe following costs! Re -PS0,000) &, Pa), ONt ed , 30,000. unit selling prices are R, Pl0r 8. Pidy and, 19, The unit cost of product R ist BP TA2 c. P10.00 B. P 8.00 D. P2532 Ds. clark rexeites company manufactures various ood products that yield sawdust és a by-product. The only costs associated with the saudust are selling costs of Pe per ton sold. The conpany accounts for sales of sawdust by deducting saudust's het cealizable value from the najor product's cost of qoods sold. Saudust sales in 2010 were 12,000 tons at PAO each. If Clark Textiles changes its method of accounting for sawdust sales to show the net realizable value ao other revenue (presented at the bottom of the income statement), how would its gross masgin and net income be affected? AL “No “None 5. esos, abn secrease 08,000 decrease A, Ty. “tn atte, nso conrtrsction company was contfacted to puild Viltage company’s completed in two years and the contract provided for: (2) 58 mobilization fee (to be deducted from the Last billing! paysble within 1S days after the signing of the contract (2) 108 retention provision on ail billings, and (3) Payment of progress billings within 10 days from acceptance. AID, which uses the percentage-of-completion method ef accounting, estinated a 25% gross margin on the project. ay the end of 2014, AdD has presented progress billings corresponding to 503 complesicn. All of the progress billings presented An 2014 were accepted, except the last one for 10% which was accepted on January 5, 2015. With the exception of one bill for @t which was due on January 7, 2018, ali of the billings accepted in 2015 were settled. Payments made by Village Company in 2015 arounted to: A, 233,800,000 cc. P49,000, 000 8 38,590, 000 D. p45, 000/000 on September 30, 2014, Jaya Inc. was awarded to contract to build a 1,000-room hotel tor P120 million. Among others, the parties agreed to the following: 1. Ten percent mobilization fee (deductible from "final billing”) payable within 3 ten days from the signing of the contracts 2. Retention of ten percent on all billings. (to be paid within the final billing ‘ypos completion and acceptance of the project}: and 3. Progress billangs aro to be paid within 2 weeks upon acceptance, By the ond of 2014, the company had prosented one progress billing, corresponding 10% completion, which was evaluated and accepted by the cliont ‘sn peceaker 23° 2014 for payment in January of next year. In 2014, Percentage-of-completion method of accounting, Saja Tne, assuming use of the received cash a total fee of: a, P 1,200,000 c. P12, 000,000 B. 11/a80, 000 D. 13,200,000 Co Peeps shentent cmpary manatareres sige petncce tap and Vimy and ¢ by-proaie, DO ee ota toe Mallgred tS bie Seite pesiens bp ae tastes Sake atts, ratidere “Earlier ‘Protinodag” coeig ay “hatte trmne, vale eathed, icdatine Jetat coves ‘to the by-product, ‘the aarkersauiny, beretions, For lod Un aed), the’ tree, manabacticleg Sones: ga Gsogh maltg eee aa oOee dueing the quarter, Production and cost data follow: A Pep Vim zest Units produced 5,000 4,000 1,000 Sales price per unit P50 oS Further processing cost per unit 20 Selling and administrative expense per unit > Operating profit per unit 2 > 1 Pn sila of trae etm canted fon in Joleen ag weston q7e,008 | /B. b5i900 D. tere ad P46. Gsina ee sane ingormation’ in. Wo,. 65; compute the gross profit. fox op ae *D 2. ? 90,000 B P70,000 Pr. P190,000 PRACTICAL ACCOUNTING 2 - FINAL PRE-BOARD EXAMINATION (BATCH 27) 2 kw