FAR EASTERN UNIVERSITY FINANCIAL ACCOUNTING AND REPORTING quiz 1 - FAR PROBLEMS (ACCOUNTING FOR CASH AND CASH EQU) '$, RECEIVABLES, INVENTORIES, EQUITY INVESTMENTS AT FV) Instruction: Select the letter of the best answer. Shade the Letter on the scannable Sheet provided. Goodluck! Situation ates to three different companies ‘i tation 1 — the dats =" SPs, 180,000. In addition, Waide has Jance on Decenber 31, The Waide Company cash ba the following items on Decenber 31: = he folloding items op ec eera account, payable to a vendar, daved and F8°°8%*"| | peop, 450 cae aren yo. 2023 but _not mailed until January 3. 2024. B on Decenber 30,2023 put Ortrg account, payeble to a supplier dated JONNY] 146,300 4, 2024, was delivered and recorded on December 29, 2023. 146, 2024, sere yrs account, payable Yo @ suppliee, dated NoveRDeE = Check Gra scr delivered and recorded on December 24,2025. 4004 24, 2003 as Ge TSE puny, dated January 5, 7024, inetTuded 19 PSCMAPEF| a5, soo 51 cash balance _£28h- Dala0e* — rae company, deposited December 77. Sng gp. Greek evable Te grance, bur reeurned by bank on December 20+ ota00 4) “NSE-"| 341,200 avenber, 31 cash bavance’, on danuary 3, 2024, and cleared on January ts 20Fr | Sie check was EeGGDOSTSEoapany,ndeposTeed dated Hay 31, 7003, fnetuded 1 | December 31 checkbook balance 523, 600 Leer one Ng Company, deposited on December 26, 7023, revsenen ComPany, Sree wo entry made yet on the return of | 175,700 bank on December 30, eck, ‘the Aljanes Corporation reported the following items fn its “cash and cash equivalents” account as of December 31, 2023: icigposited Feceipts (including custoner’s check dated T7372024, P284, 100) PSI0, 000 [cash in bank - unrestricted B40, 000 cash-in bank > for payment of payroll onl 7,390,000 ‘Stal money orders 123, 450 ‘aveler’s check 211,000 ers onee airicted for additions to plant (to be disbursed in 2075) 3,260,000 sae idates of deposit (acquired 12/30/2023; due in 9/31/2024) 410, 000 (ee rank = to be used for payment of 2024 dividends 730, 000 Tiss deposit (acquired on 12/1/2023 and due on 1/31/2024) 620,000) Tine Gepos-Greference shares (original term of 5 years due on 2/26/2024; acquired on 12/28/2023) 475,000 the Nicole Company shows a cash balance of P3,720,000 as of December 31, 2023. During the period, the following transactions are available: Pera check of P600,000 waa drawn and recorded by Nicole Company payable to Meralco for le ukinities consumed for the month of December, but still not delivered to payee as of December 31, 2023. 2.) n cneck Gated January 5, 2024 was held by Nicole Company amounting to P680,000. Based dy the Company's experience all postdated checks are realized on the date indicated on the check. The check was included in the cash balance ja tustoners check for P710,000 was deposited on Decenber 29 but returned by bank on December 30 as NSF. No entry was made on the return of the check. [4.] The cashier maintained a cash account that is for use in the purchase of company’s be delivered in two years’ time, P390,000. This was included equipment which expected to in the cash balance. Low mich is the adjusted cash balance of Haide Company 2s of Decenber 31; 2023? a. P2,700, 550 b. P2, 705,750 , P2, 710,550 dd. P2,730, 750 Page 1«How much is the amount of cash and cash equivalents that Aljames Corporation should report ao ree pa pag sbecember 31, 2023 statement of Financial Position? ee 0 b. PA, 785, 350 c. PA, 755, 250 4. P4,730,250 3-How much is the adjusted cash balance of Nicole Company as of December 31, 20237 a. P2,010, 000 b. P2,140,000 ¢. P2,280, 000 d. P2,340, 000 Situation 2 - the data relates to Piyu Cot The petty cash fund of Piyu Company (P20,000 of imprest balance) was counted on January 3, 2024. The following itens were Found: Total bills and coins 5,835, Certified check of general manager dated December 27, 2023 3,150 Petty cash vouchers not yet replenished: Postage stamps (dated December 28, 2023) 1,420 Supplies (dated December 29, 2023) avn TOU of employee (dated December 30, 2023) 1, 000) Meals and transportation (dated January 2, 2024) 