CPA REVIEW SCHOOL OF THE PHILIPPINE Manila ADVANCED FINANCIAL ACCOUNTING AND REPORTING PREWEEK SELFTEST ‘Numbers f and 2 A will contribute an equipment with A, B and C devised 9 fore ABC Partnership, 1 was agreed tha 1,200,000. assessed value of 200,000 with historical cost of P1,600,000 and accumulated deprectation of P A day after the partnership formation, the equipunent was sod For 600,000. B will contribute a land and builing with garrying amount of P2,4100,000 and fle value of P3,000,000. The land and building are subject oa mortgage payable amounting to P600,000 to be assumed by the | partnership. The partners agreed that B will have 60% capital interest inthe partnership, The partners also | agreed that C will contribute suficient eash to the partnership. 1, What is the total agreed capitalization of the ABC Partnership?” A. 3,000,000 B. 4,000,000 CC. $,000,000 D. 6,000,000 2. What is the cash to be contributed by C in the ABC Partnership? A. 1,000,000 B. 1,200,000 CC. 1,400,000 D. 1,600,000 Number 3 On January 1, 2018, A, B and C formed ABC Partnership with original eapital c 1,000,000 and P400,000. A is appointed as managing partner. During 2018, A, B and C made additional investments of P1,000,000, P400,000 and P600,000, respectively. nade drawings of P400,000, P200,000 and P8O0,000, respectively. At the At the end of 2018, A, B and Cm tag of 2018, the partnership had a credit balance in the income summary account of P2,100,000. The profit or loss agreement of the partners is as follows: 10% interest on original capital contribution of the partners. Quarterly salary of P80,000 and P20,000 for A and B, respectively Bonus to A equivalent to 20% of Net Income after interest and salary to all partners Remainder is to be distributed equally among the partners. sontribution of P600,000, What is A’s share in partnership profit for 2018? A, 380,000 B. 680,000 CC. 1,080,000 D. 400,000 Numbers 4 ‘On December 31, 2018, the Statement data with profit or loss ratio of S:1:4 of Financial Position of ABC Partnership provided the following Current Assets 3,000,000 1,000,000 Noncurrent Assets 4,000,000 2,200,000 72,400,000 C, Capital 1,400,000 On January 1, 2019, D is admitted to the partnership by investing P! ,000,000 to the partnership for 10% ization of the new partnership is P6,000,000. capital interest. The total agreed capital ‘What isthe capital balance of C after the admission of D tothe partnership? 1,160,000 1,640,000 1,000,000 1,560,000 pop>Page 2 Numbers 5 On December 31, 2018, the Statement of Financial Position of ABC Partnership with profit or loss ratio of 6:1:3 of partners A, B and C respectively, revealed the following data: Cash 2,000,000 Other Liabilities 4,000,000 Receivable from A 1,000,000 Payable to B 2,000,000 Other noneash assets 4,000,000 Payable to C 200,000 A, Capital 1,400,000 B, Capital (1,300,000) C, Capital 700,000 are legally declared to be On January 1, 2019, the partners decided to liquidate the partnership. All partners personally insolvent. The other noncash assets were sold for P3,000,000. Liquidation expenses amounting to P200,000 were incurred. How much cash was received by B at the end of partnership liquidation? A. 500,000 B. 300,000 C. 580,000 D. $40,000 Numbers 6 and 7 ion of ABC Partnership with profit or loss ratio of On December 31, 2018, the Statement of Financial Positi 5:3:2 of respective partners A, B and C, showed the following information: Cash 3,200,000 Total Liabilities 4,000,000 Noneash assets 2,800,000 A, Capital 200,000 B, Capital 1,000,000, 800,000 C, Capital ip in installment. All partners are legally On January 1, 2019, the partners decided to liquidate the partner declared to be personally insolvent. ‘As of January 31, 2019, the following transactions cccurred: © Noncash assets with a carrying amount P2,000,000 were scid at a gain of P200,000., © Liquidation expenses for the month of January amounting to P100,000 were paid. fic fy estimated that liquidation expenses asiounting to ?300,000 will be incurred for the month of February, 2019. © 20% of the liabilities to third persons were settle. «Available cash was distributed to the partners. 