CRC-ACE The Professional CPA Review School Main: 3F C. Vilaroman Bldg. 873 P. Campa St. cor Espana, Sampaloc, Manila ‘ (02) 735 8901 / 735 9031 / 0922 861 0191 ‘email add: cre_ace@yahoo.com Baguio Rudel BI0g. V, Lower Mabini cor Diego Silang, Baguio City 3/F GCAM Bldg. Monteverde St. Davao City ‘@ (074) 442-1440 / 0922-8499196 (082) 285-8805 / 0925-7272223 ADVANCED FINANCIAL ACCOUNTING & REPORTING OCTOBER 2016 BATCH C= OPh 5 SUMMARY QUIZZER 2 1. Brad and Jolie are joining their separate businesses fo form a partnership. Property and cash are to be contributed for a total capital of P800,000. The property to be contributed and liabilities to be assumed are: Brad Jolie 2 Book value Fair value Book value Fair value 2 Accounts receivable 60,000 P-60,000 i ss Inventories 60,000 90,000 P'160,000 180,000 Equipment 100,000 80,000 180,000 190,000 Accounts payable 30,000 ( 30,000 20,000 20,000 The partners! capitat accounts are to be equal after all contributions and assumptions of liabilities. Profit and loss ratio is 45% Brad and 55% Jolie: The amount of cash Brad and Jolie: must contribute: ‘A. P400,000; P400,000, respectively C. P10,000; P140,000, respectively B. P160,000; P90,000, respectively D. P200,000; P50,000, respectively 2. Basti and Iris formed the B & | partnership several years ago. Capital account balances on January 1, 2016 were: Basti, P496,750; and Iris, R268,250, ‘The partnership agreement provides Basti with an annual salary of 10/000 plus a bonus of 5% "OF partnership net income for managing the business. Iris is provided an annual salary of P'15,000 with no bonus. The remainder is shared evenly, Partnership net income for 2016 was 30,000; Iris and Basti each invested an additional P5,000-during the year to finance a special purchase. Year-end drawing account balances were P15,000 for Basti and P10,000-for Iris. Iris's capital balances as of December 31, 2016 should be: o +5: A. P280,000 B. P 500,000 Cc. P 499,375 D. P 280,625 3, ©, P, and Q have capital balances of P15,000, P10,000, and P20,000, respectively. Theit P/L ratio is 10% interest on capital balances; P is entitled to a salary of P6,000; Q is guaranteed a minimum share of 12,000 and remainder is divided 30:30:40. ee The minimum profit to give an aggregate of P10,000 to P is: A. PP30,000 b. P26,500 ¢. P28,000 d. P24,500 4, Nestor, Cassandra and Valerie have been partners throughout the year 2016. Their average balances for the year and their balances at the end of the year before closing the nominal accounts are as follows: Balances : Average Balances _Dec. 31, 2016 Nestor (Cr.) 450,000 (Cr) P300,000 =F tom HO Cassandra (Cr.) 15,000 (Or) 5,000 a Valerie (Cr 35,000 (Cr) 50,000 The profit for 2016 is P375,000 before charging partners’ drawing allowances and before interest on average balances at the agreed rate of 4% per annum. Nestor is entitled to a drawing account credit of 50,000, Cassandra of P35,000, and Nestor of P25,000 per annum. The balance of the profit is to be distributed at the rate of 60% to Nestor, 30% to Cassandra, and 10% to Valerie. The partners agreed that, after credits and distribution as indicated in the preceding paragraph, it is intended to adjust the capital accounts of partners by investing the highest amount of cash, so that, the balances in the partners’ accounts will be proportionate to their profit-sharing ratios. None of the partners will withdrew cash from the partnership. What amount of investment must be made by each partners A. Nestor, none; Cassandra, P289,000 and Valerie, none B. Nestor, P90,400, Cassandra, P198,600; Valerie, none o 2b, "SCRC-ACE/AFAR: SUMMARY QUIZZER 2 Page 2 of 10 ©. Nestor, none; Cassandra, P148,400 and Valerie, none D. Nestor, none; Cassandra, P149,400 and Valerie, (P15,066.50) “5, Sam and Kevin have capital balances. of 32,500 and 17,500 and share profits 3:2) Catherine is admitted as a partner and is given a 25% interest in the firm upon investing P20,000 cash. Profits are to be shared §:3:2 by Sam, Kevin and Catherine. Dave subsequently enters the partnership by investing 42,500 for a 20% interest in assets and a 20% share of the firm's profits. Former partners share the balance of profits in their original ratio. Sam has difficulty getting along with Dave and withdraws\from the partnership. The partnership pays P35,500 cash for Sams interest. How much are the capital balances of Kevin, Catherine and Dave, respectively after Sam's withdrawal under the bonus method? oa a A ae, ‘A. 15,500; P15,500; P15,000 9 .