Jullie Carmelle H.

Chatto
Accounting 16: Problems – Part II

Problem I – Recca Company

Requirement 1: ₱ 6,048,000.00
Principal ₱ 6,000,000.00
Add: Interest (6,000,000 x 10% x 6/12) 300,000.00
Maturity Value ₱ 6,300,000.00
Less: Discount (6,300,000 x 12% x 4/12) 252,000.00
Net Proceeds ₱ 6,048,000.00

Requirement 2: ₱ (52,000.00)
Principal ₱ 6,000,000.00
Accrued Interest Receivable (6,000,000 x 10% x 2/12) 100,000.00
Carrying Amount of Note Receivable ₱ 6,100,000.00

Net Proceeds ₱ 6,048,000.00

Carrying amount of Note Receivable 6,100,000.00
Loss on Note Receivable Discounting ₱ (52,000.00)

Problem II – Rina Company

Requirement 1: ₱ 4,017,000.00
Principal ₱ 4,000,000.00
Add: Interest (4,000,000 x 12% x 90/360) 120,000.00
Maturity Value ₱ 4,120 ,000.00
Less: Discount (4,120,000 x 15% x 60/360) 103,000.00
Net Proceeds ₱ 4,017,000.00

Requirement 2: ₱ (23,000.00)
Principal ₱ 4,000,000.00
Accrued Interest Receivable (4,000,000 x 12% x 30/360) 40,000.00
Carrying Amount of Note Receivable ₱ 4,040,000.00
Net Proceeds ₱ 4,017,000.00
Carrying amount of Note Receivable 4,040,000.00
Loss on Note Receivable Discounting ₱ (23,000.00)

Problem III – Panday Inc.

Requirement 1: ₱ 2,175,000.00
Face amount ₱ 5,000,000.00
Present Value (5,000,000 x 0.565) 2,825,000.00
Unearned Interest ₱ 2,175,000.00

Requirement 2: ₱ 825,000.00
Present Value ₱ 2,825,000.00
Carrying Amount 2,000,000.00
Gain on Sale ₱ 825,000.00

Requirement 3: ₱ 339,000.00
Present Value ₱ 2,825,000.00
Interest Rate 12%
Interest Income ₱ 339,000.00

Requirement 4: ₱ 2,664,000.00
Note Receivable – December 31, 2019 (5,000,000 – 500,000) ₱ 4,500,000.00
Less: Unearned Interest Income – 12/31/19 (2,175,000 – 339,000) 1,836,000.00
Carrying Amount – December 31, 2019 ₱ 2,664,000.00
Problem IV – Naruto Company
Requirement 1: ₱ 110,000.00
Principal Rate Total Mos. Interest (2019)
10/31 – 12/31 ₱ 3,000,000.00 8% ₱ 240,000.00 3/12 ₱ 60,000.00
Mar - Dec ₱ 1,000,000.00 6% ₱ 60,000.00 10/12 ₱ 50,000.00
Total ₱ 110,000.00

Requirement 2: ₱ 425,000.00
Accounts Receivable – 12/31/18 (3,840,000 + 520,000) ₱ 4,360,000.00
Credit Sales 21,200,000.00
Cash Collections (19,800,000.00)
Write-Off (410,000.00)
Accounts Receivable – 12/31/19 ₱ 5,350,000.00
x Doubtful Accounts Percentage 10%
Allowance for Doubtful Accounts – 12/31/19 ₱ 535,000.00
Write-off 410,000.00
Total ₱ 945,000.00
Less: Allowance for Doubtful Accounts – 12/31/18 520,000.00
Doubtful Accounts Expense ₱ 425,000.00

Problem V – Neji Bank

Requirement 1: ₱ 3,711,500.00
Origination Fee Received ₱ 350,000
Direct Origination Fee (61,500)
Unearned Interest Income ₱ 288,500

Principal Amount ₱ 4,000,000.00

Unearned Interest Income (288,500.00)
Carrying Amount – 1/1/18 ₱ 3,711,500.00

Requirement 2: ₱ 445,380.00
Carrying Amount ₱ 3,711,500.00
x Interest Rate 12%
Interest Income - 2018 ₱ 445,380.00

Requirement 3: ₱ 3,756,038.00
Loan Receivable ₱ 4,000,000.00
Less: Unearned Interest Income – 2018 (288,500 – (445,380 x 10%)) 243,962
Carrying Amount – 12/31/18 ₱ 3,756,038.00

