Question 1:

Ivonne Inc., a Philippine Corporation, purchased an inventory items from a supplier in

Japan on November 5, 2030, for 100,000 yen, when the spot rate was P0.4295. At
Ivonne’s December 31, 2030, the spot rate was P0.4245. On January 15, 2031, Ivonne
bought 100,000 yen at the spot rate of P0.4345 and paid the invoice. How much should
Ivonne report as part of net income for 2030 and 2031 as foreign exchange transaction
gain or loss?
A. Year 2030, 0; Year 2031, (500)
A. Year 2030, (1,000); Year 2031, 500
A. Year 2030, 500; Year 2031, (1,000)
A. Year 2030, (500); Year 2031, 0

Question 2:
The statement of financial position of KPR Partnership shows the following information
as of December 31, 2020:
Cash 360,000 Liabilities 900,000
Non-Cash Assets 5,040,00 K, loan 450,000
0
K, capital 2,250,000
P, capital 1,260,000
R, capital 540,000
Total 5,400,00 Total 5,400,000
0
The profit and loss ratio is 3:2:1 for K, P and R respectively. The non-cash assets were
realized as follows:
Cash Realized Book Value
January 1,080,000 1,620,000
February 630,000 1,386,000
March 2,250,000 2,034,000
The cash is distributed to partners as it becomes available. How much is the total loss
absorbed by partner K?
A. P420,000
B. P180,000
C. P360,000
D. P540,000

Question 3:
The following balances as of the end of 2020 for the partnership of D, F and L, together
with their respective profit and loss ratio, were as follows:
Assets 1,170,000 D, loan 58,500
D, capital (20%) 273,000
F, capital (20%) 253,500
L, capital (60%) 585,000
D decided to withdraw from the partnership. The partners agreed to revalue the assets
to their fair market value of P1,404,000 as of December 31, 2020. Partner D will be
paid P397,800 for D’s total interest in the partnership. After the retirement of D, what is
the capital balance of F?
A. P280,800
B. P295,425
C. P300,300
D. P253,500

Question 4:
The following partial transactions took place between the home office and its two
branches, Bacolod Branch and Cebu Branch.
a. Upon the instruction of the home office, Cebu Branch affected a fund transfer of
P25,000 to Bacolod Branch. Bacolod Branch collected a Cebu Branch’s account
receivable of P35,000 less 2% discount.
b. Cebu Branch paid P250,000 representing the traveling expenses of Mr. Jay
Ayala, a senior Vice-president, when the latter attended the regional conference
in Canada. Of the amount paid, 60% was charged to the home office, 25% to
Bacolod Branch and the balance to Cebu Branch.
c. Home office shipped merchandise costing P200,000 to Cebu Branch. Freight of
P3,000 was paid by the home office. It is the policy of the company to bill its
branches at 25% above cost.
d. Upon the instruction of the home office, Cebu reshipped the above merchandise
to Bacolod Branch. Had the goods been shipped directly to Bacolod Branch, the
freight would have been only P4,200.
What is the balance of the Investment in Cebu Branch in the home office books?
A. P520,000
B. P524,800
C. P271,800
D. P527,800

Question 50:
What is the balance of the Home Office in the books of Bacolod branch?
A. P378,700
B. P370,300
C. P374,500
D. P312,000

Question 5:
Josh, Ivan and DJ are partners in a business and share its earnings at the ratio of 5:3:2,
respectively. At the beginning of the fiscal year, they admit Vonne, who is to invest in
the firm sufficient cash to give her a 1/3 interest in the capital and profits of the firm.
The following closing balances are taken from the old firms books:

Cash 200,000
Marketable securities 150,000
Accounts Receivable 450,000
Accounts Payable 100,000
Loans payable-bank 60,000
Josh, capital 350,000
Ivan, capital 200,000
DJ, capital 90,000

Total 800,000 800,000

The securities have market value of P100,000 and an allowance of P50,000 is required
to cover bad debts. No other adjustment of the net assets is necessary, but the three
old partners must, among themselves, bring the balances of their capital accounts into
agreement with their interest in the profits. What settlement must be made among the
partners?
A. Ivan pays DJ P8,000
B. Josh receives from DJ P38,000
C. Josh received from Ivan P30,000
D. DJ pays Josh P30,000

Question 6:
On January 2, 2020 Vista Corp enters into a contract with a customer for the
construction of building. The contract price is P30,000,000. The parties also agreed
that, when the building is complete, it will be inspected and assigned a green building
certification level. If the building achieves the certification level specified in the contract,
Vista will be entitled to an incentive payment of P2,500,000. Vista uses the percentage
of completion method in measuring its progress on the contract. At contract inception,
the entity cannot conclude that it is highly probable that a significant reversal in the
amount of cumulative revenue recognized will not occur with respect to the inclusion of
the incentive payment to contract price due to bad weather conditions, it does not
expect that it can finish the building on time for it to be entitled to the incentive
payments. The estimated costs to complete in year 2020 are P12,000,000. As of
December 31, 2020, it incurs total costs of P6,750,000. In 2018, it incurs total costs of
P11,300,000. Due to good weather conditions, it now expect that it can finish the
building on time for it to be entitled to the incentive payments. It expects that it is highly
probable that a significant reversal in the amount of cumulative revenue recognized will
not occur when the uncertainty associated with the variable consideration is
subsequently resolved. The estimated costs to complete as of the end of 2020 are
P950,000. What is the total realized gross profit for year 2018?
A. P13,500,000
B. P16,874,000
C. P8,775,000
D. P12,825,000