« C. P-20,300; P19,200; P19,000 B._ P 17,300; P16,700; P16,500 =~ D. _P.21,500; P20,000; P20,000 ‘6. In relation to the above, how much are the capital balances of Kevin, Catherine and Dave after Sam's withdrawal under the goodwill method? 6 sa a. P 15,500; P15,500; 000° eee c. P20,300; P19,200; P19,000 « » bP 17,300; P16,700; P16,500 ; 5 4d. P 23,500; P20,000; P20,000 << 26.8 |. D7. Given: ay Home Office Control (Branch Book: Be “Jan. 1, 2014 Balance 60,000- “> «Jan. 3, 2017 Cash remitted to home office (80,000 MW Jan. 5, 2014 Shipments from home office 120,000 Jan. 28, 2014 Expenses from home office 45,200 Jan. 28, 2014 Cash remitted to home office (30,000) 24.4 a Jan. 28, 2014 Merchandise returned to home office (42,000 Branch Control (Home Office Books) : Jan. 1, 2014 Balance ” 60,000 Jan. 3, 2014 Cash received trom branch (80,000 Jan. 4, 2014 Shipments to branch 420,000 Jan. 28, 2014 Expense allocation 52,400 Win + Jan. 28, 2014 Shipments to branch 24,000. | . Jan. 28, 2014 Collection from branch customer 18,000 Jan. 28, 2014 Supplies purchased for branch and shipped directly to branch 8,000. = xcept for the error by the branch in recording its share of allocated expenses, all differences are timing differences bec The adjusted balance of reciprocal accounts is: A P103,200.-B. P166,400 ©. P117,200 D. P124,400 Items 8 to 9 are based on the following: The preclosing general ledger trial balances at December 31, 2015, for the REH Wholesale Company and its Quezon City branch office are shown below: Home Office i Dr. (Cr) Dr (Cr) a 90 Cash P 360,000 P 80,000 Accounts receivable 350,000 120,000 f 2s Inventory 700,000 160,000 ne ZH 10. Plant assets - net ‘900,000 Pa » Branch office 200,000 1 (3 ae \ Accounts payable (360,000) (135,000) “ st ‘Accrued expenses (140,000) ( 25,000) Home office A 90,000) 145° Capital stock (600,000) : Retained earnings: (450,000) Sales (4,400,000) (950,000)~— Purchases 2,900,000 240,000.~ Purchases from Home office 450,000 “1207 =p Expenses 440.000 —__160,000 "= 5< 8. How much is the correct ending inventory of REH Wholesale Company? 55> p S11 How much is the correct cost of sales of the REH Wholesale Company? i © A. P3,685,000 ~ B, P3,595,000 ©. 3,290,000 D. P3,220,000 CRO-ACE/AFAR: SUMMARY QUIZZER 2 Page 3 of 10 #2 ¥5. On December 12. How much is the correct sales of REH Wholesale Company? ‘!'//") ‘A. P5,350,000 B. P4,900,000 . P4,870,000 D. P4,975,000 Your audit disclosed the following data 1. On December 23 the branch office manager purchased P40,000 of furniture and fixtures but failed to notify the home office. The bookkeeper, knowing that all fixed assets are carried on the home office recorded the proper entry on the branch office records. It is the company’s policy not to take any depreciation on assets acquired in the last half of a year. " 2. On December 27 a branch office customer erroneously paid his account of P20,000 to the home Office. The bookkeeper made the correct entry on the home office books but did not notify the branch office. "0.25 ~3. On December 30 the branch office remitted cash of P50,000, which was received by the home office in January, 2016. eee Z «4, On December 31 the branch office erroneously recorded the December allocated expenses from the home office as P5,000 instead of P15,000... 