CPA REVIEW SCHOOL OF THE PHILIPPINES

Manila
FINANCIAL ACCOUNTING AND REPORTING VALIX/VALIX/SANTOS
MAY 2025 CPALE BATCH 94
SINGLE ENTRY
1. An entity provided the following increases in account balances that occurred during the current year:
Assets 8,900,000
Liabilities 2,700,000
Share capital 6,000,000
Share premium 500,000
Except for a P1,300,000 dividend payment, the current year net income and a P200,000 prior period error
from understatement of ending inventory, there were no other changes in retained earnings for the year.
What amount should be reported as net income for the current year?
a. 1,200,000
b. 1,000,000
c. 800,000
d. 900,000
2. On January 1, 2024, an entity showed total assets of P5,000,000, total liabilities of P2,000,000 and
contributed capital of P2,000,000. During 2024, the entity issued share capital of P500,000 par value at
a premium of P300,000. Dividend of P250,000 was paid on December 31, 2024. On December 31, 2024
total assets amounted to P7,500,000 and total liabilities amounted to P3,200,000.
What amount should be reported as net income for 2024?
a. 1,750,000
b. 1,000,000
c. 750,000
d. 500,000
3. An entity revealed the following transactions during the current year:
* An adjustment of retained earnings for prior year overdepreciation 100,000
* Gain on sale of treasury shares 300,000
* Dividend declared, of which P400,000 was paid 600,000
* Net income for current year 800,000
The entity reported shareholders’ equity of P5,000,000 at year-end. Share capital beginning P3,000,000
remained unchanged.
What is the beginning balance of retained earnings?
a. 1,400,000
b. 1,700,000
c. 1,200,000
d. 1,500,000

4. An entity provided the following information for the current year:

Net loss 100,000
Total assets at end of year 3,000,000
Share capital at end of year 1,000,000
Share premium 500,000
Dividend declared 700,000
Debit to equity ratio 50%
What is the beginning balance of retained earnings?
a. 1,100,000
b. 1,300,000
c. 500,000
d. 600,000

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5. An entity provided the following information for the current year:

Cash balance – beginning 1,300,000

Cash balance – ending 1,600,000
Accounts receivable – beginning 1,900,000
Accounts receivable – ending 3,600,000
Collections from customers 5,000,000
Shareholders’ equity – beginning 3,800,000
Total assets – beginning 7,500,000
Total assets – ending 8,800,000
Total liabilities - ending 3,900,000

What amount should be reported as net income for the current year?

a. 4,900,000
b. 1,500,000
c. 1,100,000
d. 1,000,000

6. An entity revealed the following changes in the accounts for the current year:
Cash 1,500,000 Increase
Accounts receivable, net of allowance 3,500,000 Increase
Investments 1,000,000 Decrease
Inventory 3,900,000 Increase
Equipment 3,000,000 Increase
Accounts payable 800,000 Decrease
Bonds payable 2,000,000 Increase
During the current year, the entity issued 100,000 ordinary shares of P20 par value for P30 per share.
Dividend of P1,500,000 was paid in cash during the year. Equipment with fair value of P2,000,000 was
donated by a shareholder during the year.
What amount should be reported as net income for the current year?
a. 6,200,000
b. 9,700,000
c. 8,200,000
d. 7,700,000

7. An entity provided the following data at the end of 2024 and 2025:
2024 2025
Share capital, P100 par value 5,000,000 5,500,000
Share premium 1,500,000 2,500,000
Retained earnings 3,000,000 4,500,000
During 2025, the entity declared and paid cash dividend of P1,000,000 and also declared and issued a
share dividend. There were no other changes in equity during 2025.
What amount should be reported as net income for 2025?
a. 3,000,000
b. 2,500,000
c. 1,000,000
d. 4,000,000

End

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