Question 33:
What is the total realized gross profit for year 2020?
A. P11,250,000
B. P-0-
C. P4,050,000
D. P3,375,000

Question 7:
On November 19, 2022, Risk Company, a Philippine Company ordered merchandise
from Wales Company for 31,800 pounds. The merchandise was delivered on
December 18, 2022, the shipping date (FOB shipping point). Risk Company paid the
invoice on January 28, 2023.
The spot rates for a pound on the respective dates were:
November 19, 2022 P76.90
December 2, 2022 P76.15
December 18, 2022 P75.75
December 31, 2022 P72.35
January 28, 2023 P73.15
What amount will affect profit or loss in 2022?
A. P144,690 gain
B. P25,440 loss
C. P120,840 gain
D. P108,120 gain

Question 8:
Orocan Inc. consigned 12 cabinets, which costs P960 each, to SM Store, which was to
sell it for a 15% commission based on selling price. Orocan Inc. paid freight cost
amounting P240 and reimbursed SM Store P250 for its delivery to customers. On
August 30, 2030, SM Store reported that it had sold 8 cabinets, 6 for cash at P1,800
and 2 for credit basis at P2,160 of which it had collected 20% as down payment. How
much is the amount remitted by SM Store to Orocan Inc?
A. P9,396
B. P9,146
C. P11,664
D. P9,229

Question 9:
GV Company purchased 70% ownership of DL Company on January 1, 2020, at
underlying book value. While each company has its own sales forces and independent
product lines, there are substantial inter corporate sales of inventory each period. The
following inter-corporate sales occurred during 2021 and 2022:
Year Seller Cost of Product Buye Sales Unsold at Year Sold to
Sold r Price Year-end Outsider
202 GV 448,000 DL 640,000 140,000 2022
1
202 DL 312,000 GV 480,000 77,000 2023
2
202 GV 350,000 DL 437,500 63,000 2023
2
The following data summarized the results of their financial operations for the year
ended, December 31, 2022:
GV DL Company
Company
Sales 3,850,000 1,680,000
Gross Profit 1,904,000 504,000
Operating Expenses 770,000 280,000
Ending Inventories 336,000 280,000
Dividend Received from affiliate 126,000 -0-
Dividend Received from Non- 70,000
Affiliate
For the year ended 2022, how much is the consolidated net income attributable to
parent’s shareholders equity and non-controlling interest in net income?
A. P1,350,335; P80,115
B. P1,301,335; P59,115
C. P1,476,335; P59,115
D. P1,476,335; P80,115

Question 56:
For the year ended 2022, how much is the consolidated sales and consolidated cost of
goods sold?
A. P4,612,500; P2,202,050
B. P5,530,000; P2,202,050
C. P4,612,500; P2,475,550
D. P4,612,500; P2,206,950

Question 10:
Chen Corp. uses the cost to cost method to account for its construction contracts. The
contract price of the project is P1,800,000. Chen Corp estimates that it will take 36
months to complete the contract. The following information for its construction contract
is presented below:
2018 2019 2020
Cost Incurred to date P400,000 P1,260,000 unknown
Realized Gross P50,000 P310,000 P80,000
Profit
What is the total estimated cost to complete in 2020?
A. P140,000
B. P1,660,000
C. P1,400,000
D. P1,360,000

What is the percentage of completion rate in year 2018?

A. 20%
B. 30%
C. 32%
D. 25%
Question 11:.

On January 1, 2020, Papa sold equipment with book value P80,000 and a 10-year
remaining life to its wholly owned subsidiary, Mama for P120,000. Both entities use the
straight-line method of depreciation. On December 31, 2020, the separate company
financial statement of the entities shows the following balances:
Books of Mama Books of Papa
Depreciation expense 12,000 Gain on Sale of 40,000
Equipment
Equipment 120,00
0
Accumulated 12,000
Depreciation
What working paper elimination entry to consolidate financial statements on December
31, 2020 should be included?
A. Debit to Equipment for P40,000
B. Debit to accumulated depreciation for P4,000
C. Credit to gain on sale of equipment for P40,000
D. Credit to depreciation expense for P12,000

Question 12:
Frank, Chito and Dale, formed a partnership on January 1, 2020, with each partner
contributing P600,000 cash. The partnership agreement provided that Dale receives a
salary of P30,000 per month for managing the partnership business. Dale has never
withdrawn any money from the partnership. Frank withdrew P120,000 in each of the
years 2020 and 2021, and Chito invested an additional P240,000 in 2020 and withdrew
P240,000 during 2021. Due to an oversight, the partnership has not maintained formal
accounting records, but the following data as of December 31, 2021 is available.