3,250 Company check representing replenishment of petty cash fund 5,750 Unused postage stamps 500 Currency in an envelope containing contributions of employees for the death oF a fellow employee (total collection is P6,000) 35-000 4.tiow much is the correct balance of petty cash fund as of December 31, 20237 a. P15,185 b. P14, 985 c. P13,935 a. 13,375 S.tiow much is the amount of shortage in petty cash fund as of the date of count? ‘a. P85.00 b. P645.00 ©. P1,335.00 d. PL, 645.00 Situation 3 ~The data relates to PCF of Allan Company: Allan Company established a petty cash fund of P5,000 on July 1, 2023. At the end of the month, the count of cash on hand indicated that P675.40 remained in the fund. A review of the petty cash vouchers disclosed the following expenses had been incurred during the month: Office supplies - P341.60; Postage ~ P780.00; Representation - P1,000.00; Transportation ~ P 1,321.40; and Miscellaneous - P837.60 6.lhat is the amount of shortage or overage in petty cash fund? a. P44.00 b. P64.00 cc. P134.00 d. PL64.00 J.Wnat amount is credited to cash in bank if the petty cash fund is replenished? a. Pd, 280.60 b. PA, 368.60 c. P4, 260.60 d. PA, 324.60 Situation 4 - The data relates to FAR Co: ion The FAR Corporation maintained bank account at the Rich Universal Bank. The following information is available in the bank account for December 2023. General ledger _Bank statement November balances 1,210,000 PI, 185, 000 Deposits made 1,180, 000 1, 320,000 Check disbursements (990, 000) 2, 065, 000 Bank service charge (5,000) Notes collected by the bank 120,000, NSF check (15, 000) December balances Fi, 400, 000 Pi, 540, 000 [1.] Bank reconciliation in November included the following information: Bank statement balance, Novenber, P1,185,000; Deposit in transit, P110,000; Outstanding checks, P85, 000, and balance per ledger, November, Pl, 210,000. [2.1 Collection from a customer of P105,000 in December 27, 2023 was deposited in the bank. ‘The bank erroneously credited to FAR Corporation's account for P150,000. Page 2a + was for payment of accounts (3. A check for P99, 000 ewan 000 was cleared by the bank in Dece of accounts 1, A cic for £99,000 was cleared 2) rant recorded the chee cach disborsene d the caaction in the Book, nk statenent. journal at P89, 000. No correction was made yet OF ne bank in December as $I (4.] A check for P65,000 was cleared by 11 The covet anount of check is P55,000 as recorded in ‘the book. by the bank yet. rn transit and outstanding checks 29 of December fhown in the bal No correction was made 8. How much is the balance of deposit 1 31, 2023? a. P30,000 and P15,000 respectively cc. P20,000 and P25, b. P15,000 and P30,000 respectively d. P15,000 and P20, 000 respectively 000 respectively ember 31, 20237 suioy 5. tm ate staan to Tene ete s for the month of May? 1o.What is the adjusted receipt: ‘a. P1,032, 000 b. Pl, 112,000 c. P1,132,000 d. P1, 402,000 ji.what is the correct cash balance as of May 317 a. 503,000 b, P583,000 cc. P593, 000 d. 603,000 balance as of April 30? 12.What is the correct cash P583, 000 cc. P593, 000 4. 603,000 ‘a. P503, 000 b. Situation 6 - The data relates to two different Compants Sactions of Hillside Company related to its accounts The following is the summary of tran receivable in 202. ecelvabie <1 fvabia, beginning ~ tet of F50,000 beginning allowance P5,150, 000 Credit sales j 5; 150, 000) [stat collections from custoners during the year 3, 950, 000 ants written off as_uncollectible “120, 000 Recovery of accounts previously written off 100, 000, Total sales return (from credit sales) 75,000 0 - 30 ‘Amounts 2,100, 000 923, 000 past invoice date at December 31: 31 - 90 91 - 180 Over 180 2 720, 000 Page 3EEE nce on its account receivable 2° year end as follows: The company’s polic: rovide allowai policy to provide atovance On 168 ay jpg over 100 days — 25% 30 days = 1.58; 31-90 days - 4t; 91-180 day! 5 of pecenber 31, 20237 ‘d. 7332, 9208 lowance for bad debts a : 13.How much is the balance of the al oo Paabeaat b. P323,420 cc. P330, 920 LA.How much is the amount of bed debts expense