Problem VI – Byakugan Bank

Requirement 1: ₱ 2,965,000.00
12/31/19 (500,000 x .90) ₱ 450,000.00
12/31/20 (1,000,000.00 x .81) 810,000.00
12/31/21 (2,000,000.00 x .73) 1,460,000.00
12/31/22 (4,000,000.00 x .66) 2,640,000.00
Total Present Value ₱ 5,360,000.00

Loan Receivable ₱ 7,500,000.00

Accrued Interest Payable 825,000.00
Carrying Amount ₱ 8,325,000.00
Less: Present Value 5,360,000.00
Impairment Loss ₱ 2,965,000.00
 Requirement 2: ₱ 589,600.00
Present Value ₱ 5,360,000.00
Interest Rate 11%
Interest Income ₱ 589,600.00

Requirement 3: ₱ 5,449,600.00
Loan Receivable (7,500,000 – 500,000) ₱ 7,000,000.00
Allowance for Loan Impairment (2,140,000 – 589,600) (1,550,400.00)
Carrying Amount – 12/31/19 ₱ 5,449,600.00

Problem VII – Jiraya Company

Requirement 1: ₱ 5,700,000.00
Items counted in the bodega ₱ 4,000,000.00
Items included in the count specifically segregated per sale contract (100,000.00)
Items in receiving department, returned by customer 50,000.00
Items ordered and in the receiving department 400,000.00
Items shipped today, FOB (Shipping Point) Destination 150,000.00
Items for display 200,000.00
Items on counter for sale 800,000.00
Damaged and Unsalable Items included in count (50,000.00)
Items in the shipping department 250,000.00
Inventory, current amount ₱ 5,700,000.00

Problem VIII – Cardcaptor Company

Requirement 1: ₱ 5,500,000.00
Materials ₱ 1,400,000.00
Goods in Process 650,000.00
Finished goods in factory 2,000,000.00
Finished goods in entity and retail store (750,000 / 150%) 500,000.00
Finished goods in the hands of consignee (400,000 x 60%) 240,000.00
Finished goods in transit 250,000.00
Finished goods out on approval 100,000.00
Materials in Transit 360,000.00
Correct inventory ₱ 5,500,000.00

Problem IX – Sakura Inc.

Requirement 1: Net Method: ₱ 1,764,000.00 ; Gross Method: ₱ 1,784,000.00
NET METHOD GROSS METHOD
Purchases (800,000+1,000,000) ₱ 1,800,000.00 Purchases ₱ 1,800,000.00
Purchase Discount
Purchase Discount Taken (800,000 x 2%) (16,000.00) (16,000.00)
Taken
Purchaser Discount Not Taken (1,000,000
(20,000.00) Net Purchases ₱ 1,784,000.00
x 2%)
Net Amount ₱ 1,764,000.00

Problem X – Tsunade Inc.

Requirement 1: ₱ 1,411,000
Unadjusted ₱ 1,250,000.00
A -
B 50,000.00
C 20,000.00
D 26,000.00
E 25,000.00
F 30,000.00
G -
Requirement 2: ₱ 1,000,000 Requirement 3: ₱ 8,925,000
₱ 1,000,000.00 ₱ 9,000,000.00
- (35,000.00)
50,000.00 -
- -
- (40,000.00)
- -
- -
60,000.00 -
 H 10,000.00 20,000.00 -
Adjusted ₱ 1,411,000.00 ₱ 1,130,000.00 ₱ 8,925,000.00

Problem XI – Inuyasha Inc.

Requirement 1: ₱ 5,850,000.00
Units Units Cost Total Cost
January 18 150,000 23 ₱ 3,450,000.00
January 28 100,000 24 2,400,000.00
Total (FIFO) 250,000 ₱ 5,850,000.00

Problem XII – Lupin Company

Requirement 1: ₱ 3,180,000.00
Units Units Cost Total Cost
January 10 20,000 200 ₱ 2,000,000.00
January 8 30,000 110 3,300,000.00
Total 50,000 ₱ 5,300,000.00

Weighted Average Unit Cost = Total Cost / Unit

₱ 5,300,000 / 50,000 = ₱ 106.00
Units 30,000
Cost of Inventory ₱ 3,180,000.00

Problem XIII – Kagome Company

Requirement 1: ₱ 3,225,000.00
Units Unit Cost Total Cost
January 1 10,000 ₱ 100 ₱ 1,000,000.00
January 7 6,000 300 1,800,000.00
Balance (2,800,000 / 16,000) 16,000 175 2,800,000.00
January 20 (Sale) (9,000) 175 (1,575,000.00)
Balance 7,000 175 1,225,000.00
January 25 4,000 500 2,000,000.00
Balance (3,225,000 / 11,000) 11,000 ₱ 3,225,000.00

