Accounting for Special Response: Safe payment schedule

Transactions and Cost Score: 1 out of 1 Yes

Accounting and Control
Question 5
 Submissions These are liabilities that are entirely
 Instructions covered by the pledged assets.
Response: Fully secured liabilities
Submissions Score: 1 out of 1 Yes
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Question 6
Question 1 This method recognizes revenue based
It is the account that the partnership on the direct measurement of the value
maintains for each partner where initial to the customer of the goods or services
investments of each partner are transferred to date relative to the
recorded. remaining goods or services promised
under the contract.
Response: Capital
Response: Output method
Score: 1 out of 1 Yes
Score: 1 out of 1 Yes
Question 2
It occurs when a new partner joins the Question 7
partnership by investing an asset to the It is the third step in the five-step model
partnership. under PFRS 15 Revenue from Contracts
with Customers.
Response: Admission by investment
Response: Determine the transaction
Score: 1 out of 1 Yes price

Question 3 Score: 1 out of 1 Yes

If the partnership agreement does not
specify how income is to be allocated,
the profit and loss should be allocated:
Response: According to their capital
contribution
Score: 1 out of 1 Yes
Question 4
This method of installment liquidation is
used to determine the safest amount of
cash that can be distributed to the
partners as of an installment period.
Question 8
In accounting for consignment sales,
sales revenue should be recognized by
the:
Response: Consignor when notification
is received that the consignee has sold
the goods
Score: 1 out of 1 Yes
Question 9
If the trade-in value is less than the fair
value of the asset, there is:
Response: Underallowance capital and profits for an investment of
P80,000. The new partnership began
Score: 1 out of 1 Yes
with a total capital of P300,000.
Immediately after Rosbert’s admission,
Question 10 Mark’s capital should be:
It is maintained in the branch’s books as
an equity account. Response: P108,000
Response: Home office Score: 1 out of 1 Yes
Score: 1 out of 1 Yes
Question 13
Gates and Jobs have stipulated in their
Question 11 partnership agreement the following:
On March 1, 20x1, Ana, Ben, and Ced
formed a partnership by combining their
a. Salary allowances of P60,000 each.
separate business proprietorships. Ana
b. 20% bonus to Gates out of the net
contributed cash of P100,000. Ben
income after deducting the salary
contributed property with a P72,000
allowances, the bonus being treated as
carrying amount, a P80,000 original
an expense
cost, and P160,000 fair value. The
c. Remaining profit to be shared equally.
partnership accepted responsibility for
the P70,000 mortgage attached to the
The partnership has produced a profit of
property. Ced contributed equipment
P360,000 after the salary allowances
with a P60,000 carrying amount,
but before the bonus. What amount is
P80,000 original cost, and P110,000 fair
the share of Jobs in the profit?
value. The partnership agreement
specifies that profits and losses are to Response: P150,000
be divided equally but is silent regarding
Score: 0 out of 1 No
capital contributions. Which partner has
the largest capital account balance on
Question 14
March 1, 20x1?
As of December 31, the books of XYZ
Response: Ced
Partnership showed the following capital
Score: 1 out of 1 Yes balances:

Question 12 X, Capital P40,000

Mark and Darrel are partners who share
profits and losses in the ratio of 6:4,
respectively. On May 1, 20x1, their
respective capital accounts were as
follows:
Mark – P120,000; Darrel – P100,000.
On that date, Rosbert was admitted as a
partner with one-third (1/3) interest in
Y, Capital 25,000
Z, Capital 5,000
The partners’ profit and loss ratios were
3:2:1, respectively. The partners decided
to dissolve and liquidate. They sold all
the noncash assets for P37,000 cash.
After settlement of all liabilities
amounting to P12,000, they still have
P28,000 cash left for distribution.
Assuming that any partner’s capital debit
balance is uncollectible, the share of Y
in the P28,000 cash for distribution
would be:
JED Construction Company applies the
percentage of completion in accounting
for its revenues. You are required to
compute for the missing details below:
20X1 20X2

Contract price P20,000,000

Response: P17,800
Gross profit
Score: 0 out of 1 No 400,000 P1,400,000
(loss)

Question 15 Cost Incurred 3,600,000 ?