in 20797 c. P297,920 d, 300,920 a. P285,920 b. P293, 420 023 and 5 receivable at Decenber 31, 2} iP r90,000 on January 1, 2023 account red an aging of its ceivables was P: Shawn Mendez Company prepa’ Getermined that the balance of its accounts re hdditional information is available as follows: 4,000 Additional informer gceibie accounts at 1/1/23 - credie balance ee cnats written off as uncollectible during 2023 25,000 Dneollectible accounts recovered during 2023 25,000 Total sales return on credit sales 7,000 Total sales discount granted 47,000 Total provisions made during the year 3,500,000 2,500, 000 ded during the period Total credit sale recor’ ‘during the period Collection from credit customers f the outstanding receivables as uncollectible- tne company’s policy is to provide 5.58 0! is.How much is the amount of bad debts expense in 20237 a. P47,125 b. P86, 135 cc. P94, 125 d. P103,125 ié.tiow much 1s the amortized cost of accounts receivable 25 of December 31, 2023? 86, 135 cc. P94, 125 a. 103,125 a. P47,125 b. situation 7 - The ates to three different setuation ’y005, Ianrol Company sold equipment and sees ived a five-year non-interest on Apr 7p5.250, 000 note. ‘The note is payable in annua) installments of P1,050,000 with the bears") stallnent due on Narch 31, 2024. The present valve ‘of the note is based on effective EDrsetipo eon on april 1) angi mms Ev facto: oF) 90 /1R © Pol) 2 (0.649931 and PV factor oe 98 ordinary annuity in 5 periods is 3.889651- 00 to Jorelle Company. bearing note for the very December 31 of le was P1,780,000. 2023, Anjela Company sold an old building for B2, 000, 0 ¢ £560,000 down payment and signed a S* interest Nal annual installments plus interest e' the old building on the date of sa on January 1, Jorelle Company paii balance which is payable in 3 eq each year. The carrying value of Gnterest effective on January 1, 2023 is 4%. on August 1, 2023 Yon Joven Company received a 38, 6,000,000, 3 yeat note from sale of an ‘the furniture and fixtures has a carrying 61d furniture and fixtures to Randal Corporation. Ol fur te 500,000. The note is to collected every July 31 starting 2024 plus interest hased on outstanding balance as follows: uly 31, 2024 - P2,500,000; July 31, 2025 - P2,000,000 and July 31, 2026 ~ P1, $00,000 nterest effective on August 1, 2023 was 58 and on December 31, 2023 was 6%. 17 How much is the interest income should Ian Erol Company report in its income statement ton'year 2024 and the carrying value of the note receivable as of December 31, 20247 ‘a. 2367, 572 and P3, 401,706 cc. P367,972 and P3, 631, 321 b. 321,508 and P3, 631,321 d. P321,508 and P3, 401, 706 1a.How much is the carrying value of notes receivable in Anjela Company's Statement of Financial Position as of December 31, 20237 a. P1,514,238 b. P1,014,238c, PL,514,238 dP, 014,238 19.HoW much should Anjela Company's recognized as gai tow ny's recognized a5 gain (108s) on sale of old building? a. P248,114 gain b. P251,886 loss c. P251,886 loss d. P248,114 gain a Page 4How m Financial pe is the carrying value of notes receivable in Von Joven Company’s Statement of a. PS, 4geestiom a8 Of Decenber 21, 20247 +406, 122 b. 3,428,245 c. P3,433,333 dd, P3, 456,281 a. 0m much should Von Joven Company recognized as interest income for year 2024? P289,815 b. 3,428,245 c. P240,020 4. P170, 306 on 8 ~ The data relates to Social 5 On January 1, 2023, Social Company loaned P15,000,000 to Climber Company. The loan is to repayable after four years. Interest on this loan is 28 annually every December 31 of each year starting 2023. Direct origination cost of P678,901 was paid by Social and direct origination fee was deducted to the proceeds received by Climber Company. The interest effective on this loan is 4% after the origination costs and fees. On December 31, 2024, after the interest for the period was collected, available forward- looking information indicated that a significant increase in credit risk is evident. The lifetime expected credit loss is at P580,000 and the discount applicable is 4%. 