6. What is the amount of cash received by partner C on January 31, 2019? A. 520,000 B. 480,000 C. 600,000 D. 700,000 7. What is the amount of total cash withheld on January 31, 2019? A. 1,100,000 B. 3,200,000 C. 3,500,000 D. 3,400,000 aPage 3 Number 8 AL the date of partnership formation of ABC i it formation of ABC partnership, the amount credited to A's capital isl fir matket value of the property he contributed. Which ofthe following isthe most valid reason? ape A. The property contributed by A is impaired. B. The property contributed by A has been subjected to positive asset revaluation. ' C. Bonus has been given by partner A to the other partners. D. Goodwill arising from partnership formation has been recognized. Numbers 9 and 10 AAA Company is bankrupt and has undergone corporate liquidation, Presented below is its statement of financial position before the start of liquidation: Cash. 300,000 ‘Accounts Payable 100,000 Machinery 500,000 Salaries Payable 200,000 1,200,000 Income tax Payable 300,000 Loan Payable 400,000 Mortgage payable 500,000 Contributed capital 800,000 Deficit (300,000) ‘© Liquidation expenses amounting to P600,000 were paid ‘+ The loan payable is secured by the machinery with fair value of P300,000. © The mortgage payable is secured by the building (fair value equal its book value). ‘© At the end of liquidation, the holder of loan payable received P340,000. What is the amount received by the holder of accounts payable at the end of liquidation? A. 85,000 B. 15,000 C. 40,000 D. 60,000 0. What is the amount of net free assets available at the end of liquidation? A. 80,000 B. 40,000 C. 120,000 D. 200,000 Number 11 creditors will always fully recover their claims from In every corporate liquidation, which of the follo a liquidating corporation? ‘A. Unsecured creditors with priority B. Unsecured creditors without priority C. Partially secured ere D, Fully secured ereditors Number 12 It refers tothe term used when the total shareholders’ equity has a negative balance A. Deficit B. Deficiency C. Surplus D. InsufficiencyPage 4 Numbers 13 and 14 manufacture a microchip to be used by the incorporating erpotanal products of celular phones and tablets porating entities provided that the decisions on relevant snsent of both entities have rights to the assets, and obligations for the iiabilites, relating to the we Entity © wil be owned by Entity A and Entity B in he rao of 60:40. cents provided the following data Entity A and Entity B incorporated Entity C 1 entities as component fo activities of The contractual agreement of the incor Entity C will require the unanimous 60 Entity A and Entity B arrangement. The ordinary ‘At the end of first operation of Entity C, the finaneial starem Inventory 2,000,000 ‘Accounts payable 4,000,000 Land 6,000,000 ‘Note payable 2,000,000 uilding 10,000,000 Loan payable 8,000,000 Share capital 2,000,000 Retained eamings 2,000,000 Sales reverie (0,000,000 The contractual agreement of Entity A and Entity f The contract apestoe sy And Entity B also provided for the following conseming he ase8 aa payable of Entity C. «Entity A owns the land and incurs the lo © Entity B owns the building and incurs the note payable of «The other assets and liabilities are owned or owed by Entity A interest in Entity C «The sales revenue of Entity C includes sales to Entity A und Fn B in the amount of 4,000,000, respectively. As ofthe end of the first year Tatty A end Entity B were able to rese i 60% of the inventory coming from Entity to third persons Entity ‘and Fatity B on the basis of their capital 12,000,000 and 11 30% 13, Whats the amount of total assets to be reported by Extiy 4 concerning its interest in Entity C? ‘A. 10,800,000 B. 6,000,000 CC. 7,200,000 D. 10,000,000 14, What is the amount of sales revenue 19 be reported by Entity A concerning its interest in Entity cr A, 4,600,000 B. 4,200,000 C. 6,000,000 D. 5,000,000 Star Ine, The assets and ivities of the arrangement only to the Number 15 1C establish a joint arrangement in a0 incorporated entity iI be in the name of the said established enttj, ‘The acti poard of directors. The rights of Federal ‘Land and SMDC are limited .al SMDC account for ts investment in Star Ine.” portionaie consolidation, Federal Land and SMD‘ liabilities of Star Inc. wi will be decided by its own net assets of Star Inc. How shi 'A, It shall be accounted for using pro Bt shall be accounted for as joint venture. C. It shall be accounted for as joint operation, D., dt shall be accounted for