Professional Documents
Culture Documents
FINANCIAL ACCOUNTING 1
NAME: SCORE:
PROFESSOR: DATE:
INSTRUCTIONS: Write your final answer at the answer sheet provided at the end of
exam. Strictly no erasure. Provide solutions as necessary. Good luck!
a. P2,784,000 c. P3,784,000
b. P3,084,000 d. P3,584,000
2. Ralf Corporation had the following account balances at December 31, 2010:
The total amount to be reported as cash and cash equivalents as of December 31,
2010 is
a. P7,000,000 c. P6,500,000
b. P6,000,000 d. P5,500,000
3. On December 31, 2010, Alfonso Company had the following cash balances:
a. P21,850,000 c. P21,800,000
b. P16,850,000 d. P14,850,000
01/01 12/31
Cash P 47,000
Inventory 101,000 P 93,000
Accounts receivable 82,000 116,000
Accounts payable 68,000 63,000
Sales 1,150,000
Cost of goods sold 900,000
Operating expenses 200,000
5. The petty cash fund of Guiguinto Company on December 31, 2010 is composed of the
following:
The petty cash ledger account has an imprest balance of P50,000. What is the
correct amount of petty cash on December 31, 2010?
a. P34,000 c. P39,000
b. P14,000 d. P42,000
BANK RECONCILIATION
6. The following data pertaining to the cash transactions and bank account of
Mandirigma Company for the month of May are available to you:
7. The information below is from the books of the Seminole Corporation on June 30:
Assuming no errors were made, compute the cash balance per books on June 30
before any reconciliation adjustments.
a. P11,404 c. P10,460
b. P12,348 d. P10,220
Shown below is the bank reconciliation for YOUR Company for May 2010:
The bank statement for June 2010 contains the following data:
All outstanding checks on May 31, 2010, including the bank credit, were cleared in
the bank in June 2010.
There were outstanding checks of P15,000 and deposits in transit of P19,000 on June
30, 2010.
10. As of June 30, 2010, the bank statement of Ang Po Trading had an ending
balance of P373,612. The following data were assembled in the course of
reconciling the bank balance:
The bank erroneously credited Ang Po Trading for P2,150 on June 22.
During the month, the bank charged back NSF checks amounting to P2,340 of
which P800 had been redeposited by the 25th of June.
Collection for June 30 totalling P10,330 was deposited the following month.
Checks outstanding as of June 30 were P30,205.
Notes collected by the bank for Ang Po Trading were P8,150 and the
corresponding bank charges were P50.
The adjusted bank balance on June 30, 2010 is
a. P351,587 c. P353,927
b. P358,147 d. P359,687
ACCOUNTS RECEIVABLE
11. On December 31, 2010 the accounts receivable control account of Ipil-ipil Co.
had a balance of P181,000. An analysis of the accounts receivable account showed
the following:
22,000
Trade receivables from officers, due currently
1,500
Trade accounts on which post-dated checks are
held (no entries were made on receipts of
checks)
5,000
Total P181,000
12. Roxy Company had the following information relating to its accounts
receivable:
13. Banayoyo Company sells to wholesalers on terms of 5/15, net 30. Banayoyo has
no cash sale but 50% of customers take advantage of the discount. Banayoyo uses
the gross method of recording sales. An analysis of trade receivables at
December 31, 2010 revealed the following:
On the December 31, 2010, what amount should be reported as allowance for
discounts?
a. P750,000 c. P375,000
b. P650,000 d. P500,000
15. The Pacifier Company uses the net price method of accounting for cash
discounts. In one of its transactions on December 15, 2010, Pacifier sold
merchandise with a list price of P500,000 to a client who was given a trade
discount of 20% and 15%. Credit terms were 2/10, n/30. The goods were shipped
FOB destination, freight collect. Total freight charges paid by the client
amounted to P7,500. On December 20, 2010, the client returned damaged goods
originally billed at P60,000.
What is the net realizable value of this receivable on December 31, 2010?
a. P272,500 c. P280,000
b. P274,400 d. P333,200
16. December 31, 2010 balances of selected accounts of Bicolano Company and
pertinent information are shown below:
17. Badoc Corporation's books disclosed the following information for the year
ended December 31, 2010:
19. Gomez Company's net accounts receivable were P400,000 at December 31, 2009 and
P440,000 at December 31, 2010. Net cash sales for 2010 were P260,000. The
accounts receivable turnover for 2010 was 7.0. What were Gomez's total net sales
for 2010?
a. P1,820,000 c. P2,940,000
b. P3,200,000 d. P2,680,000
20. Ilocos Company sold merchandise on credit to Norte Company for P100,000 on
July 1, with terms of 2/10, net /30. On July 6, Norte returned P20,000 worth of
merchandise claiming the materials were defective. On July 8, Ilocos received a
payment from Norte and credited Accounts Receivable for P45,000. On July 24,
Norte Company paid the remaining balance on its account. What was the total cash
received from Norte during July?
