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Orca Share Media1684160307442 7063880314149123200
Orca Share Media1684160307442 7063880314149123200
LR.CI
NCO I
NTERMEDI
ATEACCOUNTI
NG3
BSi
nAccount
ancy UNI
T3:
Topi
c3
PRETEST
1.A
2.D
3.D
4.D
5.C
ACTIVI
TY1
1.D
Solut
ion:
CashPur chases–Gr oss 1,
200,
000
Cashpay mentonpay abl
es 4,
000,
000
TotalGrossPurchasesUnderCashBasi
s 5,
200,
000
Less:PurchaseReturnsfr
om CashPur
chases (60,
000)
NetPur chasesUnderCashBasis 5,
140,
000
2.B
Solut
ion:
NetPur chasesUnderCashBasis 5,
140,000
Less:Inventor
y,end. (400,000)
CostofGoodsSol dUnderCashBasi
s 4,
740,000
3.C
Sol
uti
on:
Tr
adeAccount
sandNot
esPay
abl
e
Pur
chaseRet
sandDi
s. 20,
000 2,
800,
000 Tr
adeAPandNP,
Beg
Pay
ment
sonPay
abl
es 4,
000,
000 2,
820,
000 Gr
ossCr
edi
tPur
chases
1,
600,
000
GrossPurchases 1,
200,
000
Less:Pur
chaser et
urnsf
rom CashPur
chases (60,
000)
NetCashPur chases 1,
140,
000
GrossCredi
tPurchases 2,
820,
000
Les:Sal
esReturnsandDiscount
s (20,
000)
NetPurchasesonCredit 2,
800,
000
NetCashPur
chases 1,
140,
000
NetPur
chasesonCredi
t 2,
800,
000
NetPur
chasesUnderAccr
ual
Basi
s 3,
940,
000
4.B
Solut
ion:
NetPur chasesUnderAccrual
Basis 3,
940,000
Less:Inventor
y,End (400,000)
CostofGoodsSol dUnderAccrualBasi
s 3,
540,000
5.B
6.C
7.C
8.B
9.C
10.B
11.D
12.C
13.C
14.B
Solution:
CashSal e–Gr oss 2,
000,000
Less: SalesReturnfr
om CashSal
es (20,
000)
NetCashSal es 1,
980,000
Collecti
onsonRecei vabl
es 4,
000,000
NetPur chasesUnderCashBasis 5,
980,000
15.C
Sol
uti
on:
Tr
adeAccount
sandNot
esPay
abl
e
Tr
adeARandNR,
Beg 2,
400,
000 4,
000,
000 Col
l
ect
ions
Recov
eri
es 16,
000 60,
000 Sal
esRet
sandDi
s.
Gr
ossCr
edi
tSal
es 4,
604,
000 40,
000 Wr
it
e-of
f
120,
000 NRDi
scount
ed
2,
800,
000
GrossCashSales 2,
000,
000
Less:Sal
esRetur
nfr
om CashSal
es (20,
000)
NetCashSales 1,
980,
000
Gr
ossCr
edi
tSal
es 4,
604,
000
Less:
SalesRet
urnsandDi
scount
s (60,
000)
NetCredi
tSal
es 4,
544,
000
NetCashSales 1,
980,
000
NetCredi
tSales 4,
544,
000
NetPurchasesUnderAccr
ual
Basi
s 6,
524,000
16.D
Solut
ion:
CashPur chases–Gr oss 1,
200,
000
CashPay mentonPay abl
es 4,
000,000
TotalGrossPurchasesUnderCashBasis 5,
200,
000
Less:PurchasesReturnsfrom CashPur
chases 60,
000
NetPur chasesUnderCashBasi s 5,
140,
000
17.B
Solut
ion:
NetPur chasesUnderCashBasis 5,
140,000
Less:Inventor
y,End (400,000)
CostofGoodsSol dUnderCashBasi
s 4,
740,000
18.C
Sol
uti
on:
Tr
adeAccount
sandNot
esPay
abl
e
Pur
chaseRet
sandDi
sc. 20,
000 2,
800,
000 Tr
adeAPandNPBeg
Pay
ment
sonPay
abl
es 4,
000,
000 2,
820,
000 Gr
ossCr
edi
tPur
chases
1,
600,
000
GrossPurchases 1,
200,
000
Less:Pur
chaser et
urnsf
rom CashPur
chases (60,
000)
NetCashPur chases 1,
140,
000
GrossCredi
tPurchases 2,
820,
000
Les:Sal
esReturnsandDiscount
s (20,
000)
NetPurchasesonCredit 2,
800,
000
NetCashPur chases 1,
140,
000
NetPurchasesonCr edi
t 2,
800,
000