investment in trading securPage 5 Numbers 16 and 17 On January 1, 2018, Entity A, a public entity, and Entity B, a public entity, incorporated Entity C by investing P6,000,000 and P4,000,000 for capital interest ratio of 60:40. The contractual agreement of the incorporating entities provided that the decisions on relevant activities of Entity C will require the ‘unanimous consent of both entities. Entity A and Entity B will have rights to the net assets of Entity C. ‘The financial statements of Entity C provided the following data for 2018: © Entity C reported net income of P2,000,000 for 2018 and paid cash dividends of P800,000 on December 31, 2018, ‘* During 2018, Entity C sold inventory to Entity A with gross profit of P100,000. Eighty percent of those inventories were resold by Entity A to third persons during 2018 and the remainder was resold to third persons during 2019. * On July 1, 2018, Entity C sold a machinery to Entity B at a loss of P40,000. At the time of sale, the ‘machinery has remaining useful life of 2 years 16. What isthe investment income to be reported by Entity A for the year ended December 31, 2018? ‘A. 1,206,000 B. 1,212,000 . 1,188,000 D. 1,194,000 17, What is the balance of Investment in Entity C to be reported by Entity B on December 31, 2018? ‘A. 4,492,000 B. 4,482,000 C. 4,476,000 D. 4,496,000 Numbers 18 and 19 ‘On January 1, 2018, an entity sold a car to a customer at a price of P400,000 with a production cost of 300,000. It is the entity’s policy to employ installment method to recognize gross profit from installment sales. ‘At the time of sale, the entity received cash smounting to 25% of the selling price and old car with trade-in allowance of 50,000. The said old car has fair value of P150,000, The customer issued a 5-year note for the balance to be payable in equal annual installments every December 31 starting 2018, The note payable is interest bearing with 10% rate due on the remaining balance of the note, The customer was able to pay the first annual installment and corresponding interest due. However, after the payment of the second interest due, the customer defaulted on the second annual installment which resulted to the repossession of the car sold with appraised value of P110,000. On December 31, 2019, the repossessed car was resold for P140,000 after reconditioning cost of P10,000. 18 What is the entity's realized gross profit for the year ended December 31, 2018? A. 50,000 B. 120,000 €. 108,000 , D. 128,000 19 What is the loss on repossession for the year ended December 31, 2019? ‘A. 30,000 B. 20,000 €. 10,000 D, 40,000Page 6 | Number 20 If the sale transaction provides for periodic installments over an extended period of time and the caleaablity of the sales price cannot be reasonably estimated, what method of revenue recognition is the ‘most appropriate? A. Cost recovery method B, Accrual basis CC. Installment method D. Cash basis Numbers 21 and 22 On January 1,2018, an entity granted a franchise agreement toa franchisee. The contrac provided that the franchisee shall pay an intial franchise fe of P500,000 and on-going payment of royalties ‘equivalent to | B%of the sales of the franchisee. On January 1, 2018, the franchisee paid downpayment of P200,000 and issued a 3-year noninterest bearing ote the Glance payable in tee equal annval installments starting December 31, 2018 ‘The note has ) present value of P240,183 with effective interest rate of 12%. On June 30,2018, the entity completed the performance obligation of the franchise at a cost of P352,146. Aside from that, the entity incurred indirect cost of P22,009. ) ‘The ftanchisee started operation on July 1, 2018 and reported sales revenue emounsng to P50,000 for the year ended December 31, 2018. The franchisee paid the fist installment on its due date, 21. Ifthe collection ofthe note reciveble is reasonably assured, what is the gross profit to be recognized by the entity for the year ended December 31, 2018 in relation to the initial franchise fee? A. 66,028 ‘ B. 44,014 C. 22,009 D. 88,037 | 20. IF the collection of the note receivable is reasonably assured, what is the net income to be reported by the entity for the year ended December 31, 2018? A, 98,850 94,850 B j C. 70,028 i D. 92,037 : | Number 23 Under IFRS 15, in which ofthe following instances sll an ent wooenins