Professional Documents
Culture Documents
PROBLEM 1
STATEMENT OF FINANCIAL POSITION
The bookkeeper for Maguidanao Computers Inc., reports the following statement of financial
position amounting as of June 30, 2020.
(f) Ordinary shares were originally issued for P3,910,000, but the losses of the company for the
past years were charged against share premium.
Based on the above and the result of the audit, determine the adjusted amounts of the following:
1. Current assets
a. 2,462,000
b. 2,440,500
c. 2,477,000
d. 2,435,500
2. Noncurrent assets
a. 5,490,000
b. 5,511,500
c. 6,560,000
d. 6,264,000
3. Current liabilities
1
AUDITING PROBLEMS: FINANCIAL STATEMENTS AP-1009
REFRESHER COURSE-AUDITING PROBLEM: QUIZZERS
a. 1,401,000
b. 1,581,000
c. 1,602,500
d. 1,491,000
4. Noncurrent liabilities
a. 720,000
b. 810,000
c. 900,000
d. 880,000
5. Equity
a. 7,710,000
b. 8,750,000
c. 6,440,000
d. 5,666,000
SOURCE: REVIEWER IN AUDITING PROBLEMS, R. OCAMPO XXII Audit of FS Presentation PROBLEM
5
PROBLEM 2
STATEMENT OF COMPREHENSIVE INCOME
The alphabetical list of items that may be relevant in the preparation of a statement of
comprehensive income of Dadiangas Corporation is provided below:
Actuarial gains on defined benefit pension plans recognized outside profit or loss 1,333
Decrease in inventories of finished goods and work in progress 107,900
Depreciation and amortization expense 17,000
Employee benefits expense 43,000
Exchange differences gain on translating foreign operations 10,667
Finance costs 18,000
Gains on property revaluation 3,367
Income tax expense 32,000
Income tax relating to components of other comprehensive income 9,334
Loss for the year from discontinued operations 30,500
Other expenses 5,500
Other income 11,300
Raw material and consumables used 92,000
Revenue 355,000
Share of other comprehensive income of associates (unrealized loss on available-for-
sale financial assets) 700
Share of profit of associates 30,100
Unrealized gain on available-for-sale financial assets 26,667
Unrealized loss on derivatives in an effective cash flow hedge 4,000
Work performed by the entity and capitalized 15,000
Based on the above and the result of the audit, determine the following:
1. The profit for the year
a. 65,500
b. 64,800
c. 96,000
d. 281,300
2. The other comprehensive income for the year
a. 93,500
b. 32,700
c. 28,700
d. 28,000
3. Total comprehensive income for the year
a. 93,500
b. 92,800
c. 94,200
d. 28,000
SOURCE: REVIEWER IN AUDITING PROBLEMS, R. OCAMPO XXII Audit of FS Presentation PROBLEM
8
PROBLEM 3
STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT
2
AUDITING PROBLEMS: FINANCIAL STATEMENTS AP-1009
REFRESHER COURSE-AUDITING PROBLEM: QUIZZERS
Digos Company was organized on January 1, 2020. On the same date, 25,000, P100 par value,
ordinary shares were issued in exchange for property, plant and equipment valued at P3,000,000
and cash of P1,000,000. The following data summarize activities for 2020:
a. Profit for the year ended December 31, 2020 was P1,000,000.
b. Raw materials on hand on December 31, were equal to 25% of raw materials purchased.
c. Manufacturing costs were distributed as follows:
Materials used 50%
Direct labor 30%
Factory overhead 20% (includes depreciation of building, P100,000)
d. Goods in process remaining in the factory on December 31 were equal to 1/3 of the goods
finished and transferred to stock.
e. Finished goods remaining in stock on December 31 were equal to 25% of the cost of goods
sold.
f. Operating expenses were 30% of sales.
g. Cost of goods sold was 150% of the operating expenses total.
h. Ninety percent of sales were collected during 2020. The balance was considered collectible.
i. Seventy five percent of the raw materials purchased were paid for. There were no expense
accruals or prepayments at the end of the year.
Based on the above and the result of the audit, compute for the following:
1. Sales for the year ended December 31, 2020
a. 4,000,000 c. 2,000,000
b. 5,000,000 d. 3,000,000
2. Total manufacturing cost for the year ended December 31, 2020?
a. 4,166,667 c. 666,667
b. 3,000,000 d. 2,850,000
3. Cash as of December 31, 2020
a. 1,900,000 c. 650,000
b. 1,150,000 d. 500,000
4. Total current assets as of December 31, 2020
a. 4,000,000
b. 2,600,000
c. 2,575,000
d. 3,861,111
5. Total liabilities and equity as of December 31, 2020
a. 5,761,111
b. 5,750,000
c. 5,500,000
d. 5,475,000
SOURCE: REVIEWER IN AUDITING PROBLEMS, R. OCAMPO XXII Audit of FS Presentation PROBLEM
11
PROBLEM 4
STATEMENT OF CASH FLOWS
In connection with your audit of the EXCEL Corporation for the year ended December 31, 2020, the
following financial information were presented.
EXCEL Corporation
Statement of Financial Position
December 31, 2020 and 2019
Liabilities
3
AUDITING PROBLEMS: FINANCIAL STATEMENTS AP-1009
REFRESHER COURSE-AUDITING PROBLEM: QUIZZERS
Equity
Share capital 97,500 97,500
Retained earnings 307,500 300,000
Total equity 405,000 397,500
Total liabilities and equity 555,000 630,000
EXCEL Corporation
Income Statement
For the year ended December 31, 2020
Sales 450,000
Cost of sales (150,000)
Gross profit 300,000
Administrative and selling expenses (30,000)
Interest expense (30,000)
Depreciation of property, plant and equipment (30,000)
Amortization of intangible asset (7,500)
Dividend income 45,000
Profit before income taxes 247,500
Income taxes expense (60,000)
Profit 1,875,000
Additional information:
The company pays salaries and other employee dues before the end of each month. All
administration and selling expenses incurred were paid before December 31, 2020.
Dividend income comprised dividends received from available-for-sale securities. This was
received before December 31, 2020. Dividends received were classified under investing
activities in last year’s statement of cash flows.
Equipment with a carrying amount of P112,500 and cost of P157,500 was sold for P112,500.
The company declared and paid dividends of p180,000 to its shareholders during 2020.
Based on the above and the result of your audit, determine the following:
1. Cash collections from customers
a. 450,000 c. 487,500
b. 412,500 d. 367,500
2. Cash paid to suppliers and employees
a. 270,000 c. 300,000
b. 330,000 d. 450,000
3. Cash paid for income taxes
a. 30,000 c. 45,000
b. 75,000 d. 90,000
4. Net cash provided by operating activities
a. 82,500 c. 52,500
b. 37,500 d. 0
5. Net cash used in investing and financing activities
a. 22,500 c. 52,500
b. 67,500 d. 0
SOURCE: REVIEWER IN AUDITING PROBLEMS, R. OCAMPO XXII Audit of FS Presentation PROBLEM
13
4
AUDITING PROBLEMS: FINANCIAL STATEMENTS AP-1009