Cash P855,000
Accounts payable P70,000
Accounts receivable 600,000
Notes payable 315,000
Merchandise inventory 1,200,000
Computer equipment, net 1,110,000
Prepaid expenses 120,000
Total P3,885,000 P885,000
Additional data:
1. The partners agree that income for 2021 was about half of the total income for
the first two years of operations.
2. The partnership agreement provides that profits, after allowance for Dale’s
salary, are to be divided each year on the basis of the beginning of the year
capital balances.
How much is the share in profit/loss of Dale for year 2020?
A. P240,000
B. P507,273
C. P120,000
D. P480,000

Question 44:
For the year 2020, how much is the ending capital balance of Chito?
A. P2,640,000
B. P1,080,000
C. P600,000
D. P960,000

Question 13:
A Manila Company maintains several branches that market the products that it
produces. Merchandise is billed to the branches at cost, the branches paying freight
charges from the home office to the branch. On November 15, 2013, Branch No. 1
ships parts of its stock to Branch No. 3 upon authorization of the home office.
Originally, Branch No. 1 had been billed for this merchandise at P16,000 and had paid
freight charges on the shipment from the home office of P3,500. Branch No. 3 upon
receiving the merchandise, pays freight charges on the shipment from Branch No. 1 of
P2,500. If the shipment had been made from the home office directly to Branch No. 3,
the freight cost to Branch No. 3 would have been P4,000. What is the entry of the home
office record the excess freight due to inter-branch transfer?

A. Shipment to Branch-No. 3 17,500

Excess freight 2,000
Shipment to Branch-No. 1 19,500

B. Investment in Branch-No. 3 17,500

Excess freight 2,000
Investment in Branch No. 1 19,500

C. Shipment to Branch-No. 3 17,500

Shipment to Branch-No. 1 17,500

D. Investment in Branch-No. 3 16,000

Investment in Branch-No. 1 16,000

Question 14:
The following data pertain to installment sales of Ladines Incorporated:
Down payment 20%
Installment sales in year 1 P545,000
Installment sales in year 2 P785,000
Installment sales in year 3 P968,000
Mark up on cost 35%
Collection after down payment are:
40% during the year of sale
35% during the year after
25% on third year
What is the realized gross profit for year 1?
A. P109,387
B. P114,825
C. P73,474
D. P148,112

Question 15:
Rondel Corp produces special kind of insecticides. Materials are added at the end of
the production of Fabricating Dept. for the month of March 2018, the following data were
gathered:
Work in Process, March 1 60%
Work to be done as to conversions cost 80,000
Started in Process during the month 200,000
Transferred to Finishing Dept. 170,000
Lost units in processing 20,000
Work in Process, March 31 60% 90,000
complete as to conversion cost
The costs corresponding to the lost units were absorbed by the remaining units.
Which of the following is incorrect?
A. The EUP of conversion cost under FIFO method totaled 192,000
B. The EUP of conversion cost under FIFO is less than 48,000 compared to Average
C. The EUP of work in process end materials under average method is equal to FIFO
method
D. The EUP of materials under FIFO and Average are the same

Question 16:
On August 1, 2016, Love Construction Corp. began constructing a P1,750,000 contract.
As of year-end, the following are relevant information provided by the corp.:
2016 2017 2018
Construction in Progress P367,500 P1,124,375 (unknown)
Estimated costs to P1,333,125 P625,625
complete
Costs Incurred P354,375 P807,500 P563,125
What is the RGP in 2018 using the zero profit method?
A. P48,625
B. P-0-
C. P50,625
D. P62,500

Question 17:
Mike Co., a Philippine corporation, sold inventory on December 1, 2030, with payment
of 32,500 British pounds to be received in sixty days. The pertinent exchange rates
were as follows:
Date Spot rate
 December 1, 2030 P1.7241
December 31, P1.8182
2030
January 30, 2031 P1.66665
For what amount should Sales be credited on December 1?
A. P18,850
B. P59,091.50
C. P17,875
D. P56,033.25

Question 18:
On January 1, 2022, Rey Company purchased 80% of the stocks of Beth Corporation at
book value. The stockholders’ equity of Beth Corporation on this date showed:
Common stock P1,140,000 and Retained earnings P980,000.
 On April 30, 2022, Rey Company acquires a used machinery for P168,000 from
Beth Corp. that was being carried in the latter’s books at P210,000. The asset
still has a remaining useful life of 5 years.
 On the other hand, on August 31, 2022, Beth Corp. purchased an equipment that
was already 20% depreciated from Rey Co. for P690,000. The original cost of
this equipment was P750,000 and had a remaining life of 8 years.
 Net income of Rey Co. and Beth Corp, for 2022 amounted to P720,000 and
P310,000. Dividends paid totaled to P230,000 and P105,000 for Rey Co. and
Beth Corp., respectively.
On the consolidated financial statements in 2022, how much would be the Net income
attributable to parent’s shareholders’ equity and non-controlling interest net income?
A. P826,870; P69,280
B. P834,150; P69,280
C. P834,150; P62,000
D. P826,870; P62,000