Bt through satisfaction x of performance obligation at # point in time instead of satisfaction of performance obligation over time? [A, The customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs. B. The entity's performance creat or enhanced . The entity's performance doesnot rete anaset with an ean pe Sorceable right to payment for performance complete 0 date : D. The entity ha transferred the legal tile, control and physical possession ofthe asset at 2 specific date. ses or enhances an asset thatthe customer controls @s the asset is created use to the entity andthe entity hasNumbers 24, 28 and 26 Page 7 On January 1, 2018, BBB ¢ 16 oonstn, tr fi cf or 7 ‘ompany started thy 6 contract price Pe rent t nae construction of @ building at i Sede etie rate faite cate, the customer paid s mobilization fee eet nese 8 mntract price that Wi it tract price that will, During 2018, the entity billed the cust oa customer amounting 10 40% of the contract price, The remaining billing was rag your ofecenitinn The entity made collection from the customer at the end of 2 ‘ sumer ahead 2018, 2019 an, snout 240 P900,000 and P360,000, respectively. The entity ided the wir i a aie a ty provic 1¢ following data concerning the direct costs 2018 2019 2020 Cumulative costs incurred at year-end 720,000 1,600,000 1,740,000 1,680,000 $00,000 100,000. Remaining estimated costs to complete at year-end 24 What is the realized gross profit for the year ended December 31, 2019? A. 100,000 B, 400,000 C. 300,000 D. 0 25. What is the excess of construction in progress over progress billings or excess of progress billings over construetion in progress on December 31, 2020? ‘A. 60,000 excess billings B. 160,000 excess billings C. 40,000 excess construction in progress D. 100,000 excess construction in progress 26 What is the balance of accounts receivable on December 31, 2020? A. 300,000 B, 200,000 C. 240,000 D. 100,000 Number 27 When it is probable that total contract costs will exceed total contract revenue, how shall the long-term contractor account for the difference? ‘A. The expected loss shall be recognised as an expense immediately. B. The expected profit shall be recognized as a profit immediately. C. The expected loss shall be recognised as an expense taking into account the percentage of completion as of the end of the period. The expected loss shall be recognised as a profit taking into account the percentage of completion as of D, the end of the period. Number 28 When the outcome of a construction contract cannot be estimated reliably, what accounting method shall be used by the long-term constructor for the recognition of construction revenue and construction cost? A. Percentage of completion method B. Cost recovery method i C. Installment method D. Accrual basisPage 8 Numbers 29 and 30 Siargao Company set up a branch in a province. The entity and its branch provided the followis fo the second year of branch operation: ity provic 1e following data for Home Office Branch Sales revenue to outside customer 2,000,000 1,000,000 Beginning inventory 100,000 60,000 Purchases from outside supplier 800,000 200,000. Shipment to branch 400,000 : Shipment from home office 500,000 Ending inventory 160,000 100,000 Operating expenses 300,000 80,000 «The home office to branch markup based on cost is 25% this year and Iast year. © 20% of the beginning inventory of the branch came from outside supplier. + 24% of the ending inventory of the branch came from the last year’s shipment from the home office while 50% of the ending inventory of the branch came from current year's shipment from the home office. 20, What is the net income reported by the branch in its separate income statement forthe current year? A. 260,000 B. 248,000 CC. 228,000 D. 190,000 30. What is the ending inventory to be reported by the entity in its combined statement of financial position? A. 256,000 B. 230,000 C. 260,000 D. 245,200 ‘Number 31 ‘What is the main reason for the difference between the branch's net income reported by the branch and the true branch’s net income computed by the home office? 