Green Company has suffered significant
losses that made it file for bankruptcy
and started to liquidate. The following
are the details pulled out from the
statement of affairs:
Assets
Assets pledged to partially secured creditors
Total Free Assets
Liabilities
Priority Liabilities
Partially secured liabilities
Unsecured Liabilities
What is the cost incurred in 20x2?
Response: P6,600,000
Score: 1 out of 1 Yes
Question 17
On January 1, 20x1, an entity granted a
franchise to a franchisee. The franchise
agreement required the franchisee to
pay a nonrefundable upfront fee in the
amount of P480,000 and ongoing
payment of royalty equivalent to 10% of
the sales to the franchisee. The
franchisee paid the nonrefundable
upfront fee on January 1, 20x1.
In relation to the nonrefundable upfront
fee, the franchise agreement required
the entity to render the following
performance obligations:

What is the amount paid to unsecured a. To construct the franchisee’s stall with
creditors without priority? a stand-alone selling price of P240,000.
Response: P124,000 b. To deliver 10,000 units of raw
materials to the franchisee with a stand-
Score: 1 out of 1 Yes alone selling price of P300,000.
c. To allow the franchisee to use the
Question 16 entity’s tradename for 10 years starting
January 1, 20x1, with a stand-alone
selling price of P60,000.
 A company uses the installment method
On June 30, 20x1, the entity completed of accounting to recognize income, and
the construction of the franchisee’s stall. pertinent data are as follows:
On December 31, 20x1, the entity was
able to deliver 3,000 units of raw 20x1
materials to the franchisee. For the year
ended December 31, 20x1, the Installment sales P300,0
franchisee reported sales revenue
amounting to P200,000.
Cost of sales 225,0
The entity had determined that the
performance obligations are separate Balance of gross profit at year-end
and distinct from one another.
20x1 52,5
What is the total franchise fee revenue
recognized for the year ended 20x2
December 31, 20x1?
Response: P268,800
Score: 0 out of 1 No What is the total realized gross profit in
20x2?
Question 18 Response: P37,500
Mirana Manufacturing Co. consigned 12
Xtreme colored TV sets costing P9,000 Score: 0 out of 1 No
each to Medusa Trading Corporation.
The freight charges were paid by the Question 20
consignor amounting to P600. Medusa A company uses the installment method
Trading sold eight (8) sets and remitted of accounting to recognize income, and
P82,600 to the consignor after deducting pertinent data are as follows:
the following from the selling price of the
sets sold: 20x1
Commission on selling price – 12%;
Installment sales P300,0
Selling expenses – P1,200; cost of
antennae given free – P1,400; delivery
Cost of sales 225,0
and installation – P2,800

What is the net income of Mirana Balance of gross profit at year-end

Manufacturing Co.?
20x1 52,5
Response: P10,600
Score: 0 out of 1 No 20x2

Question 19
What is the balance of Installment
Receivable as of December 31, 20x3?
Response: P270,000
Score: 0 out of 1 No
Question 21
Malolos Corporation bills its newly
established branch for merchandise at
140% of the cost. At the end of its first
month, the branch reported the
following:
Merchandise from the home office, at
billed price – P28,000;
Merchandise purchased locally by the
branch, P10,000;
Inventory, January 31, of which P2,000
are of local purchases, P9,000;
Net sales for the month, P43,500.
What is the branch ending inventory at
cost?
Response: P7,000
Score: 1 out of 1 Yes
Question 22
At the end of 20x1, the branch reported
an inventory of P15,625. The home
office bills this branch at 125% of the
cost. During 20x2, goods costing
P300,000 were shipped to the branch.
The allowance for overvaluation after
adjustment shows a balance of P16,250
at the end of the year.
What is the realized markup on
shipments sold to external parties?
Response: P63,125
Score: 0 out of 1 No
Question 23
Eraserhead Corp. has its main office in
Manila City and established a branch in
Cebu. During 20x1 its first year of
operations, the home office in Manila
shipped goods to the branch in Cebu at
a total billing price of P303,050, which
was 10% above the cost. On December
31, 20x1. The branch reported a net
income from its operations of P5,500
and an ending inventory of P61,050.
How much is the net income (loss) of
the branch insofar as the home office is
concerned?
Response: P16,500
Score: 0 out of 1 No
Question 24
Matt and Tom, who share profits and
losses equally, decided to liquidate their
partnership when their net assets
amounted to P260,000 and capital
balances of P170,000 and P90,000,
respectively. If noncash assets were
sold for an amount equal to its book
value, what amount of cash should Matt
and Tom receive, respectively?
Response: P130,000; P130,000
Score: 0 out of 1 No
Question 25
The franchisor should recognize the
continuing franchise fees as:
Response: Revenue when the services
are performed
Score: 1 out of 1 Yes
Question 26
Which of the following components of
the value chain is described by the
purchase of mushrooms by a canning
plant for mushroom soup products?
Response: Production Response: Variable Costs
Score: 1 out of 1 Yes Score: 1 out of 1 Yes

