Multiple Choice Problems

6. e, 20x6 – 0; 20x7 - 0
Unrecovered costs,1/1/20x4 110,000
Less: Collections
1/1//20x4 0
Add: Sales on account 15,000
Total 15,000
Less: 1/1/20x5 10,500
Collections in 20x4 __4,500
Unrecovered costs,1/1/20x5 105,500
1/1//20x5 10,500
Add: Sales on account 30,000
Total 40,500
Less: 1/1/20x6 25,500
Collections in 20x5 15,000
Unrecovered costs,1/1/20x6 90,500
1/1//20x6 25,500
Add: Sales on account 60,000
Total 85,500
Less: 1/1/20x7 40,500
Collections in 20x6 45,000
Unrecovered costs,1/1/20x7 45,500
1/1//20x7 40,500
Add: Sales on account 24,000
Total 64,500
Less: 1/1/20x8 70,000
Collections in 20x7 ____-0-
Unrecovered costs,1/1/20x8 45,500
7. b
20x4: P150,000 – (P568,620 x 10%) = P93,138.
20x5: (P568,620 – P93,138) x 10% = P47,548.

8. a – refer to No. 3 for discussion.

Cost, January 1, 20x4 P 60,000
Less: Collections including interest – 20x4 32,170
Unrecovered Cost, December 31, 20x4 P 27,830

9. c (P3,600,000 – P2,400,000) ÷ P3,600,000 = 33 1/3%

(P3,600,000  .20) + [(3,600,000  .80)  4/12)] = P1,680,000
P1,680,000  33 1/3% = P560,000.

10. b [(P3,600,000  .20) + (P3,600,000  .80 x 8/12] – P2,400,000 = P240,000.

11. b – refer to No. 3 discussion.

Cost, January 1, 20x4…………………………………………………………….P 500,000
Less: Collections including interest – 20x4……………………….P241,269
Collections including interest – 20x5……………………… 241,269 482,538
Unrecovered Cost, December 31, 20x5……………………………………….P 17,462
12. b [(P1,400,000 – P980,000) ÷ P1,400,000] x P840,000 = P252,000.
13. c P300,000 + P50,000 = P350,000
P350,000 – P245,000 = P105,000 gross profit (30% gross profit rate)
(P300,000 – P100,000) x 30% = P60,000.

14. c P1,200,000 – P720,000 = P480,000 gross profit (40% gross profit rate)
P480,000 – (P288,000 ×.4) = P364,800.