a. P44,100 c. P45,000
b. P79,100 d. P80,000
INVENTORIES
Materials P1,400,000
Advance for materials ordered 200,000
Goods in process 650,000
Unexpired insurance on inventories 60,000
Advertising catalogs and shipping boxes
150,000
Finished goods in factory 2,000,000
Finished goods in company-owned retail
stores, including 50% profit on cost 750,000
Finished goods in hands of consignees
including 40% profit on sales 400,000
Finished goods in transit to customers,
shipped FOB destination, at cost 250,000
Finished goods out on approval, at cost
100,000
Unsalable finished goods, at cost 50,000
Office supplies 40,000
Materials in transit shipped FOB shipping
point, excluding freight of P30,000 330,000
Goods held on consignment, at sales price,
cost P150,000 200,000
22. Ovation Company asks you to review its December 31, 2010, inventory values and
prepare the necessary adjustments to the books. The following information is
given to you.
a. Ovation uses the periodic method of recording inventory. A physical count
reveals P2,348,900 inventory on hand at December 31, 2010.
b. Not included in the physical count of inventory is P134,200 of merchandise
purchased on December 15 from Standing. This merchandise was shipped f.o.b.
shipping point on December 29 and arrived in January. The invoice arrived and
was recorded on December 31.
c. Included in inventory is merchandise sold to Oval on December 30, f.o.b.
destination. This merchandise was shipped after it was counted. The invoice
was prepared and recorded as a sale on account for P128,000 on December 31.
The merchandise cost P73,500, and Oval received it on January 3.
d. Included in inventory was merchandise received from Owl on December 31 with an
invoice price of P156,300. The merchandise was shipped f.o.b destination.
The invoice, which has not yet arrived, has not been recorded.
e. Not included in inventory is P85,400 of merchandise purchased from Oxygen
Industries. The merchandise was received on December 31 after the inventory
had been counted. The invoice was received and recorded on December 30.
f. Included in inventory was P104,380 of inventory held by Ovation on consignment
from Ovoid Industries.
g. Included in inventory is merchandise sold to Kemp f.o.b. shipping point. This
merchandise was shipped after it was counted. The invoice was prepared and
recorded as a sale for P189,000 on December 31. The cost of this merchandise
was P105,200, and Kemp received the merchandise on January 5.
h. Excluded from inventory was carton labeled “Please accept for credit.” This
carton contains merchandise costing P15,000 which had been sold to a customer
for P25,000. No entry had been made to the books to reflect the return, but
none of the returned merchandise seemed damaged.
The adjusted inventory cost of Ovation Company at December 31, 2010 should be
a. P2,217,620 c. P2,411,320
b. P2,396,320 d. P2,373,920
23. The physical inventory of Pangasinan Company on December 31, 2010, showed
merchandise with a cost of P4,000,000 was on hand at that date. You also
discovered the following items were all excluded from the count:
a. Merchandise costing P160,000, which was held by Pangasinan on
consignment. The consignor is a subsidiary.
b. A special machine, fabricated to order for a customer costing P400,000,
was finished and specifically segregated in the back part of the shipping room
on December 31, 2010. The customer was billed on that date and the machine
excluded from inventory although it was shipped on January 4, 2011.
c. Merchandise costing P80,000, which was shipped by Pangasinan f.o.b.
destination to a customer on December 31, 2010. The customer expects to
receive the merchandise on January 3, 2011.
d. Merchandise costing P120,000 which was shipped by Pangasinan f.o.b.
shipping point to a customer on December 29, 2010.
e. Merchandise costing P50,000 shipped by a vendor f.o.b. seller on December
28, 2010 and received by Pangasinan on January 10, 2011.
Sales
Purchases
June 1 400 @ P3.20 June 2 300 @ P5.50
(balance)
24. Assuming that perpetual inventory records are kept in pesos, the ending
inventory on a FIFO basis is
a. P1,900 c. P2,065
b. P1,920 d. P2,100
25. Assuming that perpetual inventory records are kept in units only, the ending
inventory on an average-cost basis is
a. P1,980 c. P1,970
b. P1,956 d. P1,995
26. The Alcala Company counted its ending inventory on December 31. None of the
following items were included when the total amount of the company’s ending
inventory was computed:
P150,000 in goods located in Alcala’s warehouse that are on consignment from
another company.
P200,000 in goods that were sold by Alcala and shipped on December 30 and were
in transit on December 31; the goods were received by the customer on January
2. Terms were FOB Destination.
P300,000 in goods were purchased by Alcala and shipped on December 30 and were
in transit on December 31; the goods were received by Alcala on January 2.
Terms were FOB shipping point.
P400,000 in goods were sold by Alcala and shipped on December 30 and were in
transit on December 31; the goods were received by the customer on January 2.
Terms were FOB shipping point.