Problem XIV – Naraku Company

Requirement 1: ₱ 12,000,000.00
Sales Price per Lot ₱ 1,000,000.00
Number of Lot 20
Highland Sales Price ₱ 20,000,000.00
Fraction 20/100
Total Cost ₱ 12,000,000.00

Problem XV – Kenshin Company

Requirement 1: ₱ 3,200,000.00
Total Inventory
Product X Product Y
(Individual Approach)
Materials and Conversion Cost ₱ 1,500,000.00 ₱ 1,800,000.00
Selling Price ₱ 2,000,000.00 ₱ 3,000,000.00
Selling Cost (600,000.00) (700,000.00)
Net Realizable Value ₱ 1,400,000.00 ₱ 2,300,000.00
Measurement at Lower Amount ₱ 1,400,000.00 ₱ 1,800,000.00 = ₱ 3,200,000.00

Problem XVI – Shishiyo Inc

Requirement 1: ₱ 160,000.00
Remaining Contract – 1,000 units each year
2019 (1,000 x ₱ 100) ₱ 100,000.00
 2020 (1,000 x ₱ 100) 100,000.00
Total ₱ 200,000.00
Less: Estimated Receivable Value (2,000 x 20) 40,000.00
Loss on Purchase Commitment ₱ 160,000.00
Requirement 2: ₱ 200,000.00
Inventory – 12/31/18 @ cost (2,500 x ₱ 100) ₱ 250,000.00
Net Realizable Value (2,500 x ₱ 20) 50,000.00
Loss on Inventory Writedown –2018 ₱ 200,000.00

Problem XVII – Xato Company

Requirement 1: ₱ 4,200,000.00
Accounts Receivable – 4/30 ₱ 1,040,000.00
Write-off 60,000.00
Collection from Customers (440,000 – 20,000) 420,000.00
Total ₱ 1,520,000.00
Less: Accounts Receivable 3/31 920,000.00
Sales for April ₱ 600,000.00
Sales up to March 31 3,600,000.00
Total Sales ₱ 4,200,000.00
Requirement 2: ₱ 2,100,000.00
Accounts Payable 4/30 (for April Shipment) ₱ 340,000.00
Payment for April merchandise Shipment 80,000.00
Purchases of April ₱ 420,000.00
Purchase up to 3/31 1,680,000.00
Total Purchases up to 4/30 ₱ 2,100,000.00
Requirement 3: ₱ 1,440,000.00
Cost Ratio = 100 % - 40 % = 60%
Inventory – 1/1 ₱ 1,880,000.00
Purchases 2,100,000.00
Purchase Returns (20,000.00)
Goods Available for Sale ₱ 3,960,000.00
Cost of Goods Sold (2,520,000.00)
Inventory – 4/30 ₱ 1,440,000.00
Requirement 4: ₱ 1,200,000.00
Inventory – 4/30 ₱ 1,440,000.00
Goods in Transit (100,000.00)
Salvage Value of Inventory (140,000.00)
Fire Loss ₱ 1,200,000.00

Problem XVIII – Killua Inc.

Requirement 1: ₱ 2,400,000.00
Cost Retail
Beginning Inventory ₱ 650,000.00 ₱ 1,200,000.00
Purchases 9,000,000.00 14,700,000.00
Freight-in 200,000.00
Purchase Returns (300,000.00) (500,000.00)
Purchase Allowances (150,000.00)
Department Transfer in 200,000.00 300,000.00
Mark-up 400,000.00
Mark-up Cancellation (100,000.00)
Goods Available Conservative ₱ 9,600,000.00 ₱ 16,000,000.00
Mark-down (1,200,000.00)
Mark-down Cancellation 200,000.00
Goods Available – Average ₱ 9,600,000.00 ₱ 15,000,000.00
Sales (9,500,000.00)
Employee Discounts (500,000.00)
Normal Shoplifting Loss (600,000.00)
Normal Shrinkage (400,000.00)
Ending Inventory in Retail ₱ 4,000,000.00
Conversion Cost Percentage * 60%
Estimated Cost of Ending Inventory ₱ 2,400,000.00

* Conversion Cost Percentage = 9,600,000 / 16,000,000

= 60%
Requirement 2: ₱ 2,560,000.00
* Conversion Cost Percentage = 9,600,000 / 15,000,000
= 64%
Ending Inventory in Retail ₱ 4,000,000.00
x Conversion Cost Percentage 64%
Estimated Cost of Ending Inventory ₱ 2,560,000.00