Question 19:
Tiger, Inc. owns a branch in Bicol. As of the end of the current year, the home has an
Investment in Bicol Branch account with a P77,000 debit balance. At the same time,
the branch is reporting a Home Office account with a P61,000 credit balance. An
investigation uncovers the following:
1. During the year, the home office shipped merchandise costing P16,000 to the
branch at a billed price of P28,000. The branch accidentally recorded the
shipment as P38,000.
2. At year’s end, the home office assigned P14,000 in expenses to the branch, the
branch recorded this allocation as P19,000.
3. Also, at year’s end, the branch transferred P31,000 in cash to the home office.
The office has not yet recorded this money.
What is the reconciled balance of the reciprocal accounts?
A. P77,000
B. P46,500
C. P46,000
D. P53,000

Question 20:
The following data were taken from the statement of realization and liquidation of
Mendoza Corp. for the quarter ended September 30, 2021

Liabilities to be P285,000
liquidated
Supplementary charges 169,100
Liabilities not liquidated 210,000
Supplementary credits 192,500
Assets acquired 136,000
Liabilities liquidated 158,000
Assets to be realized 107,500
Assets realized 175,000
Liabilities assumed 83,000

The beginning capital balances of ordinary shares and retained earnings are P102,000
and P29,600, respectively. A net income of P87,400 for the period. How much is the
beginning balance of cash?

A. 209,100
B. 241,600
C. 293,000
D. 309,100

Question 21:
The following selected accounts appeared in the trial balance of Aquinde Corp. as of
December 31, 2031.
IAR-2030 30,000
IAR-2031 400,000
Inventory, December 31, 2030 140,000
Purchases 1,110,000
Repossession 6,000
Installment sales 850,000
Sales 770,000
DGP-2030 108,000
Additional information as of December 31, 2030:
IAR 2029 as of December 31, 2030 is P270,000.
Inventory of new and repossessed merchandise as of Dec. 31, 2031 is P190,000.
Gross profit percentage on regular sales during the year is 30%.
Repossession was made during the year.
It was 2030 sale and the corresponding uncollected account at the time of repossession
was P15,600.
How much is the total realized gross profit in 2031, net of loss on repossession?
A. P491,760
B. P487,320
C. P488,400
D. P402,000

Question 22:
On January 2, 2022, Police Company acquired 90%, of the outstanding shares of Son
Inc. at book value. During 2022 and 2023, intercompany sales amounted to P2,000,000
and P4,000,000, respectively.
Police Company consistently recognized a 25% mark-up based on cost while Son Inc,
had a 25% gross profit on sales. The inventories of the buying affiliate, which all came
from inter-company transactions shows:
December 31, 2022 December 31, 2023
Police P240,000 P160,000
Son 100,000 40,000
On October 1, 2022, Son Inc., purchased a piece of land costing P1,000,000 from
Police Company for P1,500,000.
On December 1, 2023, Son Inc., sold this land to unrelated party for P1,500,000.
On the other hand, on July 1, 2023, Son Inc., sold a used photocopier with carrying
value of P60,000 and remaining life of 3 years to Police Company for P42,000.
Separate Statement of Comprehensive Income for the two companies for the year 2023
follow:
Police Company Son Inc
Sales 25,000,000 14,000,000
Cost of Sales (15,000,000) (8,400,000)
Gross Profit 10,000,000 5,600,000
Operating Expenses (6,000,000) (3,800,000)
Operating Profit 4,000,000 1,800,000
Loss on Sale of Office (18,000)
Equipment
Dividend Revenue 40,000
Net income 4,000,000 1,822,000
Compute the following amounts for/as of December 31, 2023.
How much is the consolidated Net Income attributable to Parent?
A. P6,169,800
B. P6,191,300
C. P6,369,000
D. P6,183,300

Question 27:
Compute the following amounts for/as of December 31, 2023.
How much is the consolidated Operating Expense?
A. P9,788,000
B. P9,803,000
C. P9,800,000
D. P9,789,500
Question 39:
How much is the non-controlling interest in Net Income?
A. P188,200
B. P184,200
C. P185,700
D. P189,700

Question 57:
Compute the following amounts for/as of December 31, 2023, how much is the
Consolidated Gross Profit?
A. P19,632,000
B. P15,712,000
C. P15,632,000
D. P15,584,000

Question 23:
Tilman Textile Company has a single branch in Bulacan. On March 1, 2019, the home
office accounting records included an Allowance for Overvaluation of Inventories
Bulacan Branch ledger account with a credit balance of P32,000. During March,
merchandise costing P36,000 was shipped to the Bulacan Branch and billed at a price
representing a 40% markup on the billed price. On March 31, 2019, the branch
prepared an income statement indicating a net loss of P11,500 for March and ending
inventory at billed prices of P25,000. What is the amount of adjustment for Allowance
for Overvaluation of Inventories to reflect the true branch net income?
A. P46,000 debit
B. P39,257 debit
C. P39,333 debit
D. P46,000 credit

Question 24:
The Thomas Fabrication Plant had a fire at the beginning of 2019 and most of the
records for the year 2018 were lost. Some data for the year were located by the
accountants and are shown below.
Total manufacturing overhead estimated at the beginning of Php105,840
the year
Total direct labor costs estimated at the beginning of the year Php186,000
Total direct labor hours estimated at the beginning of the year 3,600 direct labor hrs
Actual manufacturing overhead costs for the year Php99,760
Actual direct labor costs for the year Php142,000
Actual direct labor costs for the year 2,950 direct labor
hours
The company bases its manufacturing overhead allocation on direct labor hours. What
was the predetermined manufacturing overhead allocation rate for 2018? (Please round
to the nearest cent.)
A. Php29.40
B. Php27.71
C. Php33.82
D. Php35.87