The company’s reported inventory (before any corrections) was P2,000,000. What
is the correct amount of the company’s inventory on December 31?
a. P2,550,000 c. P2,500,000
b. P1,950,000 d. P2,700,000
27. The Mary I Mfg. Co. in its balance sheet as of December 31, 2010 has an
inventory the amount of P176,000 which consists of:
28. The following information was available from the inventory records of Breakaway
Company for January:
Units Unit Cost
Balance at January 1 3,000 P9.77
Purchases:
January 6 2,000 10.30
January 26 2,700 10.71
Sales:
January 7 2,500
January 31 3,200
Assuming that Breakaway maintains perpetual inventory records, what should be the
inventory at January 31, using the moving-average inventory method, rounded to
the nearest peso?
a. P20,474 c. P20,720
b. P20,520 d. P21,010
29. Skyfall Co. records purchases at net amounts. On May 5 Skyfall purchased
merchandise on account, P32,000, terms 2/10, n/30. Skyfall returned P2,000 of
the May 5 purchase and received credit on account. At May 31 the balance had not
been paid.
30. Yontabal Company started operations in 2008. The following data are
abstracted from the company’s production and sales records:
Using the FIFO cost flow assumption, the gross profit for the year ended December
31, 2010 is
a. P819,000 c. P1,068,000
b. P882,000 d. P1,072,500
PROPERTY, PLANT AND EQUIPMENT
33. White Airlines sold a used jet aircraft to Brown Company for
P800,000, accepting a five-year 6% note for the entire amount.
Brown's incremental borrowing rate was 14%. The annual payment of
principal and interest on the note was to be P189,930. The aircraft
could have been sold at an established cash price of P651,460. The
present value of an ordinary annuity of P1 at 8% for five periods is
3.99. The aircraft should be capitalized on Brown's books at
a. P949,650 c. P757,820
b. P800,000 d. P651,460
On July 31, 2010, how much profit should Aquator recognize on this
exchange?
a. P13,000 c. P8,000
b. P10,000 d. P 0
P37 TB13 Skousen 15th ed
39. A used delivery truck was traded in for a new truck. Information
relating to the trucks follows:
Used truck:
Cost P1,600,000
Accumulated depreciation 1,200,000
Estimated current fair value 320,000
New truck:
List price 2,000,000
Cash price without trade-in 1,900,000
Cash price with trade-in 1,560,000
The amount that should be capitalized as the cost of the new truck
is
a. P1,560,000 c. P1,880,000
b. P1,900,000 d. P1,960,000
rpcpa 5/86 (P220 Kimwell)-AMP
40. The Royal Furniture Mfg. Co. fabricated furniture and fixtures
for its office use in the company’s plant during 2010. The
following data were taken from the company’s records:
Materia Direct
ls Labor
Finished goods P100,80 P151,200
0
Office furniture & 67, 50,5
fixtures 200 00
41. Laur Company uses the composite method of depreciation and has a
composite rate of 25%. During 2010, it sold assets with an original
cost of P100,000 and residual value of P20,000 for P80,000 and
acquired P60,000 worth of new assets with residual value of P10,000.
The original group of assets had the following characteristics:
Total cost P250,000
Total residual value 30,000
The above original group includes the assets sold in 2010 but not
the assets purchased in 2010. What was the depreciation in 2010?
a. P62,500 c. P47,500
b. P52,500 d. P46,500
43. On the first day of its current fiscal year, Lupao Corporation
purchased equipment costing P400,000 with a salvage value of
P80,000. Depreciation expense for the year was P160,000. If Lupao
uses the double-declining-balance method of depreciation, what is
the estimated useful life of the asset?
a. 5 years c. 2.5 years
b. 4 years d. 2 years
44. SEASON’S INC. acquired an asset that had a cost of P130,000. The
asset is being depreciated over a 5-year period using the sum-of-
the-years’ digit method. It has a salvage value estimated at
P10,000. The loss/gain if the asset is sold for P38,000 at the end
of the third year is
a. P4,000 gain c. P68,000 loss
b. P20,000 loss d. P92,000 loss
RPCPA 1095
INTANGIBLES
a. P1,500,000 c. P1,100,000
b. P 600,000 d. P 200,000
a. P1,330,000 c. P1,250,000
b. P2,050,000 d. P 950,000
2,000,000
Adaptation of an existing capability to a
particular customer’s need as part of a
continuing commercial activity
2,200,000
a. P5,000,000 c. P7,000,000
b. P4,750,000 d. P4,500,000
-End of Examination-
Answer Sheet
1. 11. 21. 31. 41.
2. 12. 22. 32. 42.
3. 13. 23. 33. 43.
4. 14. 24. 34. 44.
5. 15 25. 35. 45.
6. 16. 26. 36. 46.
7. 17. 27. 37. 47.
8. 18. 28. 38. 48.
9 19. 29. 39. 49.
10. 20. 30. 40. 50.