1 the home office shipped merchandise billed at P30,000 to the branch office, which was received in January, 2016. chipmon! th brencit < 6. The entire opening inventory of the branch office had been purchased from the home office. Home office 2015 shipments to the branch office were purchased by the home office in 2015. The physical inventories at December 31, 2015, excluding the shipment in transit, are: Home office - P550,000 (at cost) Branch office - P200,000 (comprised of P180,000 from home office and 20,000 from outside vendors.) be 2 r * 7. The home office consistently bills shipments to the branch office at 20% above cost. The sales account is credited for the invoice price. ———— - A. P750,000 B. P720,000 C. P745,000 D. P738,000 9. How much is the adjusted balance of reciprocal account béfore het income of branch? ‘A.P110,000 ~~. P190,000 ©. P80,000 D. P130,000 Z ac) 10. How much is the correct net income of the branch? 2 le ‘A. P220,000 B. P210,000 ~C. P234,000 D. 224,000 me In the Angelina Company, costs incurred during November were P'15,000 for materials purchased, 40,000 for ditect labor, and P50,000 for overhead. Materials inventory decreased by P4,000. If cost of goods manufactured in November was P99,000 and beginning work in process inventory was 28,000, find ending work in process inventory. ‘A. P38,000 B. P34,000 C. P30,000 D. P18,000 14. Gold Metal Works Corporation is a special order manufacturer of metal products. Each period the company accumulates fairly large quantities of metal shavings and trimmings from the products it semanufactures. At least, once a month, the scrap metals are sold to a local scrap metals dealer. This month scrap sales for shavings and trimmings not traceable to any particular jobs total P5,500. in addition, during the current year period 200 metal door facings were cut to an incorrect size on job number 492 and had to be replaced. Although the defective facings cannot be used on job 492, they- ‘can be sold as salvage for P2250 each. The cost of cutting the 200 defective facings is: Materials (1,200 square ft of sheet metal X P10 each) P 12,000 Labor (10 hours X P150 pr hour) 1,500 Factory overhead (10 hours X P450 per hour) 4.500 ( Total cost of scrap on job number 492 Biig.000-9.< = 7. The total amount remove from work in process account must be: A. P18,000 \ B. P23,500 Cc. P4,500 D. P13,500” CRC-ACE/AFAR: SUMMARY QUIZZER 2 Page 4 of 10 15, 16. 47. 18, 19 Folded & Hung manufactures matches per the design and specification of its clientele, and accordingly ses the job order cost system. In April, 2014, i finished 50,000 pieces of Job Shangri-La at the cost of P0.50.per unit for direct materials and P0.40 per unit for direct labor. Factory overhead is applied at 100% of direct labor. Job Shangri-La incurred 600 defective units (considered normal) that had to be re- worked at a Gost of P0.10 per unit, in addition to the predetermined factory overhead. Folded & Hung treats normal defective work as part of the pre-determined factory overhead rate. .20. Sed = I> DrFOR What is the total cost of work on the defective unit and to what account should this be charged? ‘A. P50, workin process ~~ C. P1100, work in process B. P100, factory overhead contro! D. P50, factory overhead contro! Questions 16 and 17 are based on the following: On January 1, there were two jobs in process at the Bert Printing Company, Details ofthe jobs are: ty ees Job No. Direct Materials Direct Labor ° ace ACTS P8,700r15°0% — P3,200+3.4%00 "JQ = es A-38 1,600 2504-2 4,200 * 10-192. az Materials inventory at January 1 totalled P46,000 and P5,800 in materials were purchased during the month. A requisition for P800_in supplies was filled. On January 1, finished goods inventory consisted of two jobs: Job No. A-07 costing of P19,600 and Job No. A-21 with a cost of P7,900. Both these jobs were sold during the month. a Also during January, Job Nos. A-15 and A-38 were completed) Completing Job No. A-15 required additional P3;400 in direct labor and P1,500 in direct materials. The completion costs for Job No, A-38 included P5,400 in direct materials and P10,000 in direct labor. Job No. A-40 was started during the period but was not finished. A total of P'15,700 Of direct materials were brought from the storeroom during the period and total direct labor costs during the month amounted to P20,400. Factory overhead was applied at 150 percent of