Question 25:
Michelle Inc. owns 90% of Belle’s ordinary share and 80% of Beth Co. ordinary share.
The remaining ordinary shares of Belle and Beth are owned by their respective
employees. Belle sells exclusively to Beth. Beth buys exclusively from Belle and Beth
sells exclusively to unrelated companies. The following are the selected information for
year 2020 for Belle and Beth:
Belle Beth
Sales 130,000 91,000
Cost of Goods Sold 100,000 65,000
Beginning Inventory -0- -0-
Ending Inventory -0- 65,000
What amount should be reported as gross profit in Belle and Beth’s combine income
statement for year ended December 31, 2020?
A. P47,800
B. P41,000
C. P26,000
D. P56,000

Question 26:
Henly Inc. purchased 90% of Flong Inc. ordinary shares. During 2020, Henly sold
inventory to Flong for P500,000 on the same terms as sales made to outside parties.
Flong sold all of the inventory purchased from Henly in 2020. The following information
is available to Henly and Flong Inc. sales for 2020:
Henly Flong
Sales 2,000,000 1,400,000
Cost of Sales (800,000) (700,000)
Gross Profit 1,200,000 700,000
What amount should Henly Inc. report as cost of goods sold in its 2020 consolidated
financial statement?
A. P1,000,000
B. P1,500,000
C. P860,000
D. P1,360,000

Question 28:
On January 2, 2020, Berny and Cyrus formed a partnership. Berny contributed capital
of 350,000 and Cyrus P50,000. They agreed to share profits and losses 80% and 20%
respectively. Cyrus is given a salary of P10,000 a month; interest of 5% of the
beginning capital of both partners and a bonus of 15% of net income before salary,
interest and bonus. The income statement of the partnership for the year ended
December 31, 2020 is as follows:
Revenue 1,750,000
COGS 1,400,000
 Gross Profit 350,000
Expenses (including partners salary, interest and 286,000
bonus)
Net Income 64,000
What is the amount of bonus to Cyrus in 2020?
A. P32,912
B. P41,400
C. P36,000
D. P26,800

Question 29:
A Statement of realization and liquidation has been prepared for the I Love You
Corporation. The totals are as follows:
Assets to be realized 60,000
Assets acquired 40,000
Assets realized 55,000
Liabilities to be 80,000
liquidated
Liabilities assumed 50,000
Liabilities not liquidated 65,000
Supplementary credits 110,000
Retained earnings decrease by P12,000. The ending balances of capital stock and
retained earnings are P100,000 and P(85,000), respectively.
How much was the beginning balance of cash?
A. P47,000
B. Not given
C. P20,000
D. P35,000

Question 30:
Saul Corporation uses a job-order costing system with a single plantwide predetermined
overhead rate based on machine-hours. The company based its predetermined
overhead rate for the current year on the following data:
Total machine-hours 10,000
Total fixed manufacturing overhead cost Php 35,000
Variable manufacturing overhead per machine- Php 2.20
hour

Recently, Job T369 was completed with the following characteristics:

Number of units in the 10
job
Total machine-hours 40
Direct materials Php 750
Direct labor cost Php 1,560
If the company marks up its unit product costs by 20% then the selling price for a unit in
Job T369 is closest to:
A. Php 277.20
B. Php 324.56
C. Php 304.56
D. Php 50.76

Question 31:
Paul acquired 90% ordinary shares of Sam Co. at book value on January 1, 2020. The
separate financial statements of the two entities are presented below:
Paul Sam
Sales 4,500,000 2,100,000
Cost of Goods Sold (3,000,000 (1,200,000)
)
Gross Profit 1,500,000 900,000
Operating Expense (900,000) (450,000)
Total 600,000 450,000
Dividend Income 324,000 -0-
Gain on Sale of Equipment 90,000 -0-
Total 1,014,000 450,000

On January 2, 2021, Paul sold an equipment to Sam with 10 years remaining useful life
at a gain of P90,000. Sam paid also a dividend amounting to P360,000 during 2021.
What is the consolidated net income attributable to controlling interest?
A. P1,026,000
B. P1,022,100
C. P1,014,000
D. P1,005,000

Question 36:
What is the amount of non-controlling interest in net income for 2021?
A. P45,000
B. P36,000
C. P36,900
D. P45,900

Question 32:
Paul Corp. entered into a forward contract to hedge a sale of inventory in October 26,
2030 to be collected on January 24, 2031. 72,000 FC (foreign currency) in 90 days.
The relevant exchange rates as follows:
Spot rate Forward rate (1/24/31)
October 26, 2030 P52.73 P52.77
December 31, P52.82 P52.89
2030
January 24, 2031 P52.94
What is the net forex gain (loss) from this transaction and hedge that will be reported on
Paul’s 2030 statement of income?
A. P6,480
B. P15,120
C. (P8,640)
D. (P2,160)