22.How much is the direct origination fee? a. P1,767,869 b. P1,764,321 c. 1,753,479 dP, 748, 699 23.How much is the interest income recognized in its 2023 income statement? a. P556,441 b. P59, 356 c. 2566, 699 d. 2577, 367 24.How much is the amount of impairment loss recognized by Social Company in its income statement for year 2024? a. P580,000 b, 536,243 c. P487, 287 a. PO Situation 9 - The data relates to Emarie Ci marie Company has four operating segments, one segment is into wholesaling of groceries, other segment deals in the trading of household equipment and office equipment, the other segment is into servicing. The other segment is into car rental. The following items were taken from the books of the different segments pertaining to their Receivables as of December 31, 2023: Arising from rental of cars 520,000 Claim from insurance for damage rental cars 470,000 Arising from sale of old cars 430, 000 Arising from the accrual of interests on above receivables 380,000 Arising from sale of groceries 700, 000 Arising from sale of old grocery store equipment 800,000 Arising from sale of household and office equipment 680,000 Arising from sale of service 550,000 Arising from sale of old service equipment used in servicing segment 600,000 Arising from employee advances 250,000 25.How much is the total trade receivables as of Decenber 31, 2023? a. P2,450,000 b. P2,680,000 c, 2,930,000 d._ 3,210,000 26.How much is the total non-trade receivables as of December 31, 2023? a. 2,450,000 b. P2,680,000 c. P2,930,000 —d._-P3,210,000 Situation 10 - The data relates to three different Companies: The Rodello Company conducted a physical count of inventory on Decenber 31, 2023, with a cost of 3,370,000. The following items were included from the physical count: Goods held by Rodelio on consignment, P420, 000 Goods shipped by a vendor FOR Destination on December 31, 2023 and was received by Rodelio on January 5, 2024. 850, 000 Goods purchased FOB Shipping Point was shipped by the supplier on Decenber 31, 2023 and received by Rodelio on January 4, 2024. 770,000 Tost of goods shipped by Rodelio FOB Destination to a customer on December 31, 2023 and was received by the customer on January 2, 2024. 370,000 Page 5[Cost of | 31, 2023 ance shipped by Rodelio FOB Shipping Point to a customer on Decenber Cost oF ete seceived by the custoner_on January 5, 2024. 590, 000 instalinoeee®, upped By Rodelio to a custoner on December 31, 2023 on an the imetents agreement (Rodelio Company believed that the collectability of allment_is reasonably assured) 340,000 n he Charlize Manufacturing Company inventory list at December 31, 2023 shows a total of PL, 880, 000, Bina Included in such list are the following items: goods held on consignment 000 at cost; goods tagged awaiting custoner’s instructions for delivery (manufactured according to customer's specifications) P200,000 cost, unused store supplies P50,000, and gocds sold with buyback arrangement at cost of 150,000. The following in transit goods were excluded from the list (all at cost): goods sold FOB shipping point P40,000; goods sold FOB destination, P32,000, goods purchased FOB shipping point P70,000, and goods purchased, FOB destination, 90,000. You were retained by Jazter Corporation on April 1, 2023 to estimate the inventory destroyed ina recent fire. The company’s markup on sales is 35t. The following information is obtained from available records: Inventory, January i, P700,000; Gross purchases from January 1 to March 31 were PL,500,000, freight~in, P50,000, purchase returns and allowances, 20,000. Gross sales for the same period were P2,280,000, sales returns were P40,000, sales discounts were P15,000, and discounts granted to employees amounted to P57,000. Damaged goods were salvage at P120,000, Cost of goods purchased in transit, P54,000. 