direct labor costs to all of the jobs. Dm 3.2 Determine the cost of jobs completed in January. a ‘A. P67,700 B. 68,500 C. P69,200 D. P66,900 Determine the cost of work in process ending inventory in Ja January. A. P27,800 B. P28,600 C.P36,100 D. 26,300. CDE Corporation is a manufacturer that uses average costing to account for costs of production. CDE manufactures @ product that is produced in three separate departments: Molding, Assembling, and Finishing. The following information was obtained for the Assembling Department for June: Work in process, June 1 ~ 2,000 units, composed of: Amount. Degrees of completion Transferred in from the Molding Department 'v01 + P32,000~'77100% Cost added by the Assembling Department Direct materials we = 18+ 20,000 100% eae 32, “ Direct labor B= % + 7,200 60% MH Mer thy 210 | 27,697 Factory overhead 5,500 50% 5 Bal oP iotenn ai The following activity occurred during June. 23-5/5 5 ne (a) 10,000 unite were transferred in from the Molding department at a cost of P160,000. + 3 (b) P150,000 of cost were added by the Assembling Department: direct materials, P96,000; labor, P36,000; and factory overhead, P18,000. +45 = 23-5 rd (©) 8,000 units were completed and transferred to the Finishing Department. ‘At June 30, 4,000 units were still in work in process, with the following degrees of completion: direct materials, 90%; direct labor, 70%; and factory overhead, 35%. Determine the cost transferred out during the month of June. ‘A. P260,000 B. P114,700 © P 113,500 D. P261,200 Musician Instrument Company uses a process costing system. A unit of product passes through three departments ~ molding, assembly, and finishing — before it is completed. The following activity took place in the Finishing Department during May. Work in process inventory, May 1 1,400 units + <4 Units transferred in from the Assembly Department 14,000 units. '\""", Units transferred out to finished goods inventory 11,900 units(CRC-ACE/AFAR: SUMMARY QUIZZER 2 Page 8 of 10 2 Raw material is added at the beginning of processing in the Finishing Department. The work in process inventory was 70 percent complete as to conversion on May 1 and 40 percent complete as to conversion on May 31. Musician Instrument Company uses the weighted-average method of process costing. The equivalent units and current period costs per equivalent unit of production for each cost factor are as follows far the Finishing Department. Equivalent Current Period Costs per ~* i | Units Equivalent Unit Transferred in costs 15,400 5,00 ey IS. ] Raw materials 15,400 4.00 Sittin Conversion cost 13,300 3.00 ee . F 1 13 Calculate the cost of units transferred to finished goods inventory during May and the cost of Finishing Department's work in process inventory on May 31 15S $ A. P107,100 P25,200 C. . P126,000 6,300 B. 107,100 P 6,300 D. — P126,000 25,200 BMW Autohaus is engaged in the production of a standard type of electric motor. Manufacturing costs for April totalled P860,000. At the beginning of Apri, inventories appeared as follows: j Motors in production, estimated 80% complete (2,500 units) 320,000 Motors on hand and in finished goods (1,200 units) P192,000 = During the month, 5,500 completed units were placed in finished stock. At the end of April, inventories etal oe i ot ‘Motors in.production, estimated/60%)complete 1,000 units sy Motors on hand, completed and infinished goods 1,400 units r The company uses FIFO costing for production and goods sold. In costing finished goods, the unit cost for units completed from beginning work in process inventory is kept separate from the unit cost of motors started and completed during the month. Compute the cost of. ‘A. P861,000 B, P858,500 C. P669,000 ~~. P776,000 Maxwell Company had 3,000 units in work in process at April 1, 2011, which were 60% complete as to ‘conversion cost. During April, 10,000 units were completed. At April 30, 4,000 units remained in work in process, which were 40% complete as to conversion cost. Direct materials are added at the beginning of the process. Ht How many units were started during April? y A. 9,000 B, 9,800 c. 10,000 D. 11,000 Questions 22 and 23 are based on the following: 22. 