Question 34:
Roy Company manufactures product X in a two-stage production cycle in Department A
and B. Materials are added at the beginning of the process in Department B. Roy used
the weighted-average method. Conversion costs for Department B were 50% complete
as to the 6,000 units in the beginning work in process and 75% complete as to the
8,000 units in the ending work in process. 12,000 units were completed and transferred
out of Department B during February 2003. An analysis of the costs relating to work in
process (WIP) and production activity in Department B for February 2003 is as follows:

Cost
Transferred Materials Conversion
In
WIP, Feb 1: Cost P12,000 P2,500 P1,000
attached
Feb activity: Cost added 29,000 5,500 5,000

The total cost per equivalent unit transferred out for February 2003 of product X,
rounded to the nearest centavo, was
A. P2.82
B. P2.78
C. P2.75
D. P2.85

Question 35:
Jeremiah Manufacturing Company began business on January 1, 2018. During its first
year of operation, Jeremiah worked on 5 industrial jobs, and reported the following
information at year end:
Job 1 Job 2 Job 3 Job 4 Job 5
Direct Materials 1,000 7,500 4,000 3,500 1,500
Direct Labor 12,00 20,000 13,00 12,000 800
0 0
Applied Mfg. 1,500 6,000 2,500 7,500 200
Overhead
Job completed: Jun 30 Sep 1 Oct 15 Nov 1 Not
completed
Job sold: Jul 10 Sep 12 Not Not N/A
Sold Sold
Revenues: 25,00 39,000 N/A N/A N/A
0
Jeremiah’s allocation of overhead costs left a debit balance of Php1,200 in the
Manufacturing overhead account which was adjusted to zero at year-end. What was
the final balance in Cost of goods sold?
A. Php91,700
B. Php49,200
C. Php46,800
D. Php48,000

Question 37:
Irvin Corp sold handicrafts goods to a US firm for $100,000 in 2029. Pertinent
information on exchange rate follows:

Buying Selling
Sept. 4 Receipt of order 45.80 46.00
Oct. 15 Date of shipment 47.00 48.00
Dec. 31 Balance Sheet 47.20 48.50
Date
Jan. 6, 2030 Date of Settlement 46.00 47.00

The sale would appropriately recorded at:

A. P4,800,000
B. P4,600,000
C. P4,700,000
D. P4,580,000

Question 38:
Parent Co acquired 80% of the voting share capital of Subsidiary Co on September 1,
2021. The following information are from the individual income statements of the two
companies for the year ended August 31, 2032:
Parent Subsidiary
Sales 317,200 119,600
Cost of Goods Sold (219,960) (71,760)
Gross Profit 97,240 47,840
Parent Co had made sales to Subsidiary Co during the year of P20,000. Parent Co had
originally purchased the goods at a cost of P16,000. Half of these items remained in
inventory at the year end. What should be the consolidated revenue for the year ended
August 31, 2022?
A. P380,920
B. P436,800
C. P416,800
D. P420,800

Question 40:
Long Gone and Moved On partnership provided you with the following account
balances as of December 31, 2025:
 Assets Liabilities and Capital
Cash 390,000 Liabilities 310,000
Noncash 1,100,000 Loan from David 25,000
assets
Loan to Adam 10,000 David, Capital (20%) 450,000
Lee, Capital (20%) 325,000
Adam, Capital (60%) 390,000
Total 1,500,000 Total 1,500,000
On January 1, 2026, Lee decided to leave the partnership and he got paid 80 % of his
capital balance. After four months of attempt to carry on with the partnership, David and
Adam decided to enter into liquidation. A net loss amounting to 124,000 was realized.
In connection with this, 84,000 was the net cash inflow during the first four months of
2026 and the partnership’s liabilities increased by 40,000. Half of the noncash assets
were sold at a loss of 120,000. Liquidation expenses of 35,000 are expected to be
incurred in due course of liquidating the partnership. 275,000 of the total liabilities to
outside creditors were paid. Available cash was distributed to the partners. How much
is David’s total interest after the first cash distribution?
A. P125,250
B. P279,250
C. P255,250
D. P364,250

Question 41:
Jay, Jovs and Johnson are partners with an initial capital contribution of P3,071,250;
P1,551,225 and P1,055,275, respectively. The partners agreed to receive 10% interest
on their original capital contribution balances; salary allowances of P795,113 to Jay and
P537,063 to Johnson. The remainder shall be divided equally.
In 2020, the company had net income after allocating the allowances amounting to
P100,000. What is the increase (decrease) in the capital of Jay and Johnson?
A. P1,135,571 and P675,924
B. P502,254 and P42,607
C. P1,152,238 and P692,591
D. P202,263 and P(257,385)

Question 59:
Assuming the company had a net loss of P816,556 before interest and salaries to
partners. What is the increase (decrease) in the capital of Jay and Johnson?
A. P191,594 and P113,984
B. P196,736 and P(262,912)
C. P184,327 and P210,977
D. P(262,912) and P113,984