NetPurchasesUnderAccrual
Basi
s 3,
940,000
19.B
Solut
ion:
NetPur chasesUnderAccrual
Basis 3,
940,000
Less:Inventor
y,end (400,000)
CostofGoodsSol dUnderAccrualBasi
s 3,
540,000
20.A
Sol
uti
on:
Rent
alPayment
sRecei
ved 4,
000,
000
21.B
Sol
uti
on:
Accr
ued/Unear
nedRentI
ncome
Accr
uedRent
,Beg 1,
600,
000 1,
200,
000 Unear
nedRent
,beg
Accr
ualBasi
s 2,
400,
000 4,
000,
000 Pay
ment
sRecei
ved
Unear
nedRent
,End 2,
000,
000 800,
000 Accr
uedRent
,End
22.A
Sol
uti
on:
Accr
ued/Unear
nedRentI
ncome
Accr
uedRent
,Beg 1,
600,
000 1,
200,
000 Unear
nedRent
,beg
Accr
ual
Basi
s 2,
400,
000 4,
000,
000 CashBasi
s
Unear
nedRent
,End 2,
000,
000 800,
000 Accr
uedRent
,End
23.C
Sol
uti
on:
Pr
epai
dInsur
ance/I
nsur
ancePay
abl
e
Pr
epai
dInsur
ance,
Beg 1,
600,
000 1,
200,
000 I
nsur
ancePay
abl
e,Beg
Pay
ment 4,
000,
000 3,
600,
000 Accr
ualBasi
s
I
nsur
ancePay
abl
eEnd - 800,
000 Pr
epai
dInsur
ance,
End
24.A.
Sol
uti
on:
Pr
epai
dInsur
ance/I
nsur
ancePay
abl
e
Pr
epai
dInsur
ance,
Beg 1,
600,
000 1,
200,
000 I
nsur
ancePay
abl
e,Beg
Pay
ment(
CashBasi
s) 4,
000,
000 3,
600,
000 Accr
ual
Basi
s
I
nsur
ancePay
abl
eEnd - 800,
000 Pr
epai
dInsur
ance,
End
25.D
Sol
uti
on:
I
ncomeTaxPay
abl
e
Pay
ment
s 4,
000,
000
4,
800,
000 Cur
rentTaxExpense
800,
000
I
ncomeTaxExpense( squeeze) 5,200,000
I
ncreasei
nDTL( 3.
6M –1.2M) (2,400,000)
I
ncreasei
nDTA 2,000,000
Cur
rentTaxExpense 4,800,000
26.A
Sol
uti
on:
CashBasi
s Accr
ualBasi
s
Rev
enues 1,
200,
000
Expenses 480,
000 480,
000
Pr
ofi
t(Loss) (
480,
000) 720,
000
27.C
Sol
uti
on:
CashBasi
s Accr
ualBasi
s
Rev
enues 1,
200,
000
Expenses 480,
000 480,
000
Pr
ofi
t(Loss) (
480,
000) 720,
000
28.D
Sol
ution:
AccrualBasi
sProfi
t(squeeze) (400,000)
DecreaseinI
nvent
ory(4M –2.4M) 1,600,000
I
ncreaseinRecei
vables(3.
6M –1.
2M) (
2,400,000)
I
ncreasei
nPayabl
es 2,
000,
000
CashBasi
sProfi
t 800,
000
29.A
Sol
ution:
AccrualBasisProfit 1,
200, 000
Depreciat
ionExpense 280, 000
Amor t
izat
ionofDi scount–Investmenti
nBonds ( 40,
000)
DecreaseinAccount sRecei
v abl
e 400, 000
I
ncreaseinPr epai
dExpenses (200,000)
I
ncreaseinAccr uedExpenses 80,000
DecreaseinAccount sPayable (240,000)
DecreaseinInventory(2.
4M –1. 6M) 800,000
CashBasi sProfit 2,280,000
30.D
Solution:
ProfitfortheYear–CashBasi s 4,
260, 000
Credi t
ssal esnotr ecogni
zed, netofbaddebts(1M –80K) 920, 000
I
nter estincomef rom di
scountamor ti
zati
on 8,000
Equipmenter roneouslyexpensed 1,600,000
Depr eciati
onont heequipment( 1.6M /10) (160, 000)
Salesi ncurredbutnoty etpaid (120, 000)
RentPai dinadv ance–char get oexpense(48Kx3) 144,000
Uti
lityCosti ncurredbutnoty etpaid (40,000)
Unexpi redpor t
iononi nsurancepremium (160,
000x6/12) 80,000
Commi ssi
ononnetcr editsal
es[ (
1M -80K)x1%] (9,
200)
I
nter estexpense( 4M x12%x2/ 12) (80,000)
I
ncr easei nDTL (20,000)
I
ncr easei nDTA 13,200
ProfitfortheYear–Accr ualBasis 6,
596, 000