23. Iceland Company manufactures top-of-the-line ice skates in a five-production-department process. Department 3 had no beginning work in process inventory and transferred in 18,000 units from Department 2, each with an equivalent unit cost of P12.50. Within: Department 3, unit costs for direct materials, direct labor, and factory overhead (applied) were P8.00, P9.75, and P4.00, respectively. Direct materials in Department 3 are added at the beginning. Department 3 has 4,800 units in ending work in process inventory which are 65% complete as to Conversion costs. “°° a, If 620 spoiled units were removed from Department 3 at Iceland's inspection point where conversion costs were 45% complete, what was the total spoilage cost, assuming spoilage is handled as @ ‘separate element of cost? ™ 4s1 A. P8,796.25 B. P11,325.25 C. P13,818.25 -D. P 16,546.25 ‘At leeland's Department 3 inspection point, which is located Halfway through Department 3's conversion process, 1,200 spolled units were removed from production. Normal spoilage was 800 units, If total spoilage cost was P32,850, how much of that amount should be allocated to ending inventory? KPO B. P5821 ©. P7,320 D. P8760 1S © THe BSF ers(CRCACE/AFAR: SUMMARY QUIZZER 2 Page 6 of 10 24. 25. \ 26. A 27. The following information is available conceming the inventory and cost of goods sold accounts of Samsung Company at the end of the most recent year. Work in Finished _Cost of es ea Process Goods Goods Sold 150%" ¢ Direct materials 2,000 P 6,000 P12,000 > Direct labor 2,000 16,000 32,000 Applied factory overhead 2,000 16,000 32,000 Year-end balance 6.000 38.000 »\:-5976.000 Applied Factory Overhead has already closed tc Factory Overhead Control. In all previous years, over- or underapplied factory overhead was treated as an adjustment to income or expense. Beginning inventories of the most recent year were insignificant. Calculate the amount-of Finished Goods account presented in the balance sheet for the year assuming an overapplied ofP'12,000 38 to be allocated to inventories and cost of goods sold in proportion to the applied overhead in those accounts. A. P41,800, B. P34,200 ©. P34,160 d. P41,840 ‘Sony Manufacturing Company produces CB stereos for cars. The following cost information is available for the period ended December 31, 2014: Materials put into production: P1,200,000, of which P800,000 was for direct materials. jv Factory labor costs for the period: P900,000, of which P250,000 was for indirect labor. 4D Factory overhead costs for utilities: P400,000. r Selling; general, and administrative expenses: P600,000. ‘Compute the factory overhead cost. A. P400,000 B. P1,700,000 C. P1,000,000 D. P1,050,000 Questions 26 and 27 are based on the following: RG Instrument Company manufactures gauges for construction machinery. The company has two production departments: Molding and Assembly. There are three service departments: Maintenance, Personnel, and Computer Aided Design (CAD). The usage of these service departments’ output and their budgeted costs during 2016 are as follows: - Provision of Service Output in 2016 (in hours of service) caine th Provider of Service User of Service Personnel Maintenance CAD Personnel - : - Maintenance 500 : - deo 9494 CAD 500 500 - Molding 4,000 3,500 | = 4,500 | ‘Assembly. 8000/7 4,000 - 1,500 | Total 0.000 = 8.000, 6,000 ‘The budgeted costs in RG Instrument Company's service departments during 2016 are as follows: Personnel, Maintenance) CAD Variable P 50,000" P 80,000 © P 50,000 Fixed 200,000 _150,000 — _300,000 Total 250,000: P230,000 ~ P350.000 Use the direct method to allocate RG Instrument Company's service department costs to its production departments. Determine the share of Molding Department A. 480,944 B. 463,125 C. P340,508 D. P349,056 Determine the proper sequence to use in allocating the firm's service department costs by the step-down method and use the step-down method to allocate the company's service