'A. Because of overstatement of branch's cost of seles for goods coming from outsiders B, Because of overstatement of branch's cost of sales for goods coming from home office C. Because of overstatement of total goods available for sale coming from home office D. Because of overstatement of branch's ending inventory coming from home office Number 32 Under IFRS 3, in a business combination achieved in stages, if the acquisition date fair value of the net of f the identifiable assets acquired and the liabilities of the acquiree is lower the consideration transferred by the acquirer; (2) or proportionate share; and (3) acquisition date the difference shall be accounted for the acquisition-date amounts of than the aggregate of the (1) acquisition date fair value of amount of noncontrolling interest measured at fair value fair value of acquirer's previously held equity interest in the acquire, by the acquirer in its consolidated financial statement as rent asset not subject to emortization but subject to annual impairment test A. Goodwill classified as nonew fit or loss B. Gain on bargain purchase to be recognized as pest of prof C. Expense as incurred ; D. Deduction directly to retained earningsNumbers 33 and 34 Page 9 Entity A acquired the net assets of Entit bonds payable with face amount of P1,0 cost. ty B by issuing 10,000 ordinary shares with . n 's with par value of P20 and 100,000. The bonds are classified as financial liability at amortized ‘At the time of acquisition, the ordinary shares are publicly quoted at P40 per share bonds payable are trading at 110. ee ee Entity A paid P20,000 share issuance costs and P40,000 bond issue costs. Entit i A . ntity A al acquisition related costs and P60,000 indirect costs of business combination. — Before the date of acquisition, Entity A and Entity B reported the following data: Entity A Entity B Current assets 2,000,000 1,000,000 Noneurrent assets 4,000,000 2,000,000 Current liabilities 400,000 800,000 Noncurrent liabilities 600,000 1,000,000 Ordinary shares 1,000,000 400,000 Share premium 2,400,000 600,000 Retained earings 1,600,000 200,000 tthe time of acquisition, the current assets of Entity A have fair value of P2,400,000 while the noncurrent assets of Entity B have fair value of P2,600,000. On the same date, the current liabilities of Entity B have fair value of P1,200,000 while the noncurrent liabilities of Entity A have fair value of P1 000,000. 33, What is the goodwill or gain on bargain purchase arising from business combination? ‘A. 100,000 goodwill B. 300,000 gain on bargain purchase C. 240,000 goodwill D. 140,000 gain on bargain purchase 34, What is Entity A’s amount of total liabilities after the business combination? A. 4,480,000 B. 5,020,000 C. 4,640,000 D. 4,260,000 Numbers 35 and 36 (On January 1, 2018, Entity A acquired 30,000 out of 100,000 outstanding ordinary shares of Entity B for 90,000 or 30% interest. For the six months ended June 30, 2018, Entity B reported net income of P40,000. On July 1, 2018, Entity A acquired additional 60,000 ordinary shares of Entity B or 60% interest at a price of P4 per share or total cost of P240,000, Entity A paid P20,000 acquisition related costs and P10,000 t costs of business combination. ‘The acquisition price per share of the additional shares clearly reflected the fair value of the existing interest of Entity A in Entity B. It is the policy of Entity A to initially measure the noncontrolling interest in net assets of the acquiree at fair value. The fair value of the noncontrolling interest in net assets of the acquiree is reliably measured at P50,000. At the acquisition date, the net assets of Entity B were reported at P400,000. An asset of Entity B was overvalued by P50,000 while one liability was overvalued by P30,000. 35, What is the gain on remeasurement of the existing Investment in Entity B as aresult of step acquisition? A. 18,000 . B. 30,000 C. 24,000 D. 12,000 36, What is the goodwill or gain on bargain purchase as a result of the business combination? A. 18,000 goodwill B, 20,000 gain on bargain purchase C. 24,000 goodwill D. 30,000 goodwillAl YD RA Numbers 37 and 38 Page 10 On January 1, 2018, Entity A acquired 70% of outstandi » 2018, Entity 0% ng ordinary shares of Entity B at a price of io me result Chee eozblanlan ‘onthe dale of weullion was 42,000 gln on bargain january 1, 2018 Entity A reported retained earings of P4,000,000 Entity B repo Se aren ings 0 ,000 while Entity B reported All the assets and liabilities of Entity B ate faisly valued exce Z pt machinery which is undervalued by 