The Professional CPA Review School

CH
Main: 3F C. Villaroman Bldg. 873 P. Campa St. cor Espana, Sampaloc ,
Manita
@ (02) 735 8901 / 735 9031 / 0922 861 0191
email add: crc_ace@yahoo.com
Baguio
2"? FLR #12 CURAMED Ravao
BLDG, Baguio 3/F GCAM Bldg. Monteverd
® (074) 442-1440 / 0922-8499196City @ (082) 285-8805 /
0925.72 en
ADVANCED FINANCIAL ACCOUNTING & REPORTING OCTOBER 2019 BATCH

PREWEEK QUIZZER 1

Total interest 487,500

Total salaries 1,440,000
Balance 150,000
Total
2,077,500 B
2.
Available to owners:
Cash balance P103,500
Less: Liabilities (60,000 + 7,500) ( 67,500)
Anticipated expenses (4,500)
Available to owners P_31,500
Tony Paolo Marc Joseph Total
Equity balances P90,000 P150,000 P120,000 (P16,500) P343,500
Liquidation loss ( 78,000) (|78,000) ( 78,000) ( 78,000) (312,000)
Deficiency of D ( 31,500) ( 31,500) ( 31,500) 94,500
Deficiency of A 19,500 (_9,750) (__9,750)
Cash distribution P_30,750 P___750 31,500
P_
B

3.
Total equity of partners P343,500
Add total liquidation gain:
Capital balance of partner J (P16,500)
Add share of partner J , 5,000
Total share on liquidation gain P 21,500
Profit share of partner J = % 86,000
Total cash available to owners P429,500
Add liabilities to be paid (60,000 + 7,500) 67,500
Add: Liquidation expenses 4,500
Less: Beginning cash (103,500)
Total selling price of non cash assets P398,000 C

4.
Cash available for distribution to partners:
Beginning cash P200,000
Add: Proceeds from sale of noncash assets 500,000
Total P700,000
Less: Accounts payable 300,000
P400,000
John Kelly Lance Total
Capital balances P400,000 P600,000 P200,000 P1,200,000
Liquidation loss ==
(400,000) (240,000) (160,000) (800,000)
Cash distribution P_400,000
‘
P360,000 P_40,000
D

5. A .
©
|

Total Capital of Old Partners

~~

320,000
(25,000)
(25,000)
Adj 270,000
Xx 3/2
Total Capital 405,000
X 1/3
Cash Investment needed 135,000

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bui
fo CRC-ACE/AFAR: PREWEEK QUIZZER 1 (OCT 2019 BATCH) PAGE 2
6 B
De Total agreed capital
Total capital of old partners P300,000
Old partners’ interest + % "00
P 400,00
Less goodwill recognized to the new partner
Wh contributed capital (2P 5,000)
375,000
om ntributed capital of the old partners 300,000
Cash to be contributed by the new
partners P_75,000
7.
Total bonus to old partners (15,000
(15 > 2/6)
+
P45,000
Total agreed capital:
Capital contributed by the old partners P300,000
Add bonus to old partners
Total capital of old partners . P345,000
Old partners’ interest + %
P460,000
Léss old partners contribution
Cash to be invested by the new partner p160,000 C

8&8 A
9. B

Fair value of shares issued

(12,000 x 50) 600,000
“OPC (28,000)
Change in equity 572,000
10. B
11.
Cost of investment:
Common shares (24,000 x 20) P 480,000
Preferred shares (12,000 x 100) 1,200,000
-Cash __
240,000 P1,920,000

Fair value of identifiable net assets acquired:

Accounts receivable P 158,000
Inventory 412,000
Land 540,000
1,032,000
—

Buildings and equipment

Current Hlabilitles ( 228,000).
Bonds payable - . 448,000)
(_ 1,466,000
p_454,000 B
Goodwill from business combination

12. D
13. D
14. C
15. C
16. A
17. C
Total ending inventories of PAIYAKAN Company. _
Home office P 550,000
Branch office:
From home office P 180,000
Shipments in transit (No. 5) 30,000
P 210,000
Total -
‘Less: Mark up (1/6 of 210) 35,000) (_

P 175,000
195,000
C
From outsiders __20,000

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 ETD 28 MeN ¥
ke Pema ee.