department costs. Determine the share of Assembly Department, A. P340,664 B. P480,944 ©. Pa63,125 D. Pag9.4a2CRCACE/AFAR: SUMMARY QUIZZER 2 Page 7 of 10 28. ACE Corporation operates an ore processing plant. A typical batch of ore runs through the plant which yield three refined products: lead, copper, and manganese. At the split-off point, the intermediate products cannot be sold without further processing. The lead from a typical batch will sell for P20,000 after incurring additional processing costs of P8,000. The copper is sold for P40,000 after additional processing costs of P1,000. The manganese yield sells for P30;000 but requires additional processing costs of P6,000. Using the market value approach, the cost ratio is 80%. Lo 20-e The joint cost allocated to copper would be: 40-14 ‘A. P44,000 B>-P31,200 C. P9,600 D. P11,200 , Questions 29 and 30 are based on the following: Arlene Chemical Company manufactures two industrial chemical products in_a joint process. In May, 10,000 gallons of input costing P60,000. were processed at a cost of P'150,000. The joint process resulted ir 8,000-pounds of Resoline and 2,000 pounds of Krypto. Resoline sells at P25 per pound and Krypto sells for P50 per pound. Management generally processes each of these chemicals further in separable. processes to produce more refined chemical products..Resoline is processed separately at a cost of P5 ) per pound, The resulting product, Resolt, sells for Pa5 per pound. Krypto is processed separately ata cost of P18-ber pound. The resuiting produc, Krypite, sells for P8B per Pound. $0460 #210 x : Z Hp 1), 29 The joint cost share of product Kryptite using the net realizable value method would be: 9< 5 a. P126,000 b. P84,000 ~~ e, P140,000 d. P70,000 ~2T 30. Assuming that Arlene Chemical Company's management is considering an opportunity to process Kryptite further into a new product called Omega. The separable processing will cost P40 per pound, Packaging costs for Omega are projected to be PS per pound, and the anticipated sales price is Pt per pound. Should Kryptite be processed further into Omega? ‘A. Yes, because of an advantage of P22,000 B. No, because of a disadvantage of P10,000. i C. No, because of a disadvantage of P22,000. D. Yes, because of an advantage of P10,000. ‘A, 31. The Acura Company was totally destroyed by fire during June. However, certain fragments of its cost records with the following data were recovered: idle capacity variance, P12,660 favorable) spending variances, P8,790'unfavorable, and applied factory overhead, P162,340. Determine the budget allowance, based on capacity utilized. |()7. 340-12 L0= 154 A. P149,680 B. P175,000 C. 153,550 D. P171,130 32° Bugatti Corp. manufactures rafts for use in swimming pools. The standard cost for material and labor is 892 per raft. This includes 8 kilograms of direct material at a standard cost of(P50 per kilogram, and 6 ours of direct labor at P82)per hour. The following data pertain to November. © Work in process inventory on November 1: none > Sales to Caramel Company 140,000 9 21-15 Sales to Sneakers Corporation 240,000 > Pp Net income 20,000 ‘Operating income (excluding income from S3042R Caramel Company) 70,000 01 < Inventory on hand, December 31, 2016 S purchased from Caramel Company 48,000 - 107 purchased from Sneakers Corporation ? 42,000 Sneakers Corporation regularly prices its products at cost plus‘@40 percent markup for profit. Caramel Company prices its sales at cost plus.a 20 percent markup. The total sales reported by Sneakers and ‘Garamel include both intercompany sales and sales to nonaffilates. 