COLLEGE OF ACCOUNTANCY

FINAL EXAMINATION
ACCTG 207A
INSTRUCTIONs:
Make a summary of answer and show your solutions on a separate sheet of paper
no solution no points; and
send to my messenger account the picture of the summary of answers and solutions.
Multiple Choice
A, B and C are partners in an accounting firm. Their capital account balances at year-end were: A,
P90,000; B, P110,000; C, P50,000. They share profits and losses in a 4:4:2 ratio, after the following
special terms:
a. Partner C is to receive a bonus of 10% of the net income after the bonus.
b. Interest of 10% shall be paid on that portion of a partner’s capital in excess of P100,000.
c. Salaries of P10,000 and P12,000 shall be paid to partners A and C, respectively.
1. Assuming a net income of P44,000 for the year, the total profit share of partner C would be:
a. P7,800 c. P19,400
b. P16,800 d. P19,800
A local partnership has assets of cash of P5,000 and a building worth P80,000. All liabilities have
been paid and the partners are all insolvent. The partners capital accounts are as follows Harry
P40,000, Landers P30,000 and Waters 15,000. The partners share profits and losses 4:4:2.
2. If the building is sold for P50,000, how much cash will Waters receive in the final settlement?
a. P5,000.
b. P9,000.
c. P18,000.
d. P28,000.
e. P55,000.
ABC Construction uses the percentage-of-completion method for long-term construction contracts.
A specific job was begun in 2003 and completed in 2005. The contract price was P14,000,000 and
cost information as of each year –end is given below:
2003 2004 2005
End of year estimated cost to complete P4,000,000 P2,000,000 -
Annual cost incurred 4,000,000 4,000,000 P1,200,000
3. Assuming ABC correctly recorded gross profit in 2003, how much gross profit should the
company record in 2004?
a. P -0-
b. P3,000,000
c. P 200,000
d. P3,200,000
4. How much is the construction in progress account in 2004?
a. 11,200,000
b. 9,200,000
c. 8,000,000
d. 0
5. How much is the construction in progress account in 2004?
a. 11,200,000
b. 14,000,000
c. 8,000,000
d. 0
 ABC Company operates a branch in Cebu City. Selected accounts taken from the May 31, 2016
statements of ABC and its branch follow:
Head Office Branch
Sales P380,000 P353,000
Shipments to branch 150,000 -
Branch merchandise mark- 39,500 -
up
Inventory, June 1, 2015 24,000 16,000
Purchases 300,000 60,000
Shipments from home - 187,500
office
Inventory, May 31, 2016 28,000 20,700
The branch ending inventory included items costing P8,700 that were acquired from outside
suppliers.
6. The realized mark-up on branch merchandise that would be recognized by the home office is
a. P36,000
b. P36,700
c. P37,100
d. P38,040
e. None of these
7. How much is the cost of sales presented in the Branch books?
a. P263,500
b. P222,800
c. P204,500
d. P242,800
e. None of these
8. How much is the mark-up from beginning inventory of the Branch?
a. P2, 400
b. P4, 140
c. P3, 200
d. P38,300
e. None of these
9. How much is the combined ending inventory of ABC Company?
a. P48,700
b. P46,300
c. P38, 300
d. 47, 800
e. None of these
ABC, a partner in the Financial Brokers Partnership, has a 30 percent share in partnership profits
and losses. ABC's capital account had a net decrease of P100,000 during 2008. During 2008, ABC
withdrew P240,000 as withdrawals and contributed equipment valued at P50,000 to the
partnership.
10. What was the net income of the Financial Brokers Partnership for 2008?
a. 633,334
b. 466,666
c. 300,000
d. 190,000
ABC Furniture uses the installment sales method. No further collections could be made on an
account with a balance of P12,000. It was estimated that the repossessed furniture could be sold as
is for P3,600, or for P4,200 if P200 were spent reconditioning it. The gross profit rate on the original
sale was 40%.
11. The loss on repossession was
a. P3,200.
b. P3,000.
c. P8,000.
 d. P8,400.
The Kareen Company owns 75% of The Goldy Company. The following figures are from their
separate financial statement:
Kareen Trade receivable P 1,040,000, including P 30,000 due from Goldy.
Goldy Trade receivable P 215,000, including P 40,000 due from Kareen.