Question 27 Question 32
Which of the following components of Which of the following does not require
the value chain is described by the cost maintaining a stock card for the raw
of handheld computers used by the materials?
transport staff in serving major
Response: Periodic Inventory System
supermarket accounts?
Score: 1 out of 1 Yes
Response: Distribution
Score: 1 out of 1 Yes Question 33
DEF Manufacturing has the following
Question 28
account balances at the beginning of the
Which of the following components of
current year:
the value chain is described by the
salaries of food technologists exploring
Raw Materials
the feasibility of a carbonara sauce that P 25,000.00
has nominal calories? Inventory

Response: Research and Development Work in Process

P 75,000.00
Inventory
Score: 1 out of 1 Yes

Question 29 Finished Goods

P 60,000.00
Inventory
Which of the following combines direct
material and direct labor actual costs
with the overhead assigned using a
predetermined rate/s?
Purchased of Raw Materials:
Response: Normal Cost System
Score: 1 out of 1 Yes On account

Question 30
Which of the following activities add
value to the production of vaccines?
Response: Ordering raw materials for
the vaccine
Score: 1 out of 1 Yes
Question 31
Which of the following are constant
amounts per unit basis as activity
changes within a relevant range?
Cash
Issuance of Raw Materials to the production departmen
indirect materials.
Which of the following is the amount
to be reported as raw materials
inventory for January 31?
Response: P75,000.00
Score: 1 out of 1 Yes
Question 34 Finished Goods
P 270,000.00
ABC Manufacturing has the following Inventory
account balances at the beginning of the
current year: Additional information:

Issuance of Raw Materials to the production departmen

Raw Materials indirect materials.
P 87,500.00
Inventory
Direct Labor
Work in Process
P 262,500.00
Inventory
Indirect Labor
Finished Goods
P 210,000.00 Overhead Charged
Inventory
At the end of the month:

Unfinished jobs
Company payroll for the month:
Unsold finished goods
Direct Labor
Which of the following is the amount
Indirect Labor
to be reported as total manufacturing
costs?
Issuance of Raw Materials to the production department, 10% are
indirect materials. Response: P801,000.00
Score: 1 out of 1 Yes
Which of the following is the amount
to be reported as the total prime
Question 36
costs?
XYZ Manufacturing has the following
Response: P493,500.00
account balances at the beginning of the
Score: 1 out of 1 Yes current year:

Question 35 Raw Materials

P 112,500.00
Inventory
XYZ Manufacturing has the following
account balances at the beginning of the
Work in Process
current year: P 337,500.00
Inventory
Raw Materials
P 112,500.00 Finished Goods
Inventory P 270,000.00
Inventory
Work in Process
P 337,500.00 Additional information:
Inventory
 Issuance of Raw Materials to the production department,
Indirect
10%Labor
are
indirect materials.
Overhead Charged
Direct Labor
At the end of the month:
Indirect Labor
Unfinished jobs
Overhead Charged
Unsold finished goods
At the end of the month:
Which of the following is the amount
Unfinished jobs to be reported as total goods
available for sale?
Unsold finished goods Response: P1,239,750.00
Which of the following is the amount Score: 1 out of 1 Yes
to be reported as the cost of goods
manufactured? Question 38
Response: P969,750.00 XYZ Manufacturing has the following
account balances at the beginning of the
Score: 1 out of 1 Yes
current year:
Question 37
Raw Materials
P 112,500.00
XYZ Manufacturing has the following Inventory
account balances at the beginning of the
current year: Work in Process
P 337,500.00
Inventory
Raw Materials
P 112,500.00
Inventory Finished Goods
P 270,000.00
Inventory
Work in Process
P 337,500.00
Inventory Additional information:

Finished Goods Issuance of Raw Materials to the production departmen

P 270,000.00 indirect materials.
Inventory

Additional information: Direct Labor

Issuance of Raw Materials to the production department,

Indirect
10%Labor
are
indirect materials.
Overhead Charged
Direct Labor
At the end of the month:

