SET D

1. Apple Corporation’s records have the following information:

Sales P600,000; Cost of Sales P240,000; Administrative expenses P60,000; Loss on sale of equipment P36,000; Commissions expense P40,000; Interest income
P20,000; Freight out P12,000; Loss due to settlement of long-term debt P40,000 and Bad debts expense P12,000

The corporation has P400,000 and P360,000 worth of finished goods inventory at the beginning and ending of the year, respectively. How much is the cost of
goods manufactured?

2. Presented below is selected information pertaining to Heart Company:

Cash balance, January 1 13,000.00 Total assets, December 31 101,000.00

Accounts receivable, January 1 19,000.00 Cash balance, December 31 20,000.00
Collections from customers during the year 210,000.00 Accounts receivable, December 31 36,000.00
Capital balance, January 1 38,000.00 Merchandise taken for personal use 11,000.00
Total assets, January 1 75,000.00 Total liabilities, December 31 41,000.00
Cash investments added 5,000.00

How much is the net profit for 2021?

3. Frozen Inc. uses the direct method to prepare its statement of cash flows. Using the information provided below, determine the net cash provided(used) from
operating activities:
Cash receipts from: Cash payments of:
Issuance of ordinary shares 800,000.00 Wages and other expenses 240,000.00
Receipts from customers 400,000.00 Insurance 20,000.00
Repayment of loan made to another company 440,000.00 Taxes 80,000.00
Purchase of land 160,000.00

4. Tea Company shows the following account balances in their financial records as of December 31, 2021.
Checking account at Morgan Bank (20,000.00) Advances to president's brother 75,000.00
Checking account at Land Bank 500,000.00 Traveler's check 50,000.00
Payroll account - National Bank 100,000.00 NSF Checks 18,000.00
Foreign bank account - restricted 750,000.00 Petty cash fund (P84,000 are expense receipts)
100,000.00
Postage stams 22,000.00 Cashier's checks 36,000.00
Employee's post-dated checks 30,000.00

What is the correct cash balance to be reported in the statement of financial position?

5. In preparing its bank reconciliation at the end of the year, Victory Company has the following available data:
Balance per bank statement 38,075.00 Amount erroneously credited by bank 400.00
Deposit in transit 5,200.00 Bank service charge 75.00
O utstanding checks 6,750.00

How much is Victory’s adjusted cash balance at year-end?

6. The following information is shown in the accounting records of MBC Inc:

December 31 January 01
Cash ? 186,000.00
Accounts receivable 273,000.00 201,000.00
Inventories 234,000.00 258,000.00
Accounts payable 144,000.00 159,000.00

Total sales and cost of goods sold for 2021 were P2,394,000 and P1,749,000, respectively. All sales and purchases were made on credit. Various operating
expenses of P321,000 were paid in cash. Assume that there were no other pertinent transactions. What is the cash balance on December 31, 2021 of MBC Inc?

7. The following capital accounts are shown in the statement of financial position of Chicksilog Corporation:
Ordinary share, 10,000 shares, par value P100 P 1,000,000
Premium on ordinary share 20,000
Share premium – treasury share 30,000
Accumulated profits and losses 750,000
Treasury share, 2,000 shares at cost 250,000

The entire treasury shares were reissued for P200,000. What would be the balance of the Accumulated Profits and Losses account after the reissuance?

8. Cash dividends on the P10 par value ordinary share of Comodone Company were as follows:
1st quarter of 2021 P 330,000
2nd quarter of 2021 350,000
3rd quarter of 2021 420,000
4th quarter of 2021 450,000

The 4th quarter cash dividend was declared on December 13, 2021 to shareholders of record on December 31, 204. Payment of the 4th quarter cash dividend was
made on January 9, 2022.

In addition, Comodone Company declared 10% cash dividend on its P10 par value ordinary shares on December 4, 2021, when there were 300,000 shares issued
and outstanding and the market value for the ordinary shares was P16 per share. The shares were issued on December 6, 2021. Determine the effects of the
transaction to the Share Capital, Share Premium and Accumulated Profits account (15 points).
9. Lamuatan Corporation failed to recognize accruals and prepayments since the inception of its business three years ago. The accruals and prepayments at the end
of 2021 are given below:

Prepaid insurance P 60,000

Accrued wages 75,000
Rent revenue collected in advance 96,000
Interest receivable 81,000

What is the net effect of the above errors in the 2021 net income?

10. At December 31, 2021, Far Western Company had a note payable of P2,500,000 due on April 15,2022. Far Western expects to retire this debt with proceeds from
the sale of P100,000 shares of its ordinary shares. The shares were sold for P15 per share on March 2, 2022 prior to the issuance of year-end financial statements.
In far Western’s 2021 statement of financial position, what amount of the notes payable should be included from current liabilities?

11. On December 30, 2021, MIB Corporation sold merchandise for P75,000 to LNJ Company. The terms of the sale were n/30, FOB Shipping Point. The
merchandise was shipped on December 31, 2021, and arrived at LNJ Company on January 2, 2022. The sale was recorded in January 2022 and the merchandise,
sold at a 25% markup on cost, was included in MIB physical count at year-end. What is the effect in MIB’s cost of goods sold?

12. Aristides Company maintains the accounting records using the cash basis of accounting. During 2021, the entity recognized income of P6,000,000 from clients.
On December 31,2011, accounts receivable of P800,000 and unearned fees of P500,000 had been recorded. On December 31, 2021, accounts receivable increased
by P1,500,000 while unearned fees increased to P900,000. Under the accrual basis, what is the service revenue for 2021?

13. Dota Corporation’s statement of financial position and statement of income appear below.
Income Statement

Sales 723,000
Cost of goods sold 453,000
Gross margin 270,000
Selling and administrative expenses 163,000
Income before income taxes 107,000
Income tax expense 32,000
Net income 75,000

Statement of Financial Position

December 31 January 01
Cash 42,000 36,000
Accounts receivable 77,000 80,000
Inventories 54,000 58,000
Plant and equipment 581,000 480,000
Accumulated depreciation (318,000) (294,000)
Total assets 436,000 360,000

Accounts payable 23,000 28,000

Bonds payable 293,000 270,000
Share capital 61,000 60,000
Retained earnings 59,000 2,000
Total liabilities and equity 436,000 360,000

The company did not dispose of any property, plant, and equipment, retire any bonds payable, or repurchase any of its own common stock during the year. The
company declared and paid a cash dividend. Based on the information, prepare a statement of cash flows (20 points).

14. The financial records of Gutom Corporation were destroyed by fire at the end of 2021. Fortunately, the controller had kept certain statistical data related to the
income statement presented below:
a. The beginning inventory was P92,000 and decreased by 20% during the current year.
b. Sales discounts amount of P17,000
c. 20,000 ordinary shares were outstanding for the entire year.
d. Interest expense was P20,000.
e. The income tax rate is 35%.
f. Cost of goods sold amounts to P500,000.
g. Administrative expenses are 20% of cost of goods sold but only 8% of gross sales.
h. Four-fifths of the operating expenses relate to sales activities.

Based on the information above, reconstruct/prepare Gutom Corporation’s income statement for the year ended December 31, 2021 (10 points).