RgSA: The Rryia Sdrol of Accountancy Page 10 of 25

43. What is the correct carrying value of raw-materials inventories?

a.725,AAA b. 708,000 c.728,OOO d. 698,000

44" Assuming direct write-off method is used to account for inventory write-down,.how much
should be recognized in the profit/loss as a result of the lower of cost or net realizable value
valuation of inventories?
a. 201,0o0 b. 206,000 c. 210,000 d. 216,000
45. Assuming allowance method and the following allowance for inventory write-down existed at
the beginning of the year (FG - P60,OO0; WIP - PTO.OOO; RM - O), how much should be '
recognized in the profit/loss as a result of the lower of cost or net realizable value valuation of
inventories?
a. 107,000 b. 86,000 c. 138,000 d. L45,o0o

PIRQ.ELEM 15:
You observed the inventory count of the Solsons Company as of December 31, 2AL4. The client
prepared the summary presented below and gave it to you for verification.

Quantity Cost NRV Amount

A 360 units P3.60/dozen P3.64/dozen P1,31O.40
B 24 units 4.70 each 4.80 each 112.80
C 28 units 16.50 each 16.50 each 1,353.00
D 43 units 5.15 each 5.20 each 176.80
e 4OO units 9.10 each 8.10 each 3,640.00
F 7O dozens 2.00 each 2.00 each 140.00
G 95 grosses t44.OO per gross 132.00 per gross . 13,780.00

46. How much should the inventory be presented in the 2014 balance sheet?
a. 18,364.25. c. 20,513.20.
b. 19,604.25. d. 20,315.00.

PR,OBLEII 15:
In the couree of your audit of DKf{Y Company3'Receivables- acount as of December 31, 2014, you
found out that the account cornprised the following itemsl

Trade accounts receivable P1,550,000

Trade accounts receivable, assigned (proceeds from assignment
amounted to P650,000) - 75O,OO0
Trade accounts receivable, factored (proceeds from factoring done on
a without-recourse basis anrounted to P250,000 30o,0oo
l2o/o Trade notes receivable 200,000
2Aa/o Trade notes receivable, discounted at 4oo/o upon receipt
of the 180-day note on a without recourse basis 300,o00
Trade receivables rendered worthless 50,000
Installments receivable, normally due 1 year to two years 600,000
Customers' accounts reporting credit balances
arising from sales rdturns 60,000
Advance payments for purchase of merchandise 300,000
Customers' accounts reporting credit balances arising
from advance payments 40,000
Cash advances to subsidiary 8O0,0oo
Claim from insurance company 30,000
Sr"rbscription receivable due in 60 days, 600,000
Accrued interest receivable 20,000
Deposit on contract bids 500,000
Advances to stockholders (collectibte in 2AU) 2,000.000
Requirements:
47. How much is the total trade receivables?
a. 3,650,000 c. 3,000,000
b. 3,100,000 d. 2,950,000
''18, How much is the amount to be presented as "trade and other receivables" under current
assets?
a.
7,350,000 c. 4,850,000
b.
5,350,000 d. 4,050,000
4t9. How much loss from receivable financing should be recognized in the income statements?
a.36,000 c. 86,OOO