27.What amount should Rodelio Company report as inventory as of December 31, 20237 a. P2,810,000 b. P2,200,000 c. P1,830,000 —d._ P1,170,000 28.How much is the cost of Charlize Manufacturing Company’s inventory at December 31, 2023? a. P1,432,000 b. P1,552,000 c, Pl,562,000 —d. P1, 632,000 29.How much is the estimated cost of inventory fire loss of Jazter Corporation? a. P600, 000 b. P586, 250 cc. PS72,700 a. P562, 950 Situation 11 - The data relates to two different Companies: The operations of a department of Caley Company that uses FIFO retail inventory method are presented below: (Use two decimal places for CTR) Beginning inventory-sales price 3,000,000 Beginning inventory-cost 1,300,000 Purchases-cost 3, 600, 000 Purchases-sales price 5,000, 000 Freight-in 199, 300 Departmental transfer-in - cost 200,000 Departmental transfer-in - sales price 400,000 Net Markup 180,000 Net Markdown 100,000 Sales 4,000,000 Employee discount 180,000 Sales returns 50,000 Abnormal loss from breakage-sales price 70,000 Abnormal loss from breakage-cost 50,000 Normal loss from breakage 110,000 30.How much is the estimated cost of ending inventory of Caley Company? a. P2,701,972 b. P3,002,200 c. P3,044,100 —d._B3,124, 400 31.How much is the estimated cost of ending inventory of Caley Company if average method is used? a. P2,701,972 b. P3,002,200 c. P3,044,100 —d. P3, 124, 400 Ron Jullus Inc, is a wholesaler of office supplies. The activity for Model V calculators during August is shown below: Date Balance/Transaction bnits Cost Aug. 1 Inventory 2,000 35.00 Page 67 Purchase 3,000 38.00 12 sales 3,600 21 Purchase 4,800 40.00 22 sales 3,800 29 Purchase 1,600 44,00 fon dulius tne. uses pesiodie inventory records and that sad records are Kept in wnits 32. The cost of ending inventory of Model V calculators using the average method at August 31, should be reported by Ron Jullus Inc's at: a. P155,520 b. P156, 640 ce, P157,120 d. P166, 400 33. The cost of ending inventory of Model V calculators using the Fifo - periodic method at August 31, should be reported by Ron Jullus Inc's at: a. P155,520 b. P156, 640 c. P157,120 d. P166,400 Situation 12 - The data relates to two different Compan: ‘The following information relate to an item of raw materials of Dragon Empire Company as of June 30, 202: Replacement cost of raw materials 680,000 Historical cost of raw materials 700,000 Conversion cost 250,000, 34.How much is the value of the closing raw materials if the finished product to be produced is expected to be sold at P1,150, 000? a. P680, 000 b. P700,000 cc. P950,000 d. P1,150,000 35.How much is the value of the closing raw material if the finished product to be produced is expected to be sold at P880, 000? a. P680, 000 b. P700,000 c. P950,000 d. P1,150,000 ‘The December 31, 2023 inventory of Jaret Company consisted of three product categories, for which the following information is provided: Product Wunber of | Estimated SP | Estimated CTS | Cost per Unit units per_unit per unit, T 1, 200 P35 00 P25 2 2,500 46 12.00 40 3 3,000 190 55.00 120 36.What is the amount of inventory reported in Jaret Company’s statement of financial position as of December 31, 2023? a, P496, 500 b. 495, 300 c. P494, 800 d. 482,400 37.dhat is the amount of loss on inventory write down in 2023? a. P16,500 b. P15, 300 c. P12, 400 a. PO Situation 13 - The data relates to two different Companies: Talentine Company began business in January of 2023. During the year, Valentine purchased g portfolio of securities listed below. The composition of the securities did not change during the year 2023, Pertinent data are as follow: Transaction cost Equity Shares paid ev 1/1/2023 |_ev 12/31/23 | Fv 12/31/24 HA_(EVTPLY 15, 000 F30,000] 23, 450, 000 242 240 HE_(EVTPL) 25,000, 75, 000 3,750, 000 165 160 BA_(FVTOCT) 30, 000 60,000, 4,500, 000 145) 157 ‘BE (FVTOCT) 45, 000 T12, 000 4, 905, 000 103 iar Page 738.How comptes is the amount of equity investment at FV through profit or loss should Valentine Rhy TePOFE in its Statement of Financial Position as of December 31, 20247 + P7,000, 000 b. P7, 600,000 c. P10,155,000 d. P14, 865,000 3 SR-How much is the amount of equity investment at FV through other comprehensive, incase Showld Valentine Company report in its Statenent of Financial Position as of Decenber 31, a. 7,000, 000 b. P7, 600,000 P10,155,000 d._P14,865,000 40.How much is the amount of unrealized gain (loss) in its statement of financial position as of December 31, 2024? a. P542, 000 b. P553,000 cc. P569, 000 d. P578,000 on February 1, 2023, NoDate Corporation purchased 60,000 shares of Chocolate Company’ s shares for P10 per share, The shares were designated as equity investments at FVTPL. Nobate paid P2 per share transaction cost on acquisition. On December 31, 2023, Chocolate declared and paid dividends of P6 per share and the shares on this date is traded at P15 per share. On April 30, 2024, 45,000 shares were sold when the prevailing market price of the shares was at P16.50. 