43. The consolidated cost of sales for 2016 must be: A. P596,428 B. P616,428 Cc. P576,428 D. P536,428 44, The controlling interest net income for 2016 must be: CN 1 ~/"! = ey a 67,600 b. P70,000 ¢. P90,000 d. P86,000 {4 45. Blank Corporation owns 60 percent of the vating common stock of Grand Corporation. On December 1, 2018, Blank paid Grand P276,000 for dump trucks purchased by Grand on January 1,(2016. Both Saitanies use straight-line depreciation. The eliminating entry included in preparing consolidated financial statements at December 31, 2018, was: < ie 3 = ly Trucks ay = 23s + 24,090 3 Gain on sale of Trucks e 36,000 3 218 ‘Accumulated Depreciation 60,000 eo ‘What was the economic life of the trucks on January 1, 20167 : A. 15 years B. 12 years C. 18 years D. 10years + 46. Sharp Corporation holds 70 percent ownership of Jeremiah Enterprises. On January 1, 2016 Jeremiah Enterprises paid Sharp Corporation P400,000 for a truck that Sharp Corporation had purchased for- >= |] P450,000 on January 1,,2072) The truck has a 15-year total economic life and no residual value. Both 4, companies use straightine depreciation. *) ¥s01 [Js PS. USO Hoey. [a.* 3 \- Give the eliminating entry in the consolidation workpaper prepared as of December 31, 2016, to remove the effects of the intercompany sale. 30 A. Gainonsale 70,000 C. Gain on sale 70,000 Truck 70,000 Truck 50,000 j sews f + ‘Accum, Depreciation 113,636 - '< B. Investment in $ 63,638 Depreciation 6,364 yy IS) Truck 50,000 ‘Accum. Depreciation 107,272 D. Gain on sale 70,000 sale Depreciation 6,364 Truck 50,000 Pe k(CRE-ACE/AFAR: SUMMARY QUIZZER 2 Page 10 of 10 47. Toshiba Corp, has two divisions — A and 8. A has a job order cost system and manufactures B machinery on special order for unrelated customers. B has a process cost system and manufacturers product Zee which is sold to A as well as to unrelated customers. A's work-in-process account at April 30, 2016, comprised the following: 1S fas, Balance, April 1 24,000 Direct material (including transferred-in costs) 80,000 - a » Direct labor 60,0000 12 7, Factory overhead 54,000 = Transferred to finished goods (200,000) A applies factory overhead at 90% of direct labor costs. Job nos. 125, which was the only job in process at April 30, has been charged with factory overhead of P4,500) B's cost to manufacture Product Zee is P3.00 per unit, which is sold to A for P5.00 per unit and to unrelated customers for 6.00 per unit. Direct materials (including transferred-in costs) charged to Job No. 125 amounted to: a. P5,000 b. P8500 c. P13,500 d. P18,000 p 48. Metro Deal Company adds materials at the beginning of the process in department M. Data concerning the materials used in March 2016 production are follows’ Units Work-in-process at March 1 16,000 Started during March 34,000 ‘Completed and transferred to next department during March 36,000 ~ Normal spoilage incurred 4,000* Work-in-process at March 31 10,000 - Using the weighted-average method, the equivalent units for the materials unit cost calculations are: A. 30,000 5 re B. 34,000 " c 40000 1p Mb. D. 46,000 © 49. Agoda Company uses a standard cost system. For the month of, April 2016, total overhead is budgeted at P80,000 based on the normal capacity of 20,000 direct-labor hours. At standard each unit of finished Product requires. 2 difect labor hours. The folowing data are available for the April 2016. production activity : “ 2 Equivalent units if product 9,500 © 2 = 117 24> Fe Direct-labor hours worked 19,500 Actual total overhead incurred P79,500 What amount should Agoda credit to the applied factory overhead account for the month of April 2016? 7 A P76,000 + B. P78,000 Cc. P79,500 D. P80,000 50. An entity has a subsidiary that operates in a foreign country. The subsidiary issued a legal notice of a dividend to the parent entity's financial statements. The exchange rate at that date was 2 baht = P1 The functional currency of the entity is the peso. At the date of receipt of the dividend the exchange rate had moved to 3 baht = P1. The exchange difference arising on the dividend would be treated in which way in the financial statements? ubiaels ‘ t ‘A. No exchange difference will arise as it will be eliminated on consolidation. B. An exchange difference of P400,000 will ke taken to equity. ©. An exchange difference of P400,000 will be taken to the parent entity's income statement and the D. group income statement, An exchange difference of P400,000 will be taken to the parent entity's income statement only. rey/ede09232016