160,000 and inventory which is overvalued by 20,000, The said machinery has remaining useful life of four years while 40% of the said inventory remained unsold atthe end of 2018 For the year ended December 31, 2018, Entity A reported net income of P2,000,000 and declared dividends of P300,000 in the separate financial statements while Entity B reported net income of P300,000 and declared dividends of P40,000 in the separate financial statements. Entity A accounted the investment in Entity B using cost method in the separate financial statements 37, What is the noncontrolling interest neti ‘A. 90,000 B. 98,400 C. 69,600 D. 81,600 ome on December 31, 20187 38. What is the consolidated net income attributable to parent shareholders forthe year ended December 31, 20187 A. 2,204,400 B. 2,324,400 C. 2,282,400 D. 2,190,400 Numbers 39 and 40 On Janvary 1, 2019, Entity A acquired 60% of outstanding ordinary shares of Entity B at a gain on bargain purchase of P80,000. For the year ended December 31, 2020, Entity A and Entity B reported sales revenue of P4, ,000 and P2,000,000 in their respective separate income statements. At the same year, Entity A and Entity B reported cost of goods sold of P2,400,000 and P1,400,000 in their respective separate income statements. During 2019, Entity A sold inventory to Entity B at a selling price of PS60,000 with gross profit rate of 40% based on cost. On the other hand, Entity B sold inventory to Entity A ata selling price of P800,000 with gross profit rate of 30% based on sales during 2020. On December 31, 2019, 25% of the goods coming from Entity A remained in Entity B’s inventory but all ‘were eventually sold to third persons during 2020, As of December 31, 2020, 40% of the goods coming from Entity B were eventually sold to third persons. For the year ended December 31, 2020, Entity A reported net income of P1, 120,000 while Entity B reported net income of P400,000 and distributed dividends of P100,000. Entity A accounted for its inventory in Entity B using cost method in its separate financial statements. 39, What is the consolidated sales revenue for the year ended December 31, 2020? A. 5,200,000 B. 4,640,000 C. 6,000,000 D, 5,440,000 40. What isthe consolidated cost of goods sold forthe year ended December 31, 2020? A. 3,800,000 B, 3,104,000 C, 2,896,000 D. 3,904,000Page 11 Numbers 41 and 42 On January 1, 2019, Entit is Entit gai |. 2019, Entity A acquired 80% of outstanding ordinary shares of Entity B at a gain on bargain purchase of P360,000. The following intercompany transactions occurred for between the two entities: © On January 1, 2019, Entity B sold a land to Entity A with a cost of P2,000,000 at a selling price of 2,200,000. The land was eventually sold by Entity A to third persons during 2020. * On January 1, 2019, Entity A sold a white machinery to Entity B with a cost of 400,000 and accumulated depreciation of P80,000 at a selling price of P360,000. The remaining life of the machinery from the date of sale was 16. The residual value of white machinery is immaterial. «© OnJuly 1,2020, Entity B sold a black machinery to Entity A at with a cost of P540,000 and accumulated depreciation of P360,000 at a selling price of P120,000. The remaining life of the machinery from the date of sale was 3. The residual value of black machinery is immaterial. For the year ended December 31, 2020, Entity A reported net income of P1,600,000 while Entity B reported net income of P1,000,000 and distributed dividends of P300,000. Entity A accounted for its inventory in Entity B using cost method in its separate financial statements. 41, What is the noncontrolling interest in net income for 2020? A. 248,000 B. 210,000 C. 250,000 D. 208,000 42, Whatis the consolidated net income attributable to parent shareholders for 20207 A. 2,412,500 B. 2,650,500 C. 2,197,500 D. 2,362,500 Numbers 43 and 44 d 70% of outstanding ordinary shares of Entity B. at a price of P1,000,000. Entity A incurred P200,000 cost related to acquisition. At acquisition date, the book value of nef assets of Entity B is P2,500,000 but building with useful life of 10 years is overstated by P500,000. For the year ended December 31, 2020, Entity B reported net income of P350,000 and declared dividend in the amount of P100,000. The fair value of the Investment in Entity B. is measured at