12. Under PAS 27 Consolidated and separate financial statements, what figure should appear for
trade receivables in Kareen’s consolidated statement of financial position?
a. 1,235,000
b. 1,215,000
c. 1,185,000
d. 1,255,000
On January 1,2016 statement of financial position ABC Corporation at book and market values
were as follows:
Book value Fair value
Current asset 1,200,000 1,125,000
Property and Equipment 1, 350,000 1,500,000
Current liabilities 450,000 450,000
Long term liabilities 750,000 690,000
Common stock 150,000
Additional paid in capital 300,000
Retained earnings 900,000
Wall Corporation paid 1,425,000 in cash for 80% of ABC corporation’s Common stock.
13. If the fair value of Non-controlling interest is assessed to be P345,000, how much is the
goodwill?
a. 237,000
b. 285,000
c. 297,000
d. 420,000
e. 0
14. How much goodwill attributable to parent?
a. 48,000
b. 237,000
c. 285,000
d. 420,000
e. 0
15. If non-controlling interest is based on proportionate share in fair value of net asset of ABC
Corporation, how much goodwill attributable to Subsidiary?
a. 48,000
b. 285,000
c. 59,250
d. 0
Three joint operators are involved in a joint operation that manufactures ships Chandlery. At the
beginning of the year the joint operation held P50,000 cash. During the year the joint operation
incurred the following expenses: wages paid P20,000, overhead accrued P10,000. Additionally,
creditors amounting to P40,000 and the joint operators contributed P15,000 cash each to the joint
operation.
16. How much is the balance of Joint operation-cash account at the end of the year?
a. 5,000
b. 25,000
c. 35,000
d. 75,000
Sunlight Co. Started operations on January 1, 2018, selling home appliances on instalment basis.
For 2018 and 2019, the following information are available:
2018 2019
Installment Sales P1,200,000 P1,500,000
Cost of Installment sales 720,000 1,050,000
Collections:
For 2018 sales 630,000 450,000
For 2019 sales 900,000
On 2019, an instalment sales account balance of 2008 was defaulted and the merchandise, with
current market value of P15,000, was repossessed. The account balance defaulted was P24,000.
17. The gross profit rate in 2019?
a. 30%
b. 40%
c. 35%
d. 45%
18. The balance of the deferred gross profit account as at the end of 2019 was
a. 218,400
b. 228,000
c. 275,000
d. 450,000
19. How much is the gain or loss on repossession?
a. Gain P600
b. Loss P1,800
c. Loss P9,000
d. Gain P1,800
A local partnership has assets of cash of P5,000 and a building worth P80,000. All liabilities have
been paid and the partners are all insolvent. The partners capital accounts are as follows Harry
P40,000, Landers P30,000 and Waters 15,000. The partners share profits and losses 4:4:2.
20. If the building is sold for P50,000, how much cash will Harry receive in the final settlement?
a. P5,000.
b. P9,000.
c. P18,000.
d. P28,000.
The terms of a partnership agreement provide that one of the partners is to receive a salary
allowance of P30,000, plus a bonus of 20 percent of income after deduction of the bonus and the
salary allowance.
21. If income is P150,000, the bonus should be:
a. P18,000
b. P20,000
c. P24,000
d. P30,000
Emily, Daniel and Victoria have capital balances of P120,000, P200,000 and P72,000, respectively
and they share profits in the respective ratio of 4:2:1. Daniel received P104,000 as a result of the
liquidation of the partnership.
22. Loss on asset realization is
a. P 236,000
b. P 336,000
c. P 288,000
d. P 264,000
A sale on installment basis was made in 2014 for P16,000 at a gross profit of P5,600. At the end of
2014, when the installment account receivable had a balance of P7,000, it was ascertained that the
customer would be unable to make further payments. The merchandise was then repossessed and
was appraised at a value of P3,000.
23. The loss on repossession was
a. 231 b. 1,550 c. 2,600 d. 3,000
Blue construction Co. has two projects for which it reported, as of December 31, 2012, the following
information:
Project a Project b
Contract price P4, 800, 000 P860,000
2011: cost incurred 3, 400, 000
Percentage completed 75%
2012: cost incurred P1, 250, 000 P140, 000
Percentage completed 25% 15%
24. Using the percentage of completion method of revenue recognition, gross profit on project A
to be presented in 2011 would be:
a. P 200, 000
b. P300, 000
c. P400, 000
d. P900, 00
25. How much is the construction in progress on December 31,2011 from project A?
a. 200,000
b. 3,600,000
c. 3,400,000
d. 4,800,000

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