a
EEK QUIZZER 1 (OCT 2019 BATCH) PAGE 3
CRC-ACE/APAR: PREW
18. A
Branch account Home office account P 90,000
Unadjusted balance P 200,000
J) Furniture purchasechd by the branch ( 40,000)
( 20,000)
2) Collection of bran accounts
3) Remittance in transit ( 50,000)
10,000
4) Error on allocated expenses
5) Shipment in transit 30,000 A
P110,000
Adjusted balance P.110,000

19,
P 950,000
Correct sales
Correct cost of sales:
P 125,000
Beginning inventory (150,000 x 5/6)
Add: Purchases from outsiders 240,000
Add: Shipments from home office at cost
(450,000 + 30,000 x 5/6) 400,000
Less: Ending inventory (refer to no. 2) (570,000)
(195,000) P 380,000
Gross profit 170,00
Less: Correct expenses (160,000 + 10,000) B
Correct net income of the branch
P210,000

20.
Valuation Bonus Balance
BV
6,000 2,775 40,775 A
M 32,000
6,475 88,475
w 68,000 14,000
- 47,000
K 55,000 (8,000)
- (1,250) 58,750
s 60,000
235,000
TOTAL 215,000 20,000

21.
20,555
implied GW (255,555 235,000)
—

—20%
X (45% - 65%)
4,111 D
Adv. of BONUS

22. B DIAMOND RUBY TOTAL

P 75,000 P 200,000
P_ 125,000
Capital, March1, 2019 4,860 39,400
Income 34,540
A Diam ond (deduct): Net (50,000)
_
|

(2,000) (30,000)
Drawings P1g9,400)
_P139,540 _P 49.860
|

Ca December 31,2008
P_ 233,000
Sales 5,000
Less: Sales returns P228,000
Nat Sales
Legg: Costs of Goods Sold P196,000
Purchases 73.000 123,000
Less: Ending Invento P 105,000
Gross Profi t P 60.000 |
Less: Operating Expense
(2,500)
Unused supplies 950

aed
paid Insurance
nsesxpenses
1550 4
|
65,600
| ExperuedE
___Acc
x 20% x 10/12
7500
Depreciation (P45,000

Allocation of Net Income: RUBY Total

DIAMOND
P 25,000
Salary (30,000) x 10/12
P 25.000 | 1,440
* 1,440
Bonus 12,960
| __ Balance (125:75) |
8.100
35.450
P 4,860
P 4.860 P_39,400

*
bonus = 10% 9Net Income Salary) -
-
=,10 (P39, 400 P25, 000)

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 —_ CRC-ACE/AFAR: PREWEEK QUIZZER 1 (OCT 2019 BATCH) PAGE 4
=P1, 440

23. C
|CID in 2019 (20,800 x 60%) 12,480,000
| CID in 2018 (19,500 x 20%) 3,900,000
Defi | Clin 2019 8,580,000
est
24. 2018 2019 2020
Contract price P16,000,000 16,000,000 P16,000,000
Total estimated costs:
Cost incurred to date P 4,600,000 P 9,100,000 14,350,000
20
26%
Estimated cost to complete
Total
9,640,000
P14,240,000
_5,100,000
P14,200,000
iO
P14,350,000
20 Estimated gross profit P 1,760,000 P 1,800,000 P 1,650,000
Percentage of completion x 31% x 58% x 100%
Gross profit to date P 545,600 P 1,044,000 P 1,650,000
Less: Gross profit prior years O (545,600) (1,044,000)
Ind. Gross profit this year
p__545,600 606,000
P498.400 P. A
25. A
P54
| 2018 2019
| Contract price P9,600,000 P10,080,000
|Costs Incurred to date P4,920,000 P 8,640,000
ONA
P 9. | Add: estimated costs to compute 4,920,000 2,160,000 |

|Total estimated costs P9,840,000 P10,800,000

atio
Estimated gross profit (loss)
|
P( 240,000) P( 720,000)
| Multiply by: percentage of completion. 100% 100%
| Recognized gross profit to date P(240,000) P(720,000) |

Less:
| Recognized gross profit (loss) in prior years -0- (240,000) |

| Recognized gross profit (loss) each year... P 240,000 Pi 480,000) |

% of completion cost-recovery method
(zero-profit approach)
Contraction-in-Progress Progress Billing