P1,700,000 on December 31, 2020 43. In the separate financial statement of Entity A., the Investment in Entity A shall be reported on December 31, 2020 at what amount under equity method? A. 1,610,000 B. 1,410,000 C. 1,210,000 D. 1,200,000 44, In the separate financial statement of Entity A, what is its income in relation to Investment in Entity B for the year ended December 31, 2020 under equity method? ‘A. 480,000 B. 600,000 C. 100,000 D. 210,000Number 45 Page 12 Which of the followir a comblawsion? ing items will not affect the acquisition year's consolidated net income in a business A. Stock issuance cost B, Direct cost of business combination . Gain on bargain purchase D. Amortization of difference between fair value and book value of net assets of acquire Numbers 46 and 47 {astkman Company, a local company, bought raw materials as ingredients in its products from Superman Corporation, a US company, for 35,000 US Dollars in 2020. Pertinent exchange rates relating to this transaction are as follows BuyingRate Selling Rate Rests OO P4710 47.20 Date of shipment ais pie Balance sheet date 4950 43.60 Settlement date 49.45 49.50 46, What is the foreign exchange gain or loss of Lastikman Company for 20207 A. 78,750 loss B. 75,250 loss C. 78.750 gain D. 15.250 gain 447, What isthe value of the inventory, assuming it's not yet sold, as of settlement date? A. 1,652,000 B. 1,660,750 ©. 1,732,500 D. 1,653,750 Numbers 48 and 49 ) et Company purchased inventory on Novesber 30, 2018 for $10.00 payable March © C2 On Kine Company Pine any entered nt a forward corcact to purchase $1000 and tobe delivered 99 pace 2019 to hedge the purchase of inventryon November 30, 2018 The relevant exchange rates ae 1ys02018 | 12/01/2018 12/31/2018 02/28/2019 03/1/2019 Spot rate 45 46 50 si 55 Forward buying 90 Number 55 foreign exchange differences arising from translating foreign currency denominated Under IAS 21, rency shall be recognized in transaction to functional cur A. Profit or loss B. Other comprehensive incom C. Retained earnings D. Other comprehensive ineome 1¢ with reclassification adjustment ‘without reclassification adjustment Number 56 Linrealzed holding gain or loss on intrinsic value (effective portion) of derivatives, designated as cash value hedge shall be recognized in A. Profit or loss B._ Other comprehensive income wi C. Retained earnings D. Other comprehensive income wi ith reclassification adjustment thout reclassification adjustmentNumber 57 CCC, « non-profit organization, received the following pledges: Unrestricted Restricted for Acquistion of Equipment srso00 All pledges are legally enforceable, How », ‘i : | oe ate ie ever, CCC's experience indicates that 10% ofl pledges may ‘What amount should CCC report as pledges receivable, net of any required allowances? A. 337,500 B. 450,000 ©. 787,500 D. 875,000 Number 58 Doctor Hospital, a nonprofit hospital affiliated with RCF College, had the following cash receipts for 2020: Patient service revene 1,500,000 Contribution from donor to be invested indefinitely (endowment fund) 500,000 ‘Tuition fees from nursing school 100,000 160,000 Dividends received from permanent investments ‘The dividends received are restricted by the donor for hospital building improvements. No improvements were made during 2020. In the hospital's statement of cash flows for 2020, what amount would be included in the net cash provided (used) by operating activities? A. 1,760,000 B. 1,600,000 C. 2,100,000 D. 1,500,000 Number 59 Department of Health (DOH) received Notice of Cash Allocation in the amount of P100,000 from Department of Budget and Management. DOH made a total cash disbursements in the amount of P95,000. Whaat is the journal entry to recognize reversion of unused Notice of Cash Allocation by DOH in its books? A. Debit Subsidy Income from National Government P5,000 and credit Cash-MDS, Regular PS,000. B. Debit Retained Earnings of DFA P5,000 and credit Cash-MDS, Regular P5,000. ~. Debit Expenses of DFA P5,000 and credit Cash-MDS, Regular P5,000. c. D. Debit Investment of DFA P5,000 and credit Cash-MDS, Regular P5,000. Number 60 ‘The Bureau of Treasury received P20,000 cash remittance from Department of Agrarian Reform (DAR) from its miscellaneous income. What is the journal entry of the Bureau of Treasury in its accounting books to record the receipt