4..How much gain (loss) on sale should NoDate Corporation report in profit or loss in 2024? a. P67, 500 b. P90, 000 cc. P112, 500 d. PO 42.Assuming that the share were originally designated as equity investment at FVTOCI, how much gain (loss) on sale should NoDate report in the 2024 statement of comprehensive income? a. P67,500 b. P90, 000 c. P112,500 a. PO Situation 14 - The data relates to Flower C Flower Company has the following portfolio of equity securities during 2023: Tnitial | Additional Feb. July Sept. Fv Equity shares shares | dividends | Dividends | dividends | 12/31/23 Security Love 40, 000, 10, 000, P2.50 P1.50 P3.00] 30.00 Security Kaba 50, 000 15, 000 3.00, 2.00 2.00| 27.00 Security Love - Designated at FVTPL, additional shares were purchased on April 1, 2023. Security Kaba - Designated at FVTOCI, additional shares were purchased on August , 30, 2023. 43.#ow much should Flower Company report as total investment income in 20237 a. P485, 000 b. P565,000 cc. P675, 000 d. 2705, 000 44.How much should Flower Company report the investments in its statement of financial position as of December 31, 2023? a. P3,000,000 b. P3,095,000 cc, P3,125,000 —d._ P3, 255,000 Situation 15 - The data relates to Summit Company Summit Company had the following portfolio of financial instrument as of December 31, 2023. All securities were acquired at the end of 2022: ‘Security ‘Denomination, Initial recorded value Pagibig shares T50,000_shares B, 750, 000 ‘Alone shares 20,000 shares 900,000 [1).Pagibig shares were acquired and designated as financial asset at fair value through profit or loss. The shares were acquired at P65 per share which included P1.50 per share transaction cost. Half of the Pagibig shares were sold at P70 per share on August 31, 2024. [2].The Alone shares were acquired and designated at FVTOCI. Alone shares was recorded at its fair value at the time of purchase. (3] Additional information on the securities are as follows: Securit FV 12/31/23 FV 12/31/24 Pagibig shares P61.50 per share P62 per share Alone shares ‘45.00 per share 40 per share Page 845. How ae pauh 18 the realized gain or loss on sale of Pagibig shares in 20242 +500 b. P637,500 c. P727,500 d. P757,500 46. the Ou Much is the amount of investments reported at fair value through profit or loss at ie end of 20242 a. P800,000 b. P4,650,000 —c. PS, 450,000 —d._ PS, 630, 000 47.How much is the amount of investments reported at fair value through other comprehensive income at the end of 20247 a. 800, 000 b, P4,4650,000 c. P5,450,000 —d,._ PS, 630, 000 Situation 16 - The data re! to Monique Corporation: Monique Corporation acquired 15,000 Louie Company shares on February 5, 2023 at P65 which include P5 per share broker's fees and commissions. A P60,000 cash dividends were received from Louie Company on March 30, 2023. These dividends were declared on January 15 payable to shareholders as of February 15. Louie declared another P5 per share dividends on Septenber 1, 2023. The shares were selling at P68 per share on December 31, 2023. The investments were designated as FVIPL. 48.How much is initial carrying value of investment on the date of acquisition? a. P840, 000 b. P900,000 c. 2915, 000 d. P1,015, 000 49.How much is the total dividend income should Monique report in its income statement? a. P135,000 b. P75, 000 cc. P60, 000 d. P45, 000 50.How much should the investment be reported in its December 31, 2023 statement of financial position? a. P750, 000 b. PB40,000 c, P900, 000 a. P1,020,000 #88 end of QUIZ 1*** Page 9