4,920,000 | 240,000 loss 5,280,000

4,680,000 5,280,000
3,720,000 | 480,000 loss 3,420,000

7,920,000 =
| 8,700,000
due to cost umers
P780,000
Note: if there is an anticipated loss, the
Construction-In-Progress for both methods will exactly be the
same in the period of incurrence

26. A DP P 750,000
PV of note (300,000 x 3.0374)
911,220
Total unearned fee P 1,661,220 (period of refund has not
yet elapsed)
27
Franchise revenue earned:
Down payment (300,000 x
4) P1,200,000
Installments (100,000 x 3.79) = 379,000 x 4
1,516,000
Less: Franchise costs P2,716,000
(300,000 x 4) ( 1,200,000)
Discounts (50,000 x
.38) 4
Franchise profit (__76,000)
P1,.440,000 D

28. C

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 (OCT 2019 BATCH) PAGE 5
PREWEEK QUIZZER
1
CRC-ACE/AFAR:

29. B ent (P35,000 + P 144,000) x 49 ° 71.600

Allowance before adjustme branch ding fr om
on th en inventory the
Allowance required 00 x % )
Home O ffi ce ( P 40,0 40
Pp Shem
Realized allowance
P ,6 . 00 to the re ul d
the unrealized allowance by 55
The entry is to decrease the books of th e Home Office the true resuit of
of P 16,000 and to reflect in ed by the branch for its own
ss of the amount report
23
pi the branch operations regardle
xy
Operations.

30. € P 4,700
ws + P 500 +P 800)
MI. beg (P3,400 50,000
4 6,500
~ Purchases
Mi, end (P3,100 + P 66
0 + P 750 + P 1,990 *) P 48,200
yj Combined Cost of Good
s Sold
: Please see item 31.
+
transit derived as
4 31. B
The P 1,990* is the co st o f th e m erchandise shipments
in

P 13,189
—~¥
follows: x 110%
7 (P 7,370 + P 4,620)
es billed price 11,000
Total shipments to branch @ home office (P 6,820 + P 4,180)
ay

a Total recorded shipments

from P
—4 an si t @ bi lled prices
Merchandise in tr
% 1,990
ae 2,189 sit at cost (P 2,189 / 110%)
Merchandise in tran
fi
3
32. P 6,875
~ P 750) x 20/120

i
B 30,000 + P 12,000 2.750
be fore ju stm en t (P
ad 500 X 20/120)
af
Allowance on BEI (from HO) (16, P 4,125
Less allowance required
( 2,600)
Realized allowance
4
P 1,525
— Reported
branch net loss
come
True branch net in
—
33. D Mat
cc
— 900
900 900
FT 15
300 300
4 4,200 | 1,200 |
1,050 |

1.25
Mat. 1,500,000 @ |
CC 3,696,000 @ | 3.52
5,196,000 4.77 |
IPE Costs
375,000
Mat. 300 x 1.25
CC 150 x3.52 528,000
203,001
Total
34. C Mat 2
50.000 50 000
FT 20.000
IPE 20.000
70.000 70,000
WA
5.000
IPB (10,000

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 CRC-ACE/AFAR: pR PREWEEK QuizzeR 1
*
(O T
(OCT 2019 BATCH PAGE 6
65.000
35. 8B
49.60 ~ 47.45 =
36. Cc
2.15 x 35,000 = 75,250 lose
37. A
38. A
39. ¢
40. ¢c
41. A
42.
43. B
Total Overhead cost for 2,000 boxes:
x P 8,000
Machine setups (4 2,000) 20,000
Materials handling (10,000 x 2)
l x 10,000
Hazardous waste contra (2,000 5) 750
Quality control (10 x 75)
Machine hours (500 x 10) —9,000
Total cost P43,750
Overhead cost per box ( 43,750 / 2,000) = P21,B75

44. Cc

Overhead rate = 625,000 / 20,000 = P3),25

=
Total overhead cost for 2,000 boxes (500 x 31.25)
Cost per box ( 15,625 /2,000) =
P7,8125