Unfinished jobs
Unsold finished goods
Which of the following is the amount
to be reported as the cost of goods
sold?
Response: P1,037,250.00
Score: 1 out of 1 Yes
Question 39
ABC Development builds replicas of
residences of famous and infamous
people. The company is highly
automated, and the new accountant-
owner has decided to use machine
hours as the basis for predicting
maintenance costs. The following data
are available from the company’s most
recent eight (8) months of operations:
Machine
Month
Hours
1 275
2 319
3 209
4 341
5 418
6 363
7 451
8 385
Using the high-low method, which is
the change in cost compared to the
change in activity within the relevant
range?
Response: Machine Hours 242;
Maintenance Costs P 2,475.00
Score: 1 out of 1 Yes
Question 40
DEF Development builds replicas of
residences of famous and infamous
people. The company is highly
automated, and the new accountant-
owner has decided to use machine
hours as the basis for predicting
maintenance costs. The following data
are available from the company’s most
recent six (6) months of operations:
Machine Maintenance
Month
Hours Costs
1 289 P 5,783.00
Maintenance
2 319 P 6,176.25
Costs
3 344 P 5,041.88
P 4,048.00
4 334 P 6,478.75
P 4,620.00
5 387 P 7,272.81
P 2,970.00
6 350 P 6,327.50
P 5,060.00
Using the high-low method, the
P 6,215.00
variable cost per unit is P15.20.
Which of the following are the fixed
P 4,840.00
costs of the highest and lowest level
of activity?
P 5,445.00
Response: P 1,782.82
P 5,005.00
Score: 0 out of 1 No
Question 41
SOS Development builds replicas of
residences of famous and infamous
people. The company is highly
automated, and the new accountant-
owner has decided to use machine
hours as the basis for predicting
maintenance costs. The following data
are available from the company’s most
recent four (4) months of operations:
Machine
Maintenance
Month
Hours
Assuming that the company uses FIFO,
which will be the company’s cost of
goods sold for the 500 items sold in
202b?
Response: P4,800.00
Score: 0 out of 1 No
Question 43
A company purchased merchandise to
be resold at increasing costs during the
year 202b. The purchases were made at
the following costs:

1 460 Jan. 01,

P 6,836.50
202b
200 units @ P 9.00
2 399 (from
P 5,324.00
202a)
3 496 P 5,989.50
Jan. 25,
202b 300 units @ P10.00
4 424 P 5,505.50
purchase
Using the high-low method, which of
June 20,
the following is the variable cost per
202b 400 units @ P11.00
unit?
purchase
Response: P6.86
Oct. 10,
Score: 1 out of 1 Yes
202b 400 units @ P12.00
purchase
Question 42
A company purchased merchandise to Assuming that the company uses FIFO,
be resold at increasing costs during the which of the following will be the
year 202b. The purchases were made at company’s cost of goods sold for the
the following costs: 1,000 items sold in 202b?
Response: P10,400.00
Jan. 01, 202b (from 202a) 200 units
Score: 0 out of 1 No
Jan. 25, 202b purchase 300 units
Question 44
June 20, 202b purchase 400 units Which of the following is the
computation of overtime during rest day
Oct. 10, 202b purchase 400 units falling on a special public holiday?
Response: 150% x rate per hour
Score: 1 out of 1 Yes
Question 45
ABC Company has provided the
following information:
Estimated MOH P 405,000.00 Estimated MOH
Materials cost P 675,000.00 Materials cost
DL cost (100,000
P 225,000.00
DLH)
Machine hours
Units produced (est.)
Which of the following is the
predetermined rate based on materials
cost?
Response: 60%
Score: 1 out of 1 Yes
Question 46
DEF Company has provided the
following information:
Estimated MOH
Materials cost
DL cost (100,000 DLH)
Machine hours
Units produced (est.)
Which of the following is the
predetermined rate based on direct
labor hours?
Response: P4.05
Score: 1 out of 1 Yes
Question 47
SAS Company has provided the
following information:
P 405,000.00
P 675,000.00
DL cost (100,000 DLH) P 225,000.00
Machine hours 22,500
22,500
Units produced (est.) 90,000
90,000
Which of the following is the
predetermined rate based on units of
production?
Response: P4.50
Score: 1 out of 1 Yes
Question 48
The conventional system assigns the
Product Development Department’s
human resources costs to products
using direct labor hours (DLHs). The
department had 20 employees, and
P 405,000.00
incurred P500,000 (or P25,000 per
employee) of human resources costs in
P 675,000.00
20CY. During the same year, expected
DLHs had been 150,000, and 15,000
P 225,000.00
units of B1430 were produced using
5,000 DLHs. Using the traditional
costing method, which of the following is
the production cost per unit for product
B1430?
Response: 1.11
Score: 1 out of 1 Yes
Question 49
Parfum Center reported the following
information regarding its inventories:

Products in the beginning WIP Inventory (40% complete as to labor and overhead or
conversion)

Products started during the current period

Products completed and transferred to FG Inventory

Products in ending WIP Inventory (80% complete as to labor and overhead or

conversion)

Which of the following is the amount

to be reported as the total physical
units to account for?
Response: 678,810
Score: 1 out of 1 Yes

Question 50
Woody and Citrus, Inc. reported the
following information regarding its
inventories:

Products in the beginning WIP Inventory (40% complete as to labor and overhead or
conversion)

Products started during the current period

Products completed and transferred to FG Inventory

Products in ending WIP Inventory (80% complete as to labor and overhead or

conversion)

Which of the following is the amount

to be reported as the physical units
accounted for?
Response: 678,810
Score: 1 out of 1