Question 42:
The Cruz Company is a dealer of air conditioners. For the period May 1, 2030, Cruz
Company gives a trade discount of 10% to all its buyers. On May 1, 2030, five units of
air conditioners with a total list price of P100,000 and total list price of P100,000 and
total cost of P59,800 were sold to Mr. Rusty. Cruz Company granted an allowance of
P10,000 for Mr. Rusty’s used air conditioner as trade-in, the Current market value of the
equipment is P12,000. The balance was payable as follows: 20% of the balance paid at
the time of purchase; the rest payable in 10 months starting June 1, 2030. After six
months of paying, Mr. Rusty defaulted in the payment of December 1, 2030. The five
units of air conditioners were repossessed, and it would require P2,000 reconditioning
cost for each air conditioner before it could be resold for P6,000 each. A 15% gross
profit rate was usual from the sale of used equipment. Operating expenses, exclusive
of loss on repossession amounted to P5,380. How much is the total realized gross
profit on installment sales?
A. P19,040
B. P16,720
C. P23,240
D. P17,860

Question 43:
Private college is sponsored by a religious group. Volunteers from this religious group
regularly contribute their skilled services to Private and are paid nominal amounts to
cover their commuting costs. If Private did not receive these volunteer services, it
would have to purchase similar services. During 2010, the total amount paid to these
volunteers was Php 12,000. The gross value of services performed by them, as
determined by reference to lay equivalent salaries, amounted to Php 300,000. What
amount should Private record as expenses in 2010 for volunteers’ services?
A. Php 300,000
B. Php -0-
C. Php 312,000
D. Php 12,000

Question 45:
Botanic Choice sell natural supplements to customers with an unconditional right of
return if they are not satisfied. The right of return extends 60 days. On February 10,
20x4, a customer purchases P3,000 of product (cost P1,500). Assuming that based on
prior experience estimated returns are 20%. What journal entry should be included to
record the sale and cost of goods sold?
A. Credit to Refund Liability of P600 and a credit to Sales Revenue of P2,400.
B. Debit to Cost of Goods Sold and credit to inventory for P1,500.
C. Credit to Estimated Inventory Returns of P300.
D. Debit to Cash and a credit to Sales Revenue of P3,000.

Question 46:
Information for the month of May concerning Department A, the first stage of Leo
corporations’ production cycle, is as follows:
Materials Conversion Costs
WIP Beg P 4,000 P 3,000
Current costs 20,000 16,000
 Total costs P 24,000 P 19,000
EUP weighted 100,000 95,000
ave.
Ave unit costs 0.24 0.20
Goods completed 90,000 units
WIP end 100,000 units
Material costs are added at the beginning of the process. The ending work in process is
50% complete as to conversion costs. How would the total cost accounted for be
distributed, using the weighted-average method?

Goods Completed WIP, end

A. P39,600 4,400
B. P13,000 0
C P44,000 3,400
.
D P39,600 P3,400
.

Question 47:
Ended Corporation is undergoing liquidation. The trustee of Ended Corp. presents the
following information:
 P70,000 assets are available to total unsecured and non-priority claims, P10,000
of which represents Inventories. It was ascertained that inventories were not
pledged to any liabilities.
 Unpaid liabilities are as follows: administrative expenses: P3,500; taxes: P6,000
and wages: P2,500.
 Payment to fully secured creditors and partially secured creditors amounts to
P68,000 and P135,000 respectively.
If the recovery percentage is 35 percent, determine the amount of (1) Assets pledged to
fully secured liabilities and (2) partially secured liabilities.
A. (1) P140,000; (2) P100,000
B. (1) P150,000; (2) P200,000
C. (1) P140,000; (2) P200,000
D. (1) P150,000; (2) P100,000

Question 48:
At January 1, 2018, Barnabas Manufacturing Company had a beginning balance in
Work in process of Php80,000 and a beginning balance in Finished goods of
Php20,000. During the year, Barnabas incurred manufacturing costs of Php350,000.
During the year, the following transactions occurred:
Job A-12, was completed for a total cost of Php120,000 and was sold for Php125,000.
Job A-13, was completed for a total cost of Php200,000 and was sold for Php210,000.
Job A-15, was completed for a total cost of Php60,000, but was not sold as of year-end.
The Manufacturing overhead account had a preliminary credit balance of Php 12,000
and was cleared to zero at year-end. At the end of the year, what was the balance in
Finished goods?
A. Php30,000 debit balance
B. Php60,000 debit balance
C. Php40,000 credit balance
D. Php80,000 debit balance

Question 49:
Sol Corp consigned ten cellphones to Dante Inc. Each cellphone cost P30,000 and are
to be sold at P50,000 each. Sol Corp paid P25,000 for the shipment to consignee,
Dante. On November 13, 2030, Dante Corp. submitted an account sale stating that it
had returned one unit and was remitting P219,000 after deducting the following
charges:
Commission, 20% of selling price (unknown)
Selling expenses 10,000
Delivery and installation of items sold 6,000
Cartage cost upon receipt of consigned goods 5,000
What is the total consignment net profit?
A. P20,000
B. P(25,500)
C. P23,000
D. P24,800

Question 51:
On January 1, 2018, My Loves Construction Corp. began constructing a P2,100,000
contract. The following are relevant information provided by the corporation: My Loves
uses percentage of completion method. For the year ended December 31, 2019, My
Loves Construction billed its client an additional 55% of the contract price.
2018 2019 2020
Construction in Progress P441,000
Estimated cost to complete unknown
Costs Incurred P425,250 P969,000 P675,750
Excess of Construction in Progress over P84,000 due P330,750 due
Billings to to
How much is the realized gross profit (loss) in 2019?
A. P(60,750)
B. P30,000
C. P15,750
D. P(45,000)

How much is the balance of construction in progress in 2019?