45. C

46. C
Fair value of shares issued
(12,000 x 50) 600,000
OPC 9.000

47. C
600,000
Mi (12,000 x 18) 216,000
816,000
Totai
FV of NA (695 — 190) 505,000

48. B
49. C
50. A Romina Total
Marga Cassie
Net Income distribution: P 4,375 P 3,125 P 13,750
P 6,250
Salaries 146 85 2,181
Interest of 4% 1,950
3.5 10,745.50 35.819
91.50
Balance 60:10:30 P 51,750
P29,691.50 P 8,103 P13,955.50
35,000 5,900 (850) __40,500
Balances, 12/31/19 P64,691.5014,003 P13,105,50 P_91,800
Ending capital adjusted fore the d capit al must be lower than
lowest amount of cash, there agree
The partners wish to distribute the
be determined as follows:
P91,800. The required capital can =
= P107,819 cannot be.
Marga capital 64,691.50/60%
= P4140,030 cannot be.
Cassie capital = 14,003/10%
= = P43,685 can be.
Romina capital 13,105.50/30%
ces must be:
Therefore, the required capital balan
= P26,211
Marga = P43,685 x 60%
Cassie = P43,685x 10% = P4,368,50
=
Romina P43,685x 30% = #P13,40550 A

51) D
Alfredo, capital 100,000
JR, capital 30,000
Marvin, capital 20,000

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 CRC-ACE/AFAR: PREWEEK QUIZZER ' (OCT 2019
BATCH) PAGE 7
52) c Cash 150,0000 pb
Under the Eeodwill
meth od, the excess Payment to of P50,000, represents
Alfredo rec Enlze d ot
d thus
bythe business Prior to his withdrawal. The total goodwill of P300 000 (80,000/:ane
"
, Was
|

the entry must be: asin & too, the capital of JR and Marvin by P150,000 and P100,000, t
respectively. There
<
otore
apit
300,000
Goodwit
Cash 160,000
» Capital 160,000
M arvin, capital ¢
100,000
53) B
Capital balance of Gaylord my
SS: on the bonus given to Santino (2,500 x 3/6)
withdrawal
caP16,e250
vrs 8
immediately after Santino’s
nh ce of Gaylord
Capitalmaman
54) A
The P2,500 excess payment to Santino must be his share on the goodwill recognized prior to his
er |s
withdrawal. Under the partial goodwill method, only the share of the withdrawing partnafter
the one recor ded in the books. Therefore the capital batance of Gaylord imm edia tely
Santino’s with drawal will still be the same, P17,500.

55) D
his share on
Under the full goodwill method, the P2,500 excess payment to Santino represents must be
the tota l good will
the total goodwill recognized prior to his withdrawal. Therefore,
(2,500/40%) = P6,250.
P17,500
Capital balance of Gaylord prior to withdrawal
Add: Share on the goodwill recognized (12,500 x 30%) —1,875
with draw al P19,375.
Capital of Gaylord immediately after Santino’s

56) A
Peter
Total
Simon Timothy
8,904 6,810 26,010
10,296
(3,600) (3,990) 15,990
(5,000)
11,904 10,800 42,000
19,296
(12,230.40) (7,644) (38,220)
(18,345.60)
950.40 (326.40) 3,156 3,780
(230.40) 326.40 (96)
3,060_A 3,780
720
57) B
Luke John Total
Paul
250,000 237,500
375,000
50,000
(37,500) 875,000
250,000 2,218,750
33,750 (27,500)
(82,500) (82,500)
(10,000) 600,000
167,500 205,000
B 227,500
Cash beginning 112,500
Proceeds 750,000
(262,500)
Liabilities
Net 600,000

58) D
Total unpaid claims must be P20,000
David and Gideon
Total amount owed to the firm by partners
Total interest in the firm by partner Sam
uel (
5,000)
P15,000 assets
Total liabilities still unpald lities are even greater than his personal
ienc y, but Davi d's Ilabi
David and Gideon mus pay t thelr capi tal defic Gideon
ot Gide on has still excess asse ts over liabilities of P5,000, therefore,
$0 David is insolvent and cann pay. t be pald by Samuel. D
balance of P10,000 liabilities mus
must contribute the excess of P5,000. The

§9) D
Project 4: P 260,000
Contract price
Total estimated costs:

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 a CRC-ACE/AFAR: PREWEEK QUIZZER
Costs incurreg conte 2019
1 (OCT
201 CH) PAGE 8
P 225 . 000
St, addition: Costs to
1

ross loss uring the complete _295,000

Project =
year totally
recognized oe P( 15,000)
ntice
Contract
estim P 335,000
costs:
sts
incurred dur ng 2019 P
Est. naan

Costs ta complete
Esti
see000 1

Bross profit
s of completi
oe‘500
Percenta age (63/315 or 20%) x___20%
Gross profit realized pletion 4,000
during the year
Project 3:
Price p 250.000
otalract
cont actual costs 165.000
is during the year 85,000
profit reazed
Actual gross
Total income fre ba struction recognized during the year p74,909 D

60) c
Contract price ~ P 2,400.000
Total costs 2amoaee
incurred Chen soo +620 000) P 30,000
Actual total gross profit
Less: Gross Profit recognized In prior years:
Contract price P 2,400,000
x 15%
Percentage of completion
revenue In prior years P 1,800,000
Contract 17 50,000 50,000
Cost s incurred in prior years
P(20,000)
Gross loss recognized this year 2019
Contract price - Pampanga P 480,000
Percentage of completion
x__15%
P 72,000
revenue recognized this year
Contrac t rred 70,000
Cost s incu during the year
Gross profit recognized during 2014 ——2,000 C
P(48,000)
Total loss recognized during the year

61) Cc
2015 2018 2019
P 9,750,000
Contract price P9,750,000 P 9,750,000
7,500,000 10,000,0 00 10,500,000
Total estimated costs
—

P 2,250,000 P( 250,000) P( 750,000)

Estimated (Actual) Profit (loss)
Percentage of completion: x 10%
750,000/7,500,000 x 100% x 100%
Recogn ized in full
P 225,000 P( 250,000) P( 750,000)
Gross profit to date 225,000 (250,000)
Less: Gross profit(loss) prior year 475,000) P{ 500,000) C
} the year P_225,000 P{_
Gross profit(loss) during
i
62) D

63) A

64) C
ACCENTURE Company.
Total ending inventories of
;
P 5,500,000
Home office
Branch office:
P 1,800,000
From home office
sit 5) 300,000
i
Shipments in tran (No.
P 2,100,000
Total
Less: Mark up (1/6 of 210) (350,000)
P1,750,000 C
i 200,000 (1,950,000
From outsiders
j
65) A office account
} Branch account Home
| P 2,000,000 P 900,000
Unadjusted balance
. the branch ( 400,000)
‘ 1) Furniture purchased by ( 200,000)
: Coll ecti on of bran ch accounts
2)
ce in transit ( 500,000)
3) Remittan

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 -ACE/AFAR: PREWEEK QUIZ ZER 1
(OCT 2019 BATCH)
RO Error on allocated expenses PAGE 9
5) Shipment in transit 100,000
Adjusted balance 300,000
P4,200,000 P1100,000 A
66) D
Correct sales
Correct cost of sales: P 9,500,000
Beginning inventory (1,500,000
Add: Purchases from *9/8) P 1,250,000
outsiders
Add: Shipments from home 7,400,000
office at cost
(4,500,000 + 300,000 x 5/6)
Less: Ending invento ry (refer to no, 4,000,000
Gross profit 2) (1,950,000) (5,700,000)
:
ct expenses (1,600,000 +
P3,800,000
100,000) { 4,700,000)
Correct net come of the branch P_2,1.00,000

67) D
Beginning inventory:
Home office P 7,000,000
Branch (refer to no. 3) 1,250,000 P 8,250,000
Add: Purchases:
Home office P 29,000,000
Branch 2,400,000 31,400,000
Available for sale P 39,650,000
Less Ending inventory (refer to NO. 39) 7,450,000
Cost of sales of ACCENTURE Company p.32,200,000 D

68) C
P 44,000,000
Sales of the home office reported
4,800,000
Less: Sales to branch (4,500,000 + 300,000)
Correct sales of the home office
P 38 :00,(
oo
Correct sales of the branch
Total correct sales of the company
oa ae 000
p_48,700,000

69) B

70) Cc

reh/cde

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