of cash remittance from the income of a national government agency? Debit Cash in Bank, Local Bank P20,000 and Credit Cash-Treasury/Agency Deposit, Regular P20,000. B. Debit Cash in Bank, Local Bank P20,000 and Credit Miscellaneous Income of DA P20,000. C. Debit Cash in Bank, Local Bank P20,000 and Credit Savings of DA, Regular P2C 00. D. Debit Cash in Bank, Local Bank P20,000 and Credit Cash-Collecting Officer, DA P20,000. APage 16 ‘Numbers 61 and 62 by Bacolod Company recently set-up its standard costs for its direct labor. The entity sets the benchmark at 2 direot labor hours per product ata standard rate of P100 per direct labor hour. Daring the year, the entity manufactured 10 products using 30 direct Inbor hours at total direct labor costs: ‘of P2,400 or P80 per direct labor hour. 61. What is the direct labor rate variance?” t A, 600 favorable B, 400 unfavorable C. 200 favorable D, 800 unfavorable 62. What is the direct labor efficiency variance? A. 400 favorable B. 1,000 unfavorable C. 600 unfavorable D. 200 favorable Number 63 Simple Company employs actual costing for its production. The entity provided the following date concerning its production during the year: Decrease in direct materials during the year 500,000 Labor cost during the year 400,000 Actual factory overhead during the year 300,000 ‘netease in work in process during the year 200,000 Decrease in finished goods during the year 100,000 ‘What is the cost of goods manufactured during the year? A. 1,200,000 B. 1,000,000 C. 1,400,000 D. 1,100,000 Number 64 If the under or over applied factory overhead is significant, it shall be closed to ‘A. Cost of goods sold only B. Finished goods and cost of goods sold proportionately CC. Work in process finished goods and cost of goods proportionately 1D. Raw materials, work in process, finished goods, and cost of goods sold proportionately Number 65 In job order costing, normal rework cost which is attributable to a specific job shall be ‘A. Expensed as incurred B. Charged or eapitalized to that particular job C. Closed to factory overhend account 1D. Debited to work in process accountee Ps ‘Numbers 66 and 67 Page 17 \ | -Tactoban Company is e r n Company is employing process costing regarding its Conversion costs are added uniformly during the pi beat Coseelon cain i aed 18 the production process while direct material the ; ‘materials are added at The production data of the entity during the year are: ‘ Bey Work in Process Inventory 10,000 units (30% incomplete as to conversion costs -ginning Work in Process Inventory 10,000 units (30% incomplete as to conversion costs) Units started during the year e yea 30,000 units Ending Work in Process Inventory 5,000 units (75% incomplete as to conversion costs) conversion conts) There is no spoilage during the period. nig inventory consist of P103,000 costs of © The costs of begi costs, 's The total manufacturing costs consist of P240,000 costs of direct materials and P146,250 conversion ct materials and P107,500 conversion costs. under FIFO process costing? 66, What is the cost per unit of direct mate A 10 Bo C8 D7 67, What is the cost per unit of conversion cost under FIFO process costing? AS Bo C8 b.7 Numbers 68, 69, and 70 {IPG Company is employing process costing led uniformly durin; ‘al spoilage is 10% of units st g regarding its production eycle- 1g the production process while direct materials are added tarted during the year. 1ess is at 45% of conversion cost. The entity atthe Conversion costs are addi start of the process, Normé “The entity is conducting inspection when the production proc provided the following production data during the year: Beginning Work in Process Inventory 20,000 waits (40% incomplete as to conversion Units started during the year 80,000 units Ending Work in Process Inventory 10,000 units (60% complete as to conversion costs) Units completed during the period 76,000 units jvalent unit of production for direet material under mn costs) average process costing? 68. What is the equi A, 100,000 B, 82,300 C. 76,500 D. 86,000 rocess costing? 69, What i the equivalent unit of production for conversion cost under average Pr ‘A, 89,300 B. 90,300 . C. 86,500 D. 92,300 70. What is the equivalent unit of production for conversion cost under FIFO costing? #. 78,300 B, 82,500 C. 74,900 D, 77,300 - END-