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Practical Accounting Problems 2 RE HERMOSILLA/BN CASTUCIANO
1st Preboard Examination - Solutions October 2007

1. The answer is letter A

Cost Method
200,000 – ( 30,000 x 20% ) = P 194,000
Equity Method
200,000 + ( 30,000 – 10,000 ) – 36,000 = P 184,000
2. The answer is letter D

3. The answer is letter D

Share in Net Loss ( 100 T x 25% ) 25,000
Amortization ( 150,000 x 10% ) 15,000
Investment Loss 40,000

4. The answer is letter B

Acquisition Cost 550,000 or BV ( 1,600 + 100 – 120 ) 25%
395,000
Share in NI ( 200 T – 100 ) 25% 25,000 UE 150,000

Dividends ( 120 T x 25% ) (30,000) CV

545,000
CV 545,000

5. The answer is letter A

CNI
PL NI for the year 300,000
SNI ( 120,000 x 4/12 ) 40,000
Share in NI in 8 months
January to August 31 ( 120 T x 8/12 x 25% ) 20,000
CNI 360,000

6. The answer is letter B

MINI
( 120 t x 4/12 ) 40% 16,000
7. The answer is letter D

8. The answer is letter B ( 40% direct holdings + [ ( 80 x 15% ) ] = 52%

9. The answer is letter B

10. The answer is letter C

Total COS of T & S 800,000
UP beg ( 20 T x 30% ) ( 6,000)
Inter – Co. Sales (110,000)
UP – end ( 30 T x 30% ) 9,000
Consolidated COS 693,000
11. The answer is letter D
Total Amortization Expense per books 190,000
Amortization ( 196T – 180T ) / 10 …….. 1,600
Total 191,600
12. The answer is letter A

13. The answer is letter B 40,000 = 25,000 + 10% (NI – B – S )

40,000 = 25,000 + 10% (NI – 15,000 – 125,000)
40,000 = 25,000 + .INI – 14,000
40,000 – 11,000 = . INI
CRC-ACE/P2: 1st Pre-board Solution (October 2007 Batch Page 2
29,000 = . INI
290,000 = NI

14. The answer is letter A

TCC TAC
R 200 (8)
J 100 (12) 88,000
G 100 20 120
400 0 400
Bonus to Gen = 5,000
Share of J in the residual profit ( 50,000 x 40 % ) = 20,000

15. The answer is letter D

Equity balance of E 50,000
Amount Paid 46,000
Bonus to C & D 4,000
C 120,000 + ( 3/5 x 4,000) 122,400
D 60,000 + ( 2/5 x 4,000) 61,600

16. The answer is letter A

R E H Total
Equity 32,000 24,900 15,000 71,900
Loss (12,000) ( ) ( ) ( 24,000)
CAFD 20,000 _________ _________ 47,900
Proceeds = 47,900 + 20,000 – 6,000 = 61,900

17. The answer is letter B

Dennis Brisbane Ric Total
15,000 10,000 10,000 35,000
(5,000) (5,000)
( 200 ) ( 200 )
100 50 50 200
9,900 10,050 10,050 30,000
(12,500) ( 6,250) (6,250) (25,000)
( 2,600 ) _________ _________ 5,0000

18. The answer is letter B

A B C D Total
60 40 30 10 140
(15) (15)
1.5 .900 .300 .300 3
46,500 40.900 30,300 10,300 128,000
(49,000) (29,400) (9,800) (9,800) (98,000)
ANS  ( 2,500) 11,500 20,500 500 30,000
2,500 ( 1,500) (.500) (500)
0 10T 20 0 30T

19. The answer is letter A

GI ( 150 – 40 + 10 ) 120,000
Expenses 20,000
NI 100,000
D E F
Share 50,000 30,000 20,000
E/D 40,000 (10,000) _______
Inc in Cap 90,000 20,000 20,000

20. The answer is letter C

J K L Total
88,000 62,000 56,000 206,000
CRC-ACE/P2: 1st Pre-board Solution (October 2007 Batch Page 3
58.6 ( 29,300) ( 29,300) ( 117.2 )
29,400 32,700 26,700 88,800

21. The answer is letter C

Allocation Made
R J V Total
Sal 20 15 - 35
Bonus 1667 - - 1.667
Bal 3333 6666 23,334 33,3333
Total 25,000 70T
Should be
Sal 20 15 - 35
Bal ( 500 ) ________ ________ ( 5 )
19,500 ________ ________ ( 5 )

Decrease by 5,500

22. The answer is letter D

Cap. bal. 350 200 90 640
Adj. ( 50 ) ( 30 ) (20) (100)
Bal. 300 170 70 540

TCC TAC
G 300 ( 30 ) 270
N 170 ( 8) 162
L 70 30 108
F 270  270
810  810 (540 / 2/3 )

23. The answer is letter A

Equity of retiring partner 200,000
Amount Paid 225,000
Share in Revaluation/GW 25,000
÷ .5
Total 50,000
x ½
Share of Remaining Partners 25,000
Cap. of Remaining Partner s 200,000
Total 225,000

24. The answer is letter D

25. The answer is letter C
26. The answer is letter C
27. The answer is letter D
28. The answer is letter B
29. The answer is letter C
30. The answer is letter D
31. The answer is letter C
32. The answer is letter B
33. The answer is letter D
34. The answer is letter B
35. The answer is letter D
36. The answer is letter D
37. The answer is letter C

38. The answer is letter A

TCC TAC
J 40 ( 3 ) 37,000
CRC-ACE/P2: 1st Pre-board Solution (October 2007 Batch Page 4
In 30 ( 1.8 ) 28,200
IZ 20 ( 1.2 ) 18,800
R 30 6 36
120 0 120 [ 90/ (1 – 5/6 x 30 ) ]

39. The answer is letter C

146, 000 – 106,000 + 2,000 = P 42,000

40. The answer is letter D

( 39,386 – 4,286 ) / .3 = P 117,000

41. The answer is letter A

COI - 40,000
FV of NA ac’d 33,880
GW 6,120

42. The answer is letter D or 100% of Subsidiary SHE.

43. The answer is letter A

Total NI ( 60 + 30 ) 90,000
Amortization
30,000 / .6 = 50,000 / 15 ( 3,333 )
12,000 / .6 = 20,000 / 40 ( 500 )
CNI P 86,167

44. The answer is letter B

COST 200,000
Share in NI ( 120 T x 60 % ) 72,000
Div ( 70 T x 60 % ) ( 42,000 )
Amortization
8,000 + ( 4/15 x 30 T ) + ( 4/40 12T ) ( 17,200 )
CV 212,800

45. The answer is letter A

Net Assets FV 1,300,000/100 = 13,000 P/S shares

GW
Annual NI 481,000
Normal Earnings 195,000
Excess 286,000
÷ .2
GW to be issued C/S 1,430,000
x 30%
Prem. payable in cash 429,000

reh/cel