A. P1,349,250
B. P2,010,750
C. P1,365,000
D. P1,680,000

Question 52:
Papasa Corp. Corporation acquires 80% ownership of CPA Incorporated, at a time
when Papasa Corp.’s investment and CPA’s book values were equal. During 2034,
Papasa Corp. sold goods to CPA for P200,000 making a gross profit percentage of
20%. Half of these goods remained unsold in CPA’s inventory at the end of the year.
Income statement information for Papasa Corp. and CPA for 2034 were as follows:
Papasa Corp CPA
Sales Revenue 1,000,000 600,000
Cost of Goods Sold 500,000 400,000
Operating 500,000 80,000
Expenses
Separate incomes 250,000 120,000
How much is the cost of goods sold to be presented in 2034 consolidated income
statement?
A. P920,000
B. P720,000
C. P900,000
D. P880,000

Question 53:
Peter Corp manufactures electric drill to the exacting specification of various customers.
During December 2018, Job 25 for the production of 2,200 units was completed at the
following cost per unit:
Direct Materials Php200
Direct Labor 160
Factory 240
Overhead
Final Inspection of Job 25 disclosed 100 defective units and spoiled units. The
defective units were rework at a total cost of Php 10,000 and the spoiled units were sold
at Php 30,000. How much is the unit cost of good units produced on Job 25?
A. Php 650
B. Php 660
C. Php 600
D. Php 590

Question 54:
On November 1, 2030, Marie Co. entered into a firm commitment with Toki-Toki
Japanese Company for the export of dried mangoes with & contract price of 10,000
Yen. The goods will be delivered by Marie Co. on January 30, 2031. On the same day,
in order to protect itself from the risk of changes in fair value
Changes in underlying foreign currency, Marie Co. entered into a forward contract with
BDO for the sale of 10,000 Yen at the forward rate on November 1, 2030. PAS 39
provides that hedge of the foreign currency risk of a firm commitment may be accounted
for as either fair value hedge or cash flow hedge. Marie Co. elected to account for the
hedge of the firm commitment using fair value hedge. The following direct exchange
rates are provided:
Nov. 1, 2030 Dec. 31, 2030 Jan. 30, 2031
 Buying spot rate P10 P13 P12
Selling spot rate P13 P15 P16
Forward buying 90- P11 P14 P15
days
Forward selling 90-days P13 P16 P17
Forward buying 60- P14 P17 P16
days
Forward selling 60-days P15 P18 P14
Forward buying 30- P11 P15 P12
days
Forward selling 30-days P13 P11 P14
Assuming Marie opted to use cash flow hedge to account for the hedge of the firm
commitment, what is the Other Comprehensive Income due to hedge item for the year
ended December 31, 2030?
A. P40,000 gain-Earnings
B. Zero
C. P40,000 loss-OCI
D. P40,000 gain-OCI

Question 55:
A company manufactures a product that passes through two product departments,
molding and assembly. Direct materials are added in the assembly department when
conversion is 50% complete. Conversion costs are incurred uniformly. The activity in
units for the assembly department during April is as follows:
Work in process inventory, April 1 (60% complete as to conversion 5,000
costs)
Transferred in from molding department 32,000
Defective in from molding department (within normal limits) 2,500
Transferred out to finished goods inventory 28,500
Work in process inventory, April 30 (40% complete a conversion costs) 6,000
The number of equivalent units for direct materials in the assembly department for April
calculated on the weighted average basis is:
A. 31,000 units
B. 34,000 units
C. 37,000 units
D. 26,000 units

Question 58:
DoTr, a national government agency unit incurs an obligation for the purchase of a
garbage truck for Php 450,000 on March 15. The dump truck is to be delivered on
March 31, and the motor firm agreed for a 30-day, interest free-delayed payment, i.e.
payable on April 30. Assume a 12% tax on the purchase covered by TRA. On April 30,
the entry to be recorded by DoTr will be:
A. Dr. Accounts Payable 396,000; Due to BIR 54,000; Cr. Cash-MDS Reg 450,000
B. Dr. Accounts Payable 450,000; Cr. Cash NT-MDS Reg 450,000
C. Dr. Accounts Payable 450,000; Cr. Cash NT-MDS 396,000; Due to BIR 54,000
D. Dr. Accounts Payable 396,000; Due to BIR 54,000; Cr. Cash-MDS Reg 396,000;
SING 54,000

Question 60:
Dorie Co. had the following production for the month of June:
Work in process at June 1 10,000
Started during June 40,000
Completed and transferred to finished goods during 33,000
June
Abnormal spoilage incurred 2,000
Work in process at June 30 15,000
Materials are added at the beginning of the process. As to conversion cost the
beginning work in process was 70% completed, and the ending work in process was
60% completed. Spoilage is detected at the end of the process. Using the weighted-
average method, the equivalent units for June, with respect to conversion costs, were
A. 44